The Memphis area’s median home price saw a small decrease in the first quarter of 2024, according to data released by the Memphis Area Association of Realtors.
The median sales price decreased from $196,000 in the first quarter of 2023 to $189,000 in the same period this year, a 3.6% change. The association’s report includes data from Shelby, Tipton and Fayette counties.
Joel Hobson, principal broker and owner of Hobson Realtors, said the small overall decrease can be attributed to the market finally nearing some stability after the COVID pandemic. One aspect of the market that is evening out is interest rates.
“It’s going to be kind of an up-and-down situation on interest rates, I believe,” Hobson said. “I think these kind of interest rates that we have in the 6 to 7 (percent) range are probably going to become the new normal at some point.”
Hobson said that while he didn’t personally notice the small median decrease, relatively little change in home prices, up or down, is a good thing for both buyers and sellers.
“Most people that sell also buy,” Hobson said. “It’s great when they sell, but if they don’t know where they’re going to go, they end up not putting their house on the market because they don’t think they can find a house. So a more even market… is going to be good for everybody.”
Hobson’s overall assessment of the market in Memphis is a positive one, for both current residents and those looking to move to the Bluff City.
“Memphis is still the least expensive major city in the country to buy a house,” he said. “And people are figuring that out from all over the country.”
Here is a closer look at Memphis neighborhoods and the prices changes they saw in the first quarter.
TIPS FOR HOMEBUYERS:Thinking about buying your first home? What to know before your home-buying journey begins
Memphis-area home price decreases by neighborhood
Fortunately for Memphis buyers, several neighborhoods saw decreases in the median sales price over the first quarter of 2024. The data compares prices from January to March 2024 to the same period in 2023.
- Berclair had a modest decrease, going from a median price of $95,000 to $89,000, a 6.3% change.
- East Memphis saw a decrease of 2.4%, going from $205,000 to $200,000.
- Raleigh saw a 2.0% decrease, with the median price going from $148,000 to $145,000.
- Whitehaven saw the median price slightly drop from $116,300 to $114,750, a 1.6% decrease.
Memphis-area home price increases by neighborhood
Other Memphis neighborhoods saw increases in median sales price, although most were small increases. The data once again compares prices from January to March 2024 to the same period in 2023.
- South Memphis saw the largest increase to the median sales price in the city at 11.9%, up from $65,000 to $72,750. The area still remains the cheapest to buy in in the city.
- Southwind’s median price went up from $321,905 to $346,000, an increase of 7.5%.
- Midtown’s median price increased 3.4% increase, going up from $164,250 to $169,900.
- Hickory Hill saw a 1.6% increase, as the median price went from $172,250 to $175,000.
- Frayser had a 1.1% increase, with the price going from $90,000 to $91,000.
- Parkway Village had negligible increase, as the median price only went up from $120,000 to $120,450, or 0.4%.
Jacob Wilt is a reporter for The Commercial Appeal. You can reach him atjacob.wilt@commercialappeal.com.
With inflation picking up again and highly anticipated Federal Reserve interest rate cuts delayed, it may be a good time for Americans to tweak their investment and retirement portfolios, financial advisers say.
While U.S. rate cuts are on hold, the European Central Bank (ECB) suggested last week that its first rate cut could come in June. Though Europe’s economy is anemic compared to the U.S., those rate cuts could ignite more stock market growth that would benefit investors, advisers say. On the flipside, high U.S. rates could make U.S. fixed income a better investment.
“It’s an excellent time to buy U.S. bonds with yields near the highest levels since October 2023,” said James Sahagian, managing director of Ramapo Wealth Advisors at Steward Partners. “I also think it’s worthwhile to diversify outside of the U.S.”
Europe’s stock market is already on the rise
The Eurostoxx 50, comprised of European blue-chip stocks, is outperforming its U.S. counterpart, the Dow Jones Industrial Average. As of Tuesday, Eurostoxx 50’s one-year return is 15.77% and its year-to-date gain is 8.75%, according to Bloomberg. That compares to the Dow’s 13.91% and 0.29%, respectively.
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“In Europe, their economy’s starting to expand a little and (the ECB) can aid that by reducing rates a little,” said Derek Miser, investment advisor and chief executive at Miser Wealth Partners.
Europe has room to lower rates because “unlike in the United States, there is little evidence of overheating” to resurrect inflation, wrote Pierre-Olivier Gourinchas, economic counsellor and director of research at the International Monetary Fund (IMF) in a blog post about the IMF’s World Economic Outlook report released Tuesday.
The IMF also predicts Europe’s economy will expand, registering 1.5% growth by 2025, but U.S. growth will gradually slow to 1.9%.
How do lower rates help the economy?
Central banks often lower interest rates to jumpstart lackluster economies, as long as inflation is contained. Lower rates mean lower borrowing costs, which encourage people to spend and companies to invest. That, in turn, boosts corporate profits, production, output and the overall economy.
The opposite is true if central banks raise rates. Higher rates increase borrowing costs, which discourages spending and investing to slow down a hot economy and inflation. They also encourage saving because people can earn a higher return on their money.
Valuations
After a string of record highs for U.S. stocks, some financial advisers see the market as overextended compared with European stocks.
“European companies are considerably more attractive based on valuations,” Sahagian said. “That merits more consideration.”
At the end of March, Europe’s STOXX 600 index traded at about 15 times its one-year forward price-to-earnings (PE) ratio, while its U.S. counterpart S&P 500 index traded at 26 times, according to LSEG data. A lower PE multiple indicates a more attractive investment opportunity.
Bank of America’s global fund manager survey last month showed the largest allocation increase to European Union stocks since June 2020.
Stick with U.S. Treasuries
If U.S. rates are going to stay higher for longer now, investors should keep their Treasuries, which are yielding around 5%, advisers said.
It will also add some stability to your portfolio because it’s steady income, Miser said.
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What should my 401(k) look like if I take these steps?
Your allocation of stocks and bonds should always depend on your risk tolerance and how close you are to retirement, advisers say. The higher your risk tolerance or further away from retirement, the heavier the equity weighting, they say.
After you’ve decided your stock and bond allocation, you might consider taking 20% of whatever your equity position is and allocate it to a global investment fund, Miser said.
In the fixed-income portion of your portfolio, Sahagian likes the “barbell,” which means investing in short-term and long-term bonds. You gain from the high short-term interest rates while also locking in some decent long-term returns in case rates begin to fall.
Miser likes 40% in two- to five-year notes, 30% in 5- to 10-years and then the rest in 30-year bonds. The varying maturities give you the flexibility to reinvest money at various times and in various ways, including buying new Treasuries.
But with all retirement investments, consumers should consider what stage they are in life and what their goals and risk tolerance are before making moves, advisers said.
Are Costco gold bars a good investment?
Gold prices are near an all-time high around $2.400 per ounce, reflecting a “crisis of confidence,” Sahagian said. “People are looking at other assets that will hold up in the wake of uncertainties and upheaval.” They’re dissatisfied with government and monetary policy after the highest inflation in four decades and concurrent wars in Ukraine and Palestine, advisers said.
“Costco’s a trusted source (for buying things, including gold bars), and people are searching for alternative ways to invest,” Sahagian said. “Most cultures around the world value gold, like in India and Africa. So is it a good idea and liquid? Yes, you can monetize it at some point.”
Miser’s not so sure.
“Gold may have been a good idea 3-1/2 to 4 years ago when you could buy low and sell high,” he said. “That’s the opposite of buying gold now. Today, you’re buying at the highest it’s been in a long time, which typically means prices are reaching near their end.”
Costco gold bars may be better left as a novelty purchase, he said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
If Cape Coral, one of the fastest growing cities in the U.S, has been a financial reach for people shopping for a new home, a new study from researchers at Florida Atlantic University and Florida International University indicates the gap could be closing.
According to the study, housing premiums in many markets in the country are starting to decline, suggesting many areas across the country are moving toward stabilization.
A premium is measured by the degree of overpricing in terms of a percentage difference between actual and statistically modeled home prices.
What about rent prices?:Rent shock: Study reveals Cape Coral costlier than Tampa, Orlando, Seattle, other big cities
Cape Coral, the second most overvalued market in the study, had a 62-basis point decline. The data is from the Top 100 U.S Housing Markets.
“This is good news as it signals these markets could be getting to where prices should be, slowly but surely, creating less risk for catastrophic loss in average home value,” said Ken H. Johnson, Ph.D., real estate economist in FAU’s College of Business. “Ideally, we want to find our way back to the long-term trend for each metro area with as little pain as possible.”
What about housing prices in other cities?
The study showed In eight out of the 10 most overvalued housing markets, housing price premiums have started to edge back down toward their long-term pricing trends.
- Atlanta, the most overvalued market in the country, posted a 12-basis point decline in its housing premium over the past month.
- Florida cities like Tampa, the fourth most overvalued, had a 17-basis point decline and Palm Bay, fifth most overvalued, a 31-basis point decline.
- Knoxville, the sixth most overvalued, had a 13-basis point decline.
- Lakeland, the eight most overvalued had a 23-basis point decline.
- Orlando, number nine, saw a six-basis point decline.
- Charlotte, the tenth most overvalued, saw a 14-basis point decline.
More housing price trends highlighted in the analysis
The Top 100 U.S. Housing Markets, a monthly index in FAU’s Real Estate Initiative, measures housing premiums and discounts in the 100 most populated metropolitan areas in the country by looking at the difference in actual average home price in a city and comparing it to the long-term home pricing trend for the same city to calculate how overvalued or undervalued housing markets are using publicly available data from Zillow.
Several Florida metros also signaled that prices are stabilizing as eight out of the nine measured metros saw small declines in premiums. Examples include North Port with a 75-basis point drop in its housing premium between end of December 2023 and the end of January; Deltona with a 39-basis point drop; and Jacksonville with a 16-basis point drop.
“Equity gains remain strong for current homeowners and prospective homebuyers can get a little breather knowing that prices are slightly more stable. All in all, these are good signs for the housing market,” said Eli Beracha, Ph.D., director of FIU’s Hollo School of Real Estate.
South Florida remains an area of concern for researchers as it was the only measured metro in the state where housing premiums did not decrease, instead going up by 23 basis points.
“As prices are on the upswing still in Miami and premiums aren’t showing signs of heading back to the area’s long-term pricing trend, it might be better, in terms of wealth creation, to rent and reinvest monies that would have otherwise been put into homeownership,” Johnson said.
Five years ago, when a real estate agent advised my wife and me to make an offer on a house we had seen only once − at night − and were unsure about, I thought she was being ridiculous. Today, I concede that she was being pragmatic because buyers significantly outnumbered sellers.
We bought another home before it was listed, happening to spot the “Coming Soon” sign out front. That was my preview of the housing shortage. Then COVID-19 supercharged the national housing crisis.
You may know the rule of thumb not to spend more than 30% of your income on housing. Redfin calculated that only 15.5% of homes bought last year would have a mortgage costing less than 30% of local median income, a record well below the pre-pandemic norm.
A new report from Harvard’s Joint Center for Housing Studies found that in 2022, a record half of U.S. renters were “cost burdened,” spending more than 30% of their income on rent and utilities. About 27% of renter households spent more than half of their income on housing.
The root cause of this financial hardship is a shortage of homes, although some housing advocates question or deny that reality. But the housing shortage is a literal shortage. We can see it from various pieces of evidence.
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Housing price index is at near record high
America built far fewer homes in recent years. U.S. private home construction crashed before the 2008 mortgage crisis (measured in total units). Only in late 2021 did it climb back up to its pre-Great Recession peak.
Homebuilding is rebounding, but we have a lot of catching up to do. The Case-Shiller housing price index sits near an all-time high.
The median age of first-time homebuyers also is near a record high, at 35.
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Investment firms have owned many multifamily buildings for decades. They now are buying a significant number of houses because they expect a continued shortage to boost those properties’ values.
Economists argue about inflation and minimum wage laws, but they overwhelmingly agree we have a housing shortage. “Place the Blame Where It Belongs,” declared a recent Urban Institute report on the shortage. Economists are still figuring out how to measure it, but various estimates place the national shortage of homes in a broad range, from 4 million to 20 million.
Rising rents trigger increase in people without stable housing
It was a moment, not a number, that finally convinced me of the housing shortage. I started an all-volunteer housing advocacy group in 2021 and about a year later was invited to tour a homeless shelter. A staff member explained that rising rents had increased the local population without stable housing, and that the shelter struggled to find available homes to place its clients in.
I have since heard the same thing from staff at other shelters in my state. I have also heard chilling stories about residents of my city living in unsafe, overcrowded conditions.
Low supply lets landlords jack up rents. It prevents people from leaving abusive partners. It forces California college students to sleep in their cars.
The housing shortage is all too real. Only building many more homes will make housing affordable again.
Luca Gattoni-Celli is a Young Voices contributor and the founder of YIMBYs of Northern Virginia. Follow him on X @TheGattoniCelli
It may come as no surprise that home prices are continuing to rise in 2024: The median sale price for an existing home was 4.4% higher in December 2023 than in December 2022, according to the National Association of Realtors. Not only that, mortgage rates are twice as high now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.
Daryl Fairweather the chief economist at Redfin recently told USA TODAY that the current housing market is “the least affordable housing market in recent memory.”
Although some Americans view homeownership as a rite of passage, the current housing market has made renting look more attractive. A 2023 analysis by Realtor.com found that renting was cheaper than buying in 47 of the 50 largest metropolitan areas.
See how much homes are valued in your county
For the roughly two-thirds of Americans who do own homes, location is a major determinate of their home’s value. Home ownership is a major financial asset to many households and knowing the worth of a home can help families decide to buy or sell.
County level data of housing statistics from the the American Community Survey shows how much homes are valued at across the country. See the median value of homes in each U.S. county:
What are the most expensive housing markets in the U.S.?
The following counties have the highest median home values:
- Santa Clara County, CA: $1,583,130
- San Mateo County, CA: $1,573,470
- Marin County, CA: $1,454,450
- San Francisco County, CA: $1,332,660
- Nantucket County, MA: $1,313,450
Where is it cheapest to buy a home in the U.S.?
The following counties have the lowest median home values:
- Todd County, SD: $42,940
- Cochran County, TX: $50,140
- McDowell County, WV: $50,960
- Cottle County, TX: $53,690
- Stonewall County, TX: $57,140
Why now is a great time to rent:‘The least affordable housing market in recent memory’
Housing market predictions:Six experts weigh in on the real estate outlook in 2024
How was the data collected?
The National Association of Realtors analyzed data from the Census Bureau’s American Community Survey of median housing prices for 3,110 counties and county equivalents across the U.S. Home values reflect the overall worth of all homes in a given area rather than solely home sales data, according to the NAR.
Daniel de Visé contributed to this reporting
As mortgage interest rates slowly tick down, who are today’s home buyers and what motivates them to make a purchase?
A recent National Association of Home Builders analysis of the latest American Housing Survey provides insight into recent home buyers and the home buying process. Conducted in odd-numbered years by the U.S. Census Bureau, the 2021 AHS studied 10.2 million households that bought a home in the previous two years.
Of these households, 40% were buying their first home, while 7% were purchasing a new home. In general, new home buyers are older, make more money, and are purchasing bigger, more expensive homes. On the other hand, first-time home buyers are younger, make less money, and are purchasing smaller, less expensive homes.
Home buyers said the top two reasons for choosing a home were “for a better home” (60%) and “a better neighborhood” (49%). Household formulation was third. More first-time home buyers reported forming a new household as the top reason for moving compared to buyers who purchased new homes seeking a better neighborhood.
The survey also asked about the size of homes and found that newly built homes tend to be larger. Nearly a quarter (24%) of new homes were between 1,500 to 1,999 square feet, and 23% were between 3,000 to 3,999 square feet. Compared to newly built homes, homes purchased by first-time buyers tend to be relatively smaller, with 31.6% homes between 1,000 to 1,499 square feet. The median size of new homes is 2,334 square feet, while the median size of homes bought by first-time buyers is 1,669 square feet.
Saving money to purchase a home is an important part of the process. The survey results provided insights on how much money buyers allocated to downpayments. NAHB analysis found that half (50%) of all buyers had a downpayment of 0 to 20%. Only 18% purchased their home without a downpayment. Among all recent home buyers, first-time buyers had relatively smaller down payments. A majority (82%) of first-time home buyers put no more than 20% down.
As single-family home construction expands this year and interest rates become favorable, many individuals and families may start planning to buy a new home.
Mike Thomas is 2024 president of the Building Industry Association of Stark & East Central Ohio.
Generations of consumers have embraced homeownership as part of the American dream. Lately, though, it looks more like a pipe dream.
“Housing is becoming a luxury good,” said Christopher Mayer, a Columbia University economist.
The upside? It’s a great time to rent. The spiraling costs of homeownership have turned the perennial rent-vs.-own equation on its head. In most of the nation’s largest cities, renting is now far cheaper.
The median sales price for existing homes rose more than 40% from early 2020 to mid-2022, to a seasonal peak just above $400,000, according to the National Association of Realtors.
Prices are still rising: The median sale price for an existing home was 4.4% higher in December 2023 than in December 2022.
Learn more: Best personal loans
Mortgage rates, meanwhile, are twice as high now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.
Taken together, those two trends yield frightening math.
Rising mortgage rates should have pushed home prices down. They didn’t
Imagine you bought a $400,000 home, and you made a 20% down payment.
At 3.2% interest, your monthly principal and interest on a 30-year mortgage would have totaled $1,383, according to a Bankrate mortgage calculator.
At 6.8%, the same mortgage would cost you $2,086.
“It’s the least affordable housing market in recent memory,” said Daryl Fairweather, chief economist at Redfin.
Rising interest rates slowed the upward march of home prices, even leading to small declines in some months. Yet, the seller’s market has endured. Here are some reasons:
- Developers haven’t been building enough new homes to keep up with demand.
- The covid pandemic and remote work boom seeded even more demand, as workers sought larger homes.
- Homeowners with historically low mortgage rates don’t want to sell.
“It’s kind of the perfect storm, if you’re a consumer,” Mayer said. ‘“Perfect storm’ in a bad way.”
Homeownership has long been regarded as a rite of passage
The prohibitive costs of home purchase are reshaping common wisdom about the merits of homeownership.
Americans have long regarded home ownership as a rite of passage. Roughly two-thirds of Americans own homes. Many households count their home as their main asset.
Lately, however, the rent-or-buy calculus has favored the renter.
Many factors go into the equation.
Potential buyers consider how long they’re likely to stay in the home, how much money they can leverage as a down payment, how much interest they’ll pay on the mortgage, and whether the home is likely to increase in value.
Potential renters factor in current rental rates, whether rents are likely to rise, and the costs of rental insurance.
In a typical housing market, a home purchase might make sense for anyone who expects to stay put for, say, five years. That’s enough time to make a dent in your mortgage, building equity in the home, and for its market value to rise. Sell a home after five or 10 years, the theory goes, and you’re likely to profit.
That equation might still work. Yet, housing prices have climbed so high that many potential buyers can’t afford the investment.
“For a lot of people, it’s not an issue of choice,” Mayer said.
In the current housing market, renting looks increasingly attractive.
A 2023 analysis by Realtor.com found that renting was cheaper than buying in 47 of the 50 largest metropolitan areas.
In Austin, Texas, the monthly cost of buying a starter home was $3,946, the analysis found. That’s more than twice the monthly cost of renting, $1,670. The monthly savings: $2,276.
The report found just three metro areas where it remained cheaper to buy: Pittsburgh; Memphis, Tennessee; and Birmingham, Alabama.
A housing expert goes from owner to renter
Elizabeth Renter, a senior writer at NerdWallet who studies home prices, ran the numbers in central Durham, North Carolina, for an upcoming move. She decided to rent.
A Realtor.com rent-or-buy calculator shows home prices averaging $550,000 in central Durham. A home at that price would cost about $2,868 in monthly principal and interest, assuming a 20% downpayment and 6.8% interest. Rents in central Durham average around $1,700 a month. Renting is the cheaper option.
“I’ve never lived in Durham,” she said. “I don’t know if I want to stay in Durham long-term. So, I’m not ready to buy a house in Durham.”
Renter is selling her home, a Victorian fixer-upper in Kansas. She’s tired of fixing things.
“I’m going to love calling the landlord when something breaks,” she joked.
Rents are rising in America, just like home prices, but not at the same pace.
Rents averaged $1,958 nationwide in January, up exactly one dollar from December, according to a NerdWallet analysis.
Rents are 29% higher now than before the pandemic, NerdWallet reports.
But economists don’t expect a big spike in rents in the months to come. One reason: A surge in construction of rental housing.
“We have seen rents slow in recent months,” said Danielle Hale, chief economist at Realtor.com. “So, for people who are renting, you can take advantage of the fact that your rent may possibly go down. More possibly, it will stay fixed.”
Will the housing market ever go down?
Homeownership won’t become more affordable, economists say, without a steep decline in interest rates, home prices, or both.
Economic forecasts suggest mortgage rates might ease later this year, following a series of predicted rate cuts by the Fed.
“There is almost complete consensus that rates will come down,” said Matt Vernon, head of consumer lending at Bank of America.
Home prices are likely to remain high, largely as a matter of simple supply and demand: The pickings are slim. Sales of existing homes bottomed out in 2023, as the nation’s homeowners refused to budge.
Many homeowners refinanced their mortgages at historically low rates, before and during the pandemic. Most mortgage holders now have interest rates of 5% or lower. Home equity stands near historic highs.
“Unless you have to sell, you’ll just stay put,” said Odeta Kushi, deputy chief economist at First American Financial Corporation.
Rent or buy?The gap is narrowing for affordability in the US
Roughly two-fifths of American homes are owned free and clear, Kushi said, unencumbered by a mortgage.
“The nuance there is that a lot of those homes are owned by the baby boomer generation,” she said. “Will they move at this point? Maybe not.”
Daniel de Visé covers personal finance for USA Today.
Investing in Maryland is a safe bet, according to a recently released Maryland Economic Development Association study.
The January report, completed with the help of Salisbury University’s Business Economic and Community Outreach Network, found every dollar invested in county economic development operations in Maryland yielded an estimated $9.17 in return.
“This is a wonderful opportunity to showcase the impact of the economic development community in the state of Maryland,” said John Hickman, director of BEACON.
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The study was conducted to better quantify the impact of economic development efforts using empirical data to demonstrate the importance and value of economic development programs. The data, compiled by BEACON’s research team, focused on jobs added or retained, as reported by county economic development offices, and the funding invested by each county to support economic development operations.
Analysis of the 2022 and 2023 data supplied by participating county economic development offices, modeled with IMPLAN, a regional economic analysis software application, revealed varying returns on investment across communities. The estimated statewide average return for 2022 and 2023 demonstrated the generated state and local tax revenue for each dollar invested.
“As the trade association for professionals in the state at every level, it’s our partners that contribute to economic development. It includes housing and community (investment) and workforce development coming together to enhance an economy. We wanted to quantify it in terms of dollar amount on that return on investment,” said Lawrence Twele, president and founder of Eastport Partners and members of the association for over 20 years.
Forming an Eastern Shore economic forecast
Anticipating the economic needs of a growing Eastern Shore means taking stock of its assets. In Wicomico County, that starts with recognizing that much of its success boils down to location.
“This study gives a sense of investment on a broad basis that is relayed to the legislative bodies that need this data,” said David Ryan, executive director of Salisbury Wicomico Economic Development. “Our major assets are two highways intersecting in Salisbury, freight rail networks, and the Wicomico River that brings agricultural products and fuel and building aggregates. That moves the supply chain in the county, and we still have the regional airport.”
According to Ryan, the Salisbury Regional Airport accounts for an estimated $150 million in return on investment and economic impact.
Training programs like those for aviation maintenance technicians are key in addressing the shortage in labor for the next 20 years. The creation of high-paying job also draws a workforce that will need additional industries like housing, utilities and other infrastructure. More importantly, it adds to a healthy tax base.
“(This) is an opportunity to grow the aviation and aeronautics sector. Our region’s economy includes agriculture, healthcare, higher education and manufacturing. We can add other sectors to that, and not every community has an airport,” Ryan said.
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Post-pandemic, ‘an influx of interest in Somerset County’
Daniel Thompson, executive director of Somerset County Economic Development, echoed concerns over labor shortages and noted the pandemic came with its own economic challenges and surprises.
“As a rural area with a smaller population, our workforce tends to come from outside the county to sustain business growth,” Thompson said. “Before the pandemic, we were competing with the more metropolitan areas across the state, but during, we actually saw an influx of interest in Somerset County. Many people were stepping back from their business model and started looking into rural parts of Maryland.”
That coincided with aggressive market positioning to bring natural gas and its related infrastructure into the county. County commissioners also doubled down on their investment into broadband internet.
“We had incentives like enterprise and opportunity zones, and we marketed them. Things like quality of service and relationships with the contacts were important. It was more than just getting businesses there, it was getting them there for the long haul,” Thompson said.
Concerns over cyclical troubles in business were tempered by assurances the county would continue to support investors’ business goals.
Investments pay off with jobs, tax revenue and more
“The impacts of these investments is that for every project the county worked on, it retained jobs, it attracted new ones, and those jobs and the income taxes they create and taxes those businesses paid all come back as revenue. This was a way of telling the story of that return,” Twele said.
The association behind the study, in cooperation with BEACON, is a nonprofit organization of economic development professionals. Established in 1961, MEDA members promote the economic well-being of Maryland by working to improve the state’s business climate and the professionalism of those in the field of economic development.
MEDA’s membership includes economic development practitioners employed by the government, businesses, and chambers of commerce as well as other professionals with an interest in the economy of Maryland.
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- The median price of a single-family house in December was $427,000
- Competition is increasing for the few homes on the market
Over the weekend, real estate agent Jill Sweetman hosted three open houses.
Despite occurring on some of the coldest days of the winter so far, each open house pulled in 20 to 25 people, which came as a surprise.
“It was biting cold, it was miserable, and normally when the weather is terrible, no one comes out to see houses,” Sweetman said.
What Sweetman saw goes a long way to describe the current state of the housing market as the Rhode Island Association of Realtors released the housing sales data for December 2023.
In December, the median price of a single-family home dipped slightly to $427,000, down $4,000 from November. The median house price is up 10% from December 2022 and 50% from December 2019.
“People are getting desperate for houses again, because all these people braved temperatures in the teens to come and see these houses,” said Sweetman, who is with Nathan Clark and Associates.
In December, the number of houses listed on the market continued a downward slide, with 917, down from 1,152 in November. The number of houses sold fell from 569 in November to 532 in December.
When Sweetman checked the number of listings on Monday morning, the number of houses listed had sunk even lower, to 708.
What November’s market looked like:House prices and interest rates are down in Rhode Island, but does it really matter?
Interest rates keep sales depressed, lack of inventory keeps prices high
“We’re in a weird limbo area where sellers aren’t putting their homes onto the market, and for buyers there are no homes, so when there is a really good house, people are competing for it, even though interest rates aren’t fantastic,” Sweetman said.
Interest rates have been climbing, mostly, since record lows in 2021 and 2022, dropping below 3%, peaking at 7.8% in October 2023 and then easing back down to 6.6% as of Jan. 18, according to data from the mortgage lender Freddie Mac.
Higher interest rates normally depress prices as demand slows, but when there is little supply, prices stay the same or barely decrease.
“This is like it was at the start of 2022, when there were like 680 single-family homes on the market,” Sweetman said. “It seems like we’re getting back to that.”
With the market so tight, prices so high and increased mortgage rates reducing buying power, Sweetman said, it’s difficult to make offers stand out, and it isn’t always the highest bidder that wins. Often, it’s the person who offers the smoothest or most secure house sale.
Sweetman recently helped her clients buy a house that was being sold by the former owner’s estate, including all of the furniture, knick-knacks, all of the things that accumulate over a lifetime. To win the bid, they offered to take the house as-is and deal with cleaning out the stuff themselves.
“Junk removal costs $1,000 to $1,500. They take everything out of the old house and you’ve spent $1,500 and were picked over five other people – versus tacking $50,000 on to a mortgage,” Sweetman said.
What the multi-family markets look like
While single-family homes get most of the attention and make up most of the housing stock, condos and multi-family homes are hot commodities.
The median price of a multi-family house dipped slightly to $480,000 in December, down from $492,000 in November and $482,000 in October, but still below the all-time high of $500,000 in June and July 2023.
The number of listings was down slightly in December to 214, from 220 in November.
Multi-family house prices have seen the biggest percentage increase since the pandemic, with December’s median price 68% higher than it was in December 2019. Multi-family houses have been relatively quick to sell, with an average of 23 days on the market for the last three months of 2023.
In all, there were 214 multi-family listings in December, which has dropped to 176 as of this week.
What the RI condo market looks like
With condos, the median price was up slightly, to $360,000, up $3,500 over November. The cost of condos is up 60% compared with December 2019.
Condos are spending longer on the market, 37 days in December compared to 27 days in November. The number of condos listed on the market decreased slightly to 214 in December. As of this week, it’s even lower, at 197.
Houses priced correctly will bring lines, competing offers
When a house is right in that sweet spot, near the new median price, $350,000 to $450,000, appears to be worth it and is in decent shape, it will go fast and there will be competing offers, Sweetman said.
For her buyers, that means going to the first open house scheduled, even if it’s a bitterly cold weeknight, and either offering more than the asking price or figuring out what the seller wants and making that part of the offer.
“Sometimes it’s offering nice terms to a seller, like you’re willing to pay some of their closing costs,” Sweetman said. “Again, it’s a nice way to spend a small amount of money and get a big result.”
While some sellers want top dollar, others just want to move on.
“A smooth transaction where nothing falls apart is often worth more than an extra $20,000,” Sweetman said.
Onslaught of natural disasters affects buyers and sellers
The recent bouts of flooding and tornado-inducing storms have been hitting many of Sweetman’s would-be buyers and sellers.
One couple who own a multi-family house and was looking to move into a single-family is spending the money they had saved for a down payment replacing a roof after it was torn off during a recent wind storm.
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Others are calling Sweetman to ask what to do as their basements flood for the first time since they’ve owned the houses they are now looking to sell.
“They’re spending all their money on mitigation,” she said. “It’s like a perfect storm.”
South County and Newport housing numbers
In Newport County, a total of 41 houses were sold in December, 7% of the total for the state. Jamestown, with six sales, saw the biggest swing in median price over last year, hitting $1.6 million across those six sales, compared with $725,000 across seven sales in December 2022.
Jamestown had the highest median price in the entire state, followed by Block Island, where one house sold for $1.3 million, and then Newport, with $1.1 million over six sales.
Little Compton saw the biggest decrease in single-family home sales, from five in December 2022 to none last month, followed by Newport, down to six last month compared with 16 a year ago. Little Compton was the only municipality in the state to register no sales last month, while Block Island and Hopkinton both registered a single sale.
Portsmouth was the only town in Newport County to see an increase in sales, 14, two more than in November.
Tiverton was the most affordable Newport County town, with a median price of $448,000 across 11 sales, down from 14 a year ago. The median price in Tiverton was up 23% from $357,000.
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Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.