The preliminary numbers for April 2011 are in and it appears that the market is slowing compared to last year. While the final numbers won’t be in until after May 15 (Realtors are notoriously lazy about recording their sales in the MLS), taking a look now gives an idea of which way the market is trending.

Between April 1 and April 29, 2011, there were 146 single family homes sold in New Hanover County. As a comparison, there were 155 single family homes sold between March 1 and March 29, 2011. For the entire month of March 2011, there were 177 homes sold, so we can probably expect another 15-20 sales to be recorded for the month of April, bringing the total number of single family home sales for April 2011 to between 160 and 170.

Compare this to the 242 single family homes sold in April 2010 and there is a strong reason to believe that the Wilmington NC Real Estate Market is slowing. I’ll take another look as on May 15 and we’ll find out the actual numbers for April 2011. All of this data is pulled from the Wilmington Regional Association of Realtors MLS.

On a side note, please be on the lookout next week as I’m going to begin my luxury home pick of the week!

Happy Spring! Since we are through the first quarter, now is a great time to take a look at the performance of the Wilmington, NC real estate market. At this point, the questions I get about the real estate market from people with whom I speak are: “is it turning around?” “Is it getting better?” Well, let’s tackle those head on! We’ll go through some big picture historical data, some more narrowly focused data and draw a few conclusions from that to paint a picture of where we are headed.

Historically across the country (and here in Wilmington as well), the average appreciation each year has been 4%. This has been true 30 or 40 years. I tested this on the Wilmington NC real estate market by creating the graph immediately below this paragraph. I could only get average sales price data as far back as 1996 (as represented by the blue line). The green line represents what 4% appreciation would have looked like, starting at the average price in 1996. Ever heard of the real estate bubble? Well, you can see it pretty clearly here where the blue line (average price) departs sharply from the green line (4% curve) starting in about 2004.

I’m sure you’ve all heard the saying “what comes up must go down.” Well, as you can see in 2007, the average sales price started to come down, and come down hard. At the end of 2009, we actually got back to the average price that we should have been at based on 4% appreciation (or about $232,000). Unfortunately, the law of averages says that the size of the bubble below the line is going to have to be about the same as the size above the line. The short answer here is that, in the BEST CASE, prices will stay the same for the foreseeable future.

So what about the first quarter? Well, here are the cold hard numbers compared to last year:

As you can see, the average sales price continues to drop in Wilmington real estate market. There is also good news in these numbers! From 2007-2009, all of the key numbers were plummeting. The fact that the two of them appear to be increasing is great news because it indicates that the market is beginning to recover.

What does all this mean? For sellers, this means that the best price that they can get is the price that they can get today. For buyers, it means that they should plan to hold their home for more than 7 years. Truthfully, purchasing real estate with plans to hold it for less than 7 years is considered speculation by professionals. All in all the market has stabilized a bit. In this Realtors opinion, the average home price in Wilmington, NC will probably stay under $225,000 this year. Please stay tuned for more posts about how to best deal with this market as a buyer and as a seller. I would love to hear your comments!

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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