As the year winds down we are closing out what could be considered the start of our recovery, we have now seen 3 months of growth in sold units over the same time frame from a year ago. From October to December of 2008 we saw the bottom of our sold units, (see chart) while our median sold price seemed to bottom out around Jan to Mar of 09’. Our pending sales index shows its lowest point around Jan 2009. We have struggled thru the year, losing value on our average sales price a drop of 9.5% from last year this time. November saw an increase of 74% over last year this time. We have heard everyone say that the primary reason for such a large increase was due to the possible ending of the $8,000 Tax credit. On November 6th the President signed the extension of the $8,000 Tax credit for First Time Home Buyers. This took a lot of pressure off getting that property closed by November 30, 2009. I believe we will see some carry over into December. As the holidays slow down some buyers, I believe the other buyers are getting ready for Spring 2010. The $8,000 tax credit goes till April 30th with properties closings up to June 30th. If you look at our listing inventory (chart) you will see that we usually have an increase in listing inventory in the spring. The Chairman of the Federal Reserve Ben Bernanke has indicated that the Fed plans to maintain the fed funds rate at extremely low levels for an extended period of time. This is based on the feds belief that inflation will remain low for the next couple of years. Last week’s 30 year fixed rate mortgage averaged 4.81% with a .70% origination fee ending 12/10/09. Are you ready for an active spring?
In the month of November we saw a decrease of 186 homes in our listing inventory, we have 5,113 homes on the market; this continues to put us in a strong buyer’s market with a listing inventory of over a 13.1 month supply. Our listing inventory has remained consistent for almost a year now. The last time we had inventory below 5,000 was January 2007. Our average list price has dropped to $379,092. For November we saw another increase in our seller concessions, it jumped to 26.7%. Our average days on the market have dropped to the 120’s, it decreased about 15 days from last month. The list to sold ratio is 94.4% up .5% from last month; we want this number to be going up. The number of homes that sold in 15 days or less continues to remain very low, 19.5% of November sold homes, same number as last month. On a rolling 12 month our sold units are down by 10.5% and improvement of 8% from last month. Our average list price has dipped below the $400,000 range for three months; we have to go back to April 2005 to find an average list price below $400,000, for November 09 it was $379,092.
Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.
Listing Inventory
In November we saw a decrease in listing inventory of 186 units, mainly due to the high number of sales and the fact that November is not known to be a strong month for listings. We are about 381 units down from December 2008. We have 5,113 single family homes for sale in our MLS. The average list price of $379,092 is down by $3,242 from last month. The average list price has decreased by .08% from Oct 2009.
Monthly Average Sold Price
Our monthly average sold price is down by 4.0% from last month and down 9.5% from November 2008. A lot of sellers seemed to have negotiated with buyers in Oct and early November thinking that the tax credit was going away and worried that there buyer would go away also, which is why we also have a high seller concession ratio this month. We are down $9,535 from last month. November average sold price ($226,494) shows a decrease of just 11.7% from year end 2008.
Monthly Sold Units
The number of sold homes is down 13.7% from last month and up 74.9% from November 2008. November saw a increase of 167 sold homes over November 2008. This is our third monthly increase in year over year sold homes since September 2005. Our monthly sold units continue to lag behind the last couple of years by as much as 9.5%. We have now had the last 7 months in 2009 with over 375 units sold compare that with 2008 and we had 8 months with 375+ units sold. You can notice that all of our big dips seem to occur on or about December. I believe we will continue to see the next couple of months with unit sales over and above the previous year. No doubt in my mind the First Time Homebuyers Tax Credit has contributed to this increase in sales units and I would anticipate it to continue over the next several months as we approach the new potential extended deadline of April 30, 2010 (more on this later).
Market Absorption rate – The number of homes sold in November, 390 divided by the current listing inventory, 5,113 gives us a 13.1 month supply of single family homes (we had a 1.0 month increase from last month). The increase in sales units for November affects this calculation. This just means that we have plenty of homes to sell. With rates where they are and plenty of inventory we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $239,838 and the average sold price is $226,494 for November which gives us a 94.4% list to sold price ratio – a increase of .4% from last month. We have now managed to stay under 95% for a year.
Seller Concessions – We had 26.7% of sold properties report a sales concession for November, an increase of 1.8%. I think we saw a lot of concessions as people were anxious to sell to buyers trying to meet the tax credit deadline. We want this number to go lower. The average concession for the month was $3,688.
Days on Market – The average days on market for the sold properties is now at 125 for November. That is almost 5 + months to keep a property on the market. Only 19.5% of the properties were placed under contract in less than 15 days for the month of November, no real change from last month.
Carolina & Kure Beach
There are currently 465 single family homes for sale and this represents a 20 unit decrease over November 2009 and 9.1% of our total WRAR inventory. The average list price is $445,268 a slight decrease of about $5,000 from October. In November there were 22 homes sold, divide that by the homes available and you have a 21.1 monthly supply of homes in Carolina and Kure Beach (we just added about 7 months). The average sold price for the month of November was $283,364 and is up from last month. In November 2008 we had 10 home sales at an average $278,152. When we look at our year to date we see that we are ahead in units by 38 and our average sold price has dipped from $372,215 (first eleven months of 2008) to a current $298,174 a decrease of 19.9%.
This data was pulled on December 14, 2009, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through November 30, 2009.
I want to thank David Flory NMLS #91592, of Cunningham Mortgage for much of the information in this report.
