Whose market is it? Broker David Evans discusses the current housing market which seems to live in limbo between a buyers and sellers market
By Stephanie Meador, posted Apr 13, 2023 on BizFayetteville.com
Floyd Properties in the Turnberry subdivision.
As we swing into spring, many people adopt the idea of “spring cleaning.” For some people, that’s cleaning up the house to get it ready to sell, and for others, that’s cleaning up their schedule to make time for touring houses they might settle down in.
David Evans is the Broker at Floyd Properties with over 30 years of experience. He deals primarily with new construction, and he’s eager to see the interests and engagements of buyers in the spring and summer seasons.
“One of the things I think is important, and especially because we have a semi transient community, a lot of soldiers come in and out, and so a lot of times that makes them geared towards maybe new construction…what I see happen a lot of times is, people don’t understand the basics of what makes a good neighborhood,” remarked Evans.
Evans believes that whether it’s new construction or an existing home, buyers should think about neighborhood first.
“...you know how like if you lived in New York, you might say you live in a Soho district, or the art district, Chinatown or Little Italy? Because it identifies you know, this is your identity. ‘This is where I live.’ When we’re building subdivisions, and we’re just kind of going out on a road and you buy some land, it’s not like…‘Okay, this is the identity we live here.’ And a lot of neighborhoods don’t take the time to create an identity…” Evans stated.
This lack of a “cohesive identity” is something Evans finds to be an issue with some neighborhoods, and he believes not all buyers are considering this element when purchasing a home.
Evans gave a run down of the current housing market. It would be hard for buyer interest to match the unexpected boom of purchasers seen during the pandemic, and with the succession of interest rate hikes as well as the increased costs of supplies driving up prices, the market has slowed down significantly since the previous couple of years.
“Not only was it already very expensive to build, now a 2400 square foot house and new construction is going to cost you somewhere, depending, from $380,000 to $450,000. And now to get that loan, you’re gonna have to get a 6 percent loan,” remarked Evans.
The market during the pandemic was undoubtedly a seller’s market, according to Evans, with individuals offering $20,000 non refundable option money and offering to pay $25,000 over the appraisal so that they could win the bid out of over a dozen offers put down. Evans shared that now they are seeing three to five offers for a house and people are offering roughly $5,000 in option money and offering to pay less over the appraisal if it comes in low. However, Evans shares the market remains very strong and confirms that they have not been having problems with appraisal.
The high costs for homes have driven people to consider buying existing properties over building new homes, and this supply and demand relationship has had an impact on inventory.
“...roughly 480 homes a month is what we do sell in existing but we’ve only got 420 or 400 active on average. We have less than one month’s inventory for existing homes. And that’s because they can’t afford a new construction house. They’re going to buy an existing home. And we’re still getting multiple offers, which still drives the prices of housing up,” shared Evans.
However, there is soon to be a new wave in the market. Soldiers will get their orders cut this spring, and this will initiate a new season of buying and selling.
Evans shared that roughly 5,000 military personnel will be sent to this area and will be looking to find housing, and roughly another 5,000 will prepare to move out of this area and will be looking to sell.
Evans shared about some of the hottest areas for new builds. In Cumberland County, Jack Britt is a popular area. Before the Gen X chemical spill, Grays Creek was an up and coming area for new construction, and it remains of interest though some demand has decreased in locations highly affected by Gen X. The northside is starting to be more appealing now that they've got Interstate 295. Additionally, Evans confirmed that Haymount is always steady and strong, but there's not a lot of new development there.
Evans also shared that they’ve got a “new phenomena” in the market as a lot of Raleigh agents have begun showing houses down here. It appears they’re buying some of the high end houses in the area.
Some of Floyd Properties' new builds include homes in Turnberry in Hoke County, homes in Fairfield Farms off of Ramsey Street and plans for development beside FirstHealth.
Evans also shared about some of the efforts made by Greg Floyd, primary designer at Floyd Properties, to help make home buying accessible to his potential clients.
“Greg, he’s working with some mortgage companies to offer buy down rates, maybe for the first two years in the hopes that sometime in the third year, by then, the Feds will have calmed down, …and people can refinance. And so, to try to accommodate these high interest rates, builders are reaching out to mortgage companies to create package deals to help people get better interest rates,” added Evans.
These package deals vary among builders, but can provide assistance with the high costs buyers currently face.
“It’s somewhat of what I call pent up demand, in some sense. People need housing, they can only grit their teeth and resist for so long. And definitely the Federal Reserve raising rates every time they meet makes people very hesitant or confused… It remains to be seen what’s going to happen here in the spring when they really start getting their orders and really start moving,” concluded Evans.
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