The number of homes sold in the Cape Fear region in January fell by 32% compared to the same month last year, according to a new report.

“The housing market began the 2023 year in a state of rebalance, with many buyers and sellers remaining cautious,” stated the report by Cape Fear Realtors (CFR), compiled with statistics from the N.C. Regional Multiple Listing Service. “There is no doubt that the demand for housing remains persistent, indicated by days on market dropping four days since January 2023. However, the higher mortgage interest rates have cut into housing affordability.”

The report noted that compared to December, new listings increased by nearly 50%, pending sales were up 47%, and closed sales declined by 26%.

Even with higher mortgage rates, New Hanover, Brunswick and Pender counties experienced a 17% increase in the median sales price in January this year compared to January 2022, from $329,000 to $385,000, according to CFR.

“We are not seeing any depreciation as far as home prices, at least through the month of January. This remains a very positive sign for 2023,” said 2023 CFR President Steve Mitchell in the release. “Overall, if you look at the market, the market is still staying very strong, even with the increases in interest rates, as evidenced by the decreases in days on market, and increase in sales price. The biggest challenge continues to be the lack of inventory.”

Mitchell said he predicts this year will prove to be a mixed market.

“It will depend on what happens with inventory, interest rates, the Federal Reserve, and the bond market’s strength. If the interest rates continue to hover around 6 to 7%, I think you will see some slowing in the market versus the trends that we have enjoyed in the past; however, I do not look for it to be a significant downward curve – just a slowing down of the housing market,” he said. “Because the Cape Fear Region is positioned with having a high quality of life, tempered climate and coastal NC lifestyle, I suspect we will have less of an impact from interest rates compared to other areas.”