WSJ published an article Tuesday that may be received as a slap in the face by many home owners.  The article (with the byline Americans still see real estate as their best shot at wealth. It may be wishful thinking.) addresses the future of home prices.   You can read the entire article here, however below are several points I found especially noteworthy.

• Economists predict home prices will continue to fall for 1-3 years and then “scrape along the bottom” for many years after
• Historically, house prices have risen at a rate just above inflation and roughly inline with household income (some experts even say it’s a bad idea to count on your home value rising at all!)
• Home values in the Carolinas are predicted to stay strong due to retirees and immigration
• We can expect major challenges in areas where there aren’t enough young buyers to absorb inventory from boomers who are selling

The moral of the story? Real estate is not a silver bullet to wealth, but rather a good way “to get rich slowly.”  If you need to sell, price your home to move NOW- prices are falling and will continue to do so for years.

We’re excited to launch a new web log dedicated to Wilmington Real Estate Statistics. The blog includes detailed zip code reports, market briefings and a Total Market Overview (TMO™) that tracks activity according to price range to provide you with a multifaceted understanding of the market.

For example, you’ve probably heard that Wilmington is in a buyers market. You may even have read that there’s currently over 8 months of inventory available here (if you haven’t read that and would like to, click here). But did you know that if you’re home is priced around $150K, this is not the case? Homes in the $150-175k range are actually experiencing a transitional market in which the demand and supply for real estate are balanced.

In life and real estate, generalizations can be dangerous. Don’t let broad market reports fool you. If you’re a buyer, seller, investor or Realtor, make sure you know the ins and outs of the market by subscribing to the TMO™ available on WilmingtonRealEstateStats.com.

Tired of waiting around on the market for something to happen with your home? Has it been six months and still no offer? The truth of the matter is there’s one common denominator in real estate that causes houses to sell: PRICE!

Price will cure ANY condition in real estate, whether it’s a hole in the roof or a poor location. According to the National Association of Realtors, if a house has had over 10 showings with no offers, it’s overpriced. Additionally, if a house has not been shown in two weeks, it’s overpriced.

Is marketing important? ABSOLUTELY- but not more than price. As an example, if milk is $12 per gallon at Harris Teeter and $2 per gallon at Wal Mart, where would you buy it? Wal Mart! What if Harris Teeter put a dancing bear in front of its store and had paratroopers sky dive into your backyard advertising the milk for sale at $12 per gallon, where would you buy your milk then? WAL MART! At least that should be the right answer. If its not your answer, IM me for a discussion on economics.

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In recent perusings of Wilmington real estate websites, we discovered major discrepancies between agents’ reports on our current market condition. This prompted us to do some extensive research and number crunching - the results of which you can read below.

It is my opinion that 2005 was the death of the “last great Wilmington Real Estate Market” (note- not the last as in never again, but the last as in most recent). Many agents thought that it was their arrival to the Valhalla of Sales but a look at the data indicates that the fervor in the market up until September 2005 was actually the death throes of a market that had run too hot for too long. In the preceding 5 years, inventory levels had been gradually shrinking and shrinking until in late 2004, the level was so low that a buying frenzy was on. This consumed most of the remaining inventory and caused prices to skyrocket. One of the interesting side effects of this market was that people were placing contracts on new construction homes that would not close for up to 12 months (and longer in some cases). It is the sale of those new construction homes that underpinned the market in 2006.

As is the natural course for a market a correction was due. We are currently in the middle of that correction and I believe we will continue to trend towards a buyers market with no balance returning until Spring of ‘08 at the earliest.

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