By Gary A. Miller
In a year in which mortgage rates saw an unexpectedly high average, one would expect a year-end review article to talk about how the housing market has slowed or even receded. However, this isn’t that article.
To be clear, we saw some signs of slowing in southern Orange County. However, any impact imposed by higher mortgage rates was most certainly offset by very low housing inventory (less than two months of inventory for the entire year) and net positive migration numbers (more people moving to the area than moving away from the area).
With those factors in place, average home prices in the area saw no signs of slowing. In 2023, there were a total of 729 closed sales within the boundaries of Orange County in the 27510, 27514, 27516, and 27517 zip codes. The average sales price among them was $666,484 and the median was $588,000.
As shown in the chart below, the average home in southern Orange County is now more than $200,000 more expensive than it was in 2019.
A closer look at 2023 indicates a market that was struggling to find itself with regard to pacing, as reflected by the days-on-market stat. To be clear, all of the data reflected in the following chart shows a very fast-moving market in historical terms. However, where 2022 was quite smooth in its changes, 2023 was much more jagged. In general, buyers were more selective in 2023, and homes with adverse conditions or that did not show well had a tendency to stay on the market longer than others, setting the table for the unevenness seen below.
On a month-by-month basis, 2023 followed a pretty standard curve in terms of how many sales transactions were happening at a given time. The next chart shows that while the overall number was lower through nearly the entirety of 2023 when compared to 2022, the general curve of activity was quite similar.
Lastly, in comparing 2023 median sales price to that of 2022, we see that there was an opportunity for buyers to have a “moment of reprieve” from the recent upward trend in pricing. Those seeking to make a purchase at the end of 2023 would have had the opportunity to buy at prices slightly below the prior-year’s median, as seen in the chart below.
As we begin the new year, this will be the trend line to watch. However, I do not predict that we will see this lower median price continue. As we entered the 2023 holiday season, mortgage rates began to recede from their recent highs. Assuming we do not see a dramatic increase in inventory or a notable drop in migration – essentially a change in supply or demand – we should anticipate the upward trend in prices will continue.
Gary A. Miller is co-owner of Red Bloom Realty. He has lived and worked in Chapel Hill off and on since 1994. He is an avid musician and traveler and is a former educator of 25 years.