Who said real estate is not a roller coaster?
For almost a decade, real estate has been on at least a steady climb. Then, Covid 19 hit, and the market blasted into a new orbit. Just as everyone held their breath in March and April of 2020, the real estate market went into overdrive. At one moment, you wonder if you have enough momentum to eclipse the top of the track. The next moment, you are hoping you remembered to fasten your five-point harness as you enter the first upside-down loop of the roller coaster.
Starting in April and May of 2020, those in Huntsville saw housing inventory depleted, building supplies in shortage, and prices taking a meteoric rise. Rates stayed low, which fueled high demand in a housing shortage. Prices soared, and the roller coaster picked up speed.
At a certain point, I think those of us in the industry and even many people not in the industry began to wonder, "when is it all going to end?" Through the first half of this year, we continued to see multiple offers, houses selling above the list price and often above the appraised value. Buyers waived inspection contingencies as they fought for a chance to buy a home. As you can expect, the buyers just wanted the ride to end.
In 2022, interest rates started the year just above 3% and ended at 6.42%. These interest rate hikes bumped your monthly mortgage payment by about 45%. Something had to give. As rates jumped, the buyers began to sit on the sideline. More and more, we saw the roller coaster leave with empty seats. Our inventory has risen, and the sales have slowed. Rather than paying above the asking price, we are starting to see buyers and sellers negotiate.
For those of us that have been in the business for almost two decades, I can tell you this feels like a normal market. Rates are close to the historical average. The addiction to unusually low-interest rates will ease in time. The shock factor of a quick rise in interest rates will eventually give way to the status quo. And you know what? Our market will keep plugging along.
The question I get asked the most is, "how do you think our market will do over the next year?" The National Association of Realtors project Huntsville to be in the top 10 markets to outperform all other metro areas. In fact, we finish 7th!