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Local Hickory Real Estate Outlook For 2019
The real estate market in the Catawba Valley for 2018 has been a real mixed bag with pockets of the market being a sellers market and pockets as a buyers market. As we look forward to 2019 we need to come to grips with where the market is and where it is headed and I predict that it will continue to be a mixed bag as we move forward.
Signs of Encouragement:
Future plans in Hickory
There is a lot of good news to report as the city of Hickory is ever closer to executing the bond referendum projects that will enhance the livability and walkability of our area with the City walk project, the River Walk project and the Trivum Corporate Center that will hopefully bring additional good paying jobs to our area.
Queen City is Booming
Our close proximity to the Charlotte area is another benefit as Charlotte and its suburbs continue to grow our area stands to benefit from this close proximity as the open spaces between our markets continue to shrink. Catawba County stands to gain some pretty substantial development in the eastern part of the county in the coming years where they invested in public water and sewer infrastructure before the recession in an area that is easily commutable to Charlotte. There are numerous projects planned in this area in the coming years.
We are experiencing historically low unemployment in the 3% range and manufacturing seems to be thriving with the only thing holding it back is a relative lack of prospective employees. This is a direct contradiction from the dark days of 2010 when unemployment was in the 15% range and mass layoff announcements were a daily occurrence. Fortunately Catawba County and the Catawba County Chamber of Commerce have been working to help solve this problem working with local schools and even recruiting Veterans from other parts of the state to come to Hickory to work and live to help fill these vacancies.
Certain Homes are Selling Well
If you have a home to sell and the price would be under $200,000 assuming that it is in good condition and priced appropriately you should not have to wait long for it to sell. Also if you have a special property that has acreage, has a great view or is on the lake you should still do fairly well when it comes time to sell but it might take a little longer to get it sold.
One type of home that is also selling well is a one level home under 3000 square feet with higher end finishes. This style home is still in demand even up to the $400,000 price range as many baby boomers look to downsize and get on one level but still want the high end finishes of their previous larger homes.
Things to be cautious about:
One thing to be cautious about is the lack of interest in what is often referred to as a McMansion. In our area I would define a McMansion as a home priced in the $300,000 to $600,000 price range and in the 3000-to 5000 square foot range where most of their living space in the main level and the bedrooms on the second level. Many of these homes in our area were built in the 1990’s and early 2000’s and were generally fitted with high end finishes for the era.
The problem is that many of these homes owners are now looking to downsize to one level homes but can not do that without selling their home first. Homes like this will struggle to sell in the coming years unless they have impeccable finishes and layouts and/or are priced aggressively. It seems that buyers from Generation X and Generation Y do not feel the need to buy homes like this for the most part as they like the idea of living in smaller homes closer to downtown areas.
Buyers that want to upgrade would be keen to look for weakness in this sector of the market and look for deals in the future. You can get a lot of house for your money in this sector if you look for homes that need some updating. The buyer pool may be lower now but as our population continues to grow I predict there will be a market for these homes again in a few years.
Lack of Inventory
Another issue to be concerned about is that first time buyers and some downsizing buyers are looking for the same size and priced homes and this has created a pretty extreme sellers market for homes in the $125,000 to $250,000 price range and the1500-2500 square foot range. The problem with this is that there are not enough homes actually available in our market for people in this price range and there does not appear to be much help on the way in terms of new construction in this price range.
Apparently builders are having trouble building homes in this price range due to lack of experienced help and lack of financing to build properties like this at scale. It is much more cost effective to build 8 or 10 of these properties at one time and spread to the costs versus building one at a time. Hopefully lenders will see this hole in the market place and come up with ways for small builders and developers to provide us with the housing stock we need.
Another area of concern is that it is likely that interest rates appear to be on the rise. Assuming the national economy keeps improving, we are likely to see interest rates rise as well and this will make housing less affordable by years end. Interest rates are still historically low even though we have seen them creep up over the last couple years.
Overall I think that we will sell a similar number of homes in 2019 vs 2018. Prices will continue to rise slightly but will be blunted by interest rates. I do not have a crystal ball but overall I am still fairly optimistic about the market this year but with a little bit of caution thrown in there.
Some people I talk to are worried about an extreme pullback in housing because in many cases pricing is now at or above what it was pre-recession but we had much different issues then. Lending standards were not as tough as they are now and though there are some low downpayment loans available to buyers the lenders are really thorough in screening potential buyers. We also still have a bit of a shortage in the price ranges that buyers are looking for so until someone builds more homes than we need I think we should stay pretty healthy for the foreseeable future.
This post is the opinion of Mike Kelly and does not reflect the views of any other organization.
President, REALTOR®, Broker, CRS, GRI, GREEN, . We take the responsibility of helping our clients sell their home very seriously. The real estate market is always changing and we are constantly ....