What happened in December across the Triangle housing market?
On the surface, the total number of homes sold in December 2018 was slightly lower than the tally from 2017, roughly a 10% drop in total sales numbers. This ends a three year run of year-over-year sales increases in the month of December. Many factors will play a role in the decline of total sales including weather impacting showings due to unusually inclement winter weather and rising interest rates in November resulting in slower mortgage application rates for those anticipating a purchase in December.
The good news for home sellers: the average price of a home sold in Dec ‘18 saw a healthy increase of 5.8% from a home sold the prior December. Additionally, the average days on market for homes sold in December 2018 was a surprisingly low 23 days, with the median days on market being only 5 days!
The good news for both sides is that mortgage rates are cooling off and warmer weather to start 2019 should lead to increased buyer activity. While no one is able to predict with absolute certainty what financial markets or how the Fed will impact rates moving forward, it is relatively safe to say that a housing market recession is not on the horizon. What we are likely to see is price increases cooling off to meet buyer purchasing power impacted by slightly higher interest rates heading into the spring of 2019.