Wilmington NC Real Estate Market Trends | Tracking New Listings Coming on The Market Monthly

Predicting Home Sales & Home Sales Price

Home Sales and Average Sales Price are the typical market indicators that are mostly discussed on the news.  I do look at these market indicators in order to gain insight into the market, but I realize that they are more of a reactionary indicator of many other market indicators.

For example, Pendings allow us to see the future of home sales. National Assocition of Realtors has begun publishing the Pending Home Sales Index a “looking into the future market indicator”.  Pendings are the homes that have received an acceptable purchase contract and are now headed to closing.

If you know how many homes are going under contract, you can pretty much anticipate or predict about how many home sales will be posted over a the next two months. Also, though home sales are down, if less homes come on the market, that can cancel the downward effect of lower home sales on home prices.

Simple supply and demand.

Why is this Graph Important?

So in this graph, we can see how many homes came on the market each month from January 2006 to December 2008.  In 2007, you can see that a lot of homes came on the market during the first four months while less homes were selling. This placed a downward pressure on the market’s absorption rate which places a strain on home prices since inventory is now increasing. But if you notice the trend of homes coming on the market for the rest of 2007, it is understandable how home prices can stabilize though home sales continue to be low.

New Listings Were Down in 2008

In 2008, this downward trend with new listings coming on the market continued significantly.

Though home sales were down in 2008, the market adjusted to the lower number of home sales with less homes coming on the market.

Local New Construction Began Slowing in 2007

One reason for this is that in Wilmington NC, we do not have huge sprawling new developments everywhere.

In many other parts of the country that have been hit hard by the housing crisis, these new developments typically continue forward adding inventory to an already overstocked market.

New Hanover housing starts began slowing in 2007 in response to the slowing housing market.  A big reason for this is that most of the new construction developments in New Hanover County are from local builders who have the ability to slow production a bit easier than the big national building corporations.

Making the Point Clear

Again, to make the point clear, with less homes coming on the market, the absorption rate adjusts, allowing us to see that less homes coming on the market can have a stabilizing affect on home prices.  If we do not see a huge spike in new listings in 2009, even if home sales stays low, our inventory will decrease bringing market stability. But, if we see listings spike up, it could mean further pressure home prices coming down.

I will be updating The Wilmington Search with this market research throughout 2009.

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