Sept. 18; KLK Feature
Kelly Kenoyer: I’m here with Mouhcine Geuttabi, the regional economist for UNCW. THank you for joining me.
Mouhcine Geuttabi: Thank you for having me.
KK: So I am very interested in hearing about how national uncertainty in the economy is sort of impacting businesses and other organizations at the local level. Are you seeing major impacts here in the Cape Fear region?
MG: Yeah, that's a good question. I mean, the theme nationally has been uncertainty, just because we don't know what we don't know. At the local level, our economy seems to be humming along. The way I've been thinking about it is relative degrees of exposure. In other words, what are the sectors that are potentially most sensitive to national changes.
And so I like to think about: where does New Hanover County's money come from? So where does our GDP potentially come from? And then do a decomposition that way. And when you do that exercise, you find that, for example, the two sectors that have received most attention, manufacturing because of tariffs, agriculture because of immigration enforcement, are relatively small contributors to New Hanover County's GDP, and therefore we don't have an economy that's particularly sensitive to some of these things that we're seeing currently.
KK: So I know that we recently, at the national level, had a pretty sad-looking jobs report. Have you seen that kind of playing into things here in New Hanover County? Or does it seem like we've kind of managed to ride that wave without many problems?
MG: Yeah, we've certainly seen a deceleration in growth. There is no doubt about it. I mean, we are in a new economy that resembles pre-pandemic era growth rate. It's not that we're losing jobs, it's just that we're adding them at a much more moderate pace than we have been the last few years. And there's also been a bifurcation in the labor market. Healthcare is far and away the fastest growing sector.
KK: So would you say that we're in line with the economic picture nationally, or that we're doing a little better?
MG: Yeah, I would say we're doing better, with a caveat that our expectations have gotten anchored to what we saw over the last few years, and so the “decline” in the growth rate feels a little bit different, but I think our economy is still holding up much better than many pockets around the country.
KK: Okay, I'd like to ask a little bit about the housing market. There's been a lot of hay made about interest rates with the Fed. Can you talk a little bit about where we're at with home prices, how much that's being caused by interest rates that are driven by the Fed. Where exactly are we at with the housing market?
MG: Stalemate. Prices have not really budged very much. There has been a lot of action in the housing market, and what I mean by that is inventory has gone up quite considerably over the last year and a half, we are seeing median days on the market increase quite substantially. So I don't want to call it a buyer's market quite yet, but conditions have certainly shifted favorably towards buyers, because we're no longer seeing six and a half offers within 24 hours of listing, and so there has been a shift.
However, prices have been sticky. You know, I jokingly, lovingly say that sellers are delusional and buyers are not interested. The expectations of buyers and sellers are very, very different. Look, if interest rates were to go down by half a percentage point or a percentage point. Will that make a dent? I'm sure it will. But will it change things drastically? Probably not, because prices are still considerably higher than they were 40 years ago.
KK: So do you expect that home prices will drop in the coming year or so?
MG: I mean, they may, and we've seen a lot of pockets around the country where prices are a little bit lower than they were previously, but we do not have the conditions that would suggest a significant correction. So year over year, we may see a modest decline in prices as expectations, you know, get updated.
KK: Interesting. Thank you so much for joining us. Mouhcine Geuttabi, the regional economist for UNCW, it was a pleasure talking to you.
MG: Thank you for having me.
