Putting it All Together

In my opinion, this is the coolest graph on the web for the Wilmington NC Real Estate Market (what a geek I am…go ahead and laugh. I can take it).

This info, at the time of this writing, can only be found on The Wilmington Search.

In this graph, we can see the relationship of new listings coming on the market, properties that are going under contract and homes that are closing each month. Very cool!

Why is this information cool (I’m digging the ‘geek grave’ deeper here)?

In 2004, which you cannot see here, the orange line went above the blue line and stayed very close to the blue line for a few months. This brought inventory levels really low, giving buyers less choices.

So what? you say

The market (sellers, buyers, and many real estate agents) didn’t realize what was happening till late 2004 / early 2005.

Homes sold in weeks instead of months. Home Prices shot up, as buyers scrambled to buy the best house possible and were willing to pay top dollar in multiple offer situations.  And in response to this buying mayhem, an insane amount of homes came on the market in 2005, 2006, and 2007.

That is right! Homeowners who were happy with their home, now all of sudden were thinking about selling as their ears caught wind of what their neighbors were getting for their houses. And thus, the Seller’s Market Vortex sucked in the multitudes.

In other words (pushing up my glasses and adjusting my pocket pen holder ), when the blue and orange line gets close and remains close, the red (sales) will follow, triggering a shift to another seller’s market (the worst time to buy if you can help it).  When everyone notices the red line (and more importantly the effect on home prices), the market will have already shifted towards the downward trend to a buyer’s market.

Seller’s markets cannot be sustained and it is not likely we will have anything similar to what we previously experienced in 2004 to 2006 in the Cape Fear Region for sometime (years).

Now don’t tell me you didn’t just learn something.

Thank you or Walt help us buy our next house is good enough for me.

Check out Lessons Learned to learn more about Housing Market Cycles.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

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.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

A Somewhat Balanced Absorption Rate?

Wilmington’s Absorption Rate has not really been that bad. If you didn’t get a chance to read it already, I explained why the Absorption Rate for the Wilmington NC real estate market has held onto to a somewhat stable market status.

I Thought We Were in Serious Trouble

At the beginning of 2008, I thought we were in for a lot of trouble.  Read my post explaining what Absorption Rate is and you will see what I mean when you look at the graph above. You can also read my last Absorption Rate Update back in June of 2008. As we progressed along, the absorption rate improved in May 2008 from the low percentage rates posted in early 2008.

Not as Bad as I Thought

Because less homes came on the market in 2008, the market didn’t take as hard of a hit as I expected in 2008.  In November, we had a big drop. But we were right back up in December.  It will be interesting to see what happens in 2009.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

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.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

Wilmington’s Real Estate Market Peaked in 2006

Where most real estate markets across the nation peaked in 2005, the Wilmington NC real estate market peaked in June of 2006. Since that time, home sales have been on a roller coaster ride….down.

Over the course of a year, home sales typically follow a bell curve with the first and last three months of each year being the months with the least amount of sales. Spring and Summer always has a higher number of home sales.

The Downward Trend

In spite of these seasonal dips and rises in 2007 and 2008, overall home sales have been on a downward trend.

As I pointed out in my November and December thoughts on the market, it is understandable that the Wilmington Market ended on a record low note when looking at the past three years of home sales.

Upcoming Updates

In my next Wilmington NC Real Estate Market Trend Update, I will share with you another graph that reveals how many new homes came on the market each month for the past three years.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

Get December’s Market Report Here

I held my breath waiting for December’s numbers to come in. November’s home sales were rough. Sure enough, December was up significantly from November, yet still down from the same period in December 2008.

Wilmington NC Home Sales

In December, home sales were up 32% from November 2008. Yet, when compared to December 2007, home sales were still down by 17%.

In January 2009, I’m expecting home sales to be slightly down in comparison to December 2008. Pendings were low in December which is typical. Less buyers write contracts in December.

Too busy buying Christmas presents right?

But, I believe Pendings will significantly increase in January and February which will post as home sales in February and March. My personal listings have seen more activity in the first three weeks of January than they did in the last three months of 2008.

Wilmington NC Average Sales Price

The Average Sales Price was down 15% when compared to the same time period of 2007. The Average Sales Price reflects 1st Quarter Prices of 2008. The Average Sales Price dropped in the 1st Quarter of 2008 from record highs in 2007. That is right! Wilmington’s highest Average Sales Price was posted in 2007 though home sales were falling in 2007.

Prices then rose in 2008 but now seem to be falling back to those low levels of early 2008. I will be posting quite a few market trend graphs throughout 2009 that will show a lot of additional insight into the market.

One thing to note about housing prices is that though home sales are low, new listings coming on the market have decreased significantly giving some balance to the market. The updated Absorption Rate Graph I will be posting will show this.

My reason for pointing this out is that if you are waiting for home prices to plunge, our local market dynamics are not indicating a steep falling off.

Wilmington NC Days on The Market

The average amount of days a house sat on the market before it sold increased by 29% from 82 days to 115 days. Days on the market did not increase from November to December 2008.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you will want to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Find out How I work as a Buyer’s Agent
• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

Click the image above to open the pdf market report. Click the link below to read:

My Thoughts on the December 2008 Wilmington NC Residential Housing Report

If you liked this free market report, you may wish to sign up for email updates to receive future Wilmington NC Real Estate Market Reports by email.

Get November’s Market Report Here

I anticipated a drop in Home Sales in November 2008 for the Wilmington NC real estate market. But I was not prepared for how steep of a drop it would be.

As I mentioned in The Big Thing I am Watching Out for in 2009, I was glued to the news for the greater part of the 4th Quarter of 2008.

I knew the implications of the uncertainty that was growing in the consumers’ mindset. As they observed one bad news report after another,  it created an increasing fear of spending that would show up in our local real estate market as it did throughout the nation.

And November’s Home Sales Numbers proved it!

Wilmington NC Home Sales

Overall, home sales in Wilmington were down 57% for November 2008 when compared to November 2007. November 2006 home sales were the first signal that our upward trend in home sales was over. November 2007 home sales were not significantly down from 2006.

But 2008 gave us a new low.

I personally believe (my opinion here) that November 2008 will be the record low and will signal the bottom in terms of home sales for our area. We’ll see if I am right!

Wilmington NC Average Sales Price

The Average Sales Price was down 6% when compared to the same time period of 2007. The fact that home sales dropped so steeply does not mean that home prices will fall the same way.

Most buyers I work with are a little bewildered by this. I must admit that I am too. But what I have learned is that seller motivation is what drives prices. And seller motivation varies from one home to the next.

At the same time, low home sales and high inventory levels are the hallmarks of a buyer’s market, and sellers who “have to” sell will have to come to terms with the market.

Future Blog Post Coming Soon:  The Five Types of Motivated Sellers Who Have No Choice but to Sell

I have a post that I plan to write in the near future here on TheWilmingtonSearch.com where I will pinpoint the Five Types of Motivated Sellers who have no choice but to sell.

I do contend that if there was a critical mass with these sellers, a significant market-wide slide in home prices would take place. But for now, since I have tracked local housing market data for several years now, I do not see that critical mass forming for a huge slide in home prices.

Wilmington NC Days on The Market

The average amount of days a house sat on the market before it sold increased slightly by 9% from 105 days to 115 days.

Stay Up to Date on the Wilmington Real Estate Market

If you enjoy staying up to date on what is going on in the local Wilmington NC real estate market, you probably would like to sign up for email updates from The Wilmington Search.

If you are familiar with using RSS readers, here is the RSS Feed.

You may also like to:

• Get the most updated Market Reports Here
• Get the latest blog posts on the Housing Market Here
• Learn more about The Wilmington Search Here
• Know the Mission of The Wilmington Search
• Contact Us Here!

Click the image above to open the pdf market report. Click the link below to read:

My Thoughts on the November 2008 Wilmington NC Residential Housing Report

If you liked this free market report, you may wish to sign up for email updates to receive future Wilmington NC Real Estate Market Reports by email.