Walt Dowdy
Record Low Pendings in November and December 2008
In December 2007, I couldn’t believe the record low Pendings for the Wilmington NC real estate market. I thought that was a sign that 2008 would be a rough year. Yet, to my surprise, pending contracts continually increased from the low December numbers starting in January 2008. Pendings peaked in May 2008 at 288 written offer to purchase contracts.
Sure enough, Wilmington followed the bell curve that I described in my post on home sales market trends and followed a downward trend for the rest of 2008. And when comparing the peak of 2008 to the peak in 2007, pendings were off by 25%.
After the peak in May, the steady decline in Pendings frustrated sellers who needed to sell in 2008.
In the 4th Quarter of 2008, Pendings went to a new record low reflecting my suspicion that I mentioned in my thoughts on The Wilmington Search Monthly Market Reports for November and December.
Further Price Correction in 2009
I believe it is possible that the low numbers in November and December could be a bottom for contracts written per month. Very tough to make that call with still much uncertainty with the economy. But the effect of this drop in Pendings on home prices has not been realized yet. Though less listings coming on the market helps adjust the effect of low pendings, giving us a somewhat balanced absorption rate, there will be further price correction pressure on the current inventory.
Simple Supply and Demand
Again, this is the natural economic law of supply and demand.
High supply+low demand=prices come down.
Just look at the gas station’s advertisement of gas prices today compared to gas prices last year.
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Filed under: Housing Market, Wilmington NC, Wilmington NC Home Sales Trends, Wilmington NC Real Estate Housing Market Update, Wilmington NC real estate | Tagged: Relocating to Wilmington NC, Wilmington NC, Wilmington NC real estate, Wilmington NC Real Estate Blog, Wilmington NC Real Estate Market, Wilmington NC Real Estate Predictions
