If you are following the national real estate market, you may be getting mixed messages. Some areas are seeing falling prices and there is talk in the news of a “crash” or real estate slow down. Keep reading to learn what is actually happening in the Wilmington, NC market.
There are several numbers that indicate the current condition of the real estate market. The one I consider to be of great importance, and my favorite to monitor, is months of housing inventory.
Inventory is calculated as follows:
Months of Inventory = # of Active Listings / # of Closings (That month, or an average of several months)
The number of months of inventory indicates the following and gives a picture of current supply and demand:
0-3 Months indicates a seller’s market.
4-6 Months indicates a stable market (usually does not last, gets passed through on the way to either a buyer’s or seller’s market).
Over 6 Months indicates a buyer’s market.
You can see from the graph above that we have not been in a buyer’s market for several years. The closest we were to a stable market was three years ago – before COVID. We have had less than two months of inventory for two years, and there is no indication that will change anytime soon.
COVID changed the world in terms of people’s priorities and our ability to work from any location. There is a trend of people leaving colder climates and moving to the sun belt, which includes North Carolina. With Wilmington becoming a fintech center, increasing professional job opportunities and infrastructure, having a growing regional airport, and a popular well regarded university in the state, combined with its proximity to the ocean, it is becoming a hot spot for people relocating. This is a trend that is not expected to change for at least the next decade.
In addition, Wilmington is approximately 90% built, meaning there is not a lot of un-built land left within Wilmington. And although our median home price has increased from approximately $250K to $350K in the last two years, it is still relatively inexpensive to live here compared to where people are moving from. All of these factors lead to high demand and very little supply.
What does this mean to you? If you are selling, the market is still very much in your favor. Although closings have slowed down, this is a factor of fewer active listings and not demand. We are still seeing multiple offers and quick sales when homes are priced at market.
If you are buying, things are a little bit easier for you than they were a year ago. The flurry of intense activity that we experienced has slowed down, the number of active listings has decreased, and interest rates have risen. That said, the actions you need to take to successfully purchase a home have not changed. Being ready to go when the right house comes on the market is critical. Get in to see it as soon as showings are permitted, and talk to your realtor about how to structure your offer so that you will not only be competitive but are likely to be the best offer and win in a multiple offer situation. This means having your pre-approval in place before even looking at homes, and having a plan in place with your realtor for showings, particularly if you are not local.
Questions? Please reach out to me at kim@thecoastalrealestategroup.com. I’m actively helping both sellers and buyers win in this market.
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