SWELL Market Reports
2021 Fourth Quarter Report
Is the market solid or sliding? We answer this question and a whole lot more in this quarter’s market report.
October, November, & December
“Solid or Sliding?”
Find out what happened this fall and what’s next
Last quarter we predicted the market would start slowing down and prices would slow too, which happened.
So what’s next for our market?
This report is about the real estate market of Southeastern North Carolina, specifically the Wilmington Metro Area/Tri-county area.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, & Pender Counties
Closed Sales Month by Month
Interactive Graph
This graph shows the number of homes sold per month in the tri-county area of Southeastern NC.
As shown in the Closed Sales Month by Month graph, March home sales took off and stayed consistent all the way through August. After August though, the number of home sold declined fairly sharply. When comparing 2020 to 2021, it seems like perhaps the market is finally starting to slow down. But for how long…
The selling season started earlier in 2021 than in 2020. The lockdowns early on in 2020 hurt home sales and compressed demand. Home sales rebounded with a vengeance once we were allowed to go outside again.
2021 started off red hot, but doesn’t look nearly as impressive as 2020 was. Things aren’t always as they appear to be though…
New Listings
The New Listings graph above shows the recent trend of fewer homes being listed for sale. The next graph, New Listings- By Price Range shows a breakdown of the newly listed homes by price range. As you can clearly see, fewer and fewer homes being listed in all segments except the higher end homes. Even they have begun to level off.
The number of truly affordable homes (RED) being added to the market over the last 5 years has fallen by more than half. This is due in part because entry level homes are getting more expensive and most builders don’t want to build affordable homes. They make more from sellering more expensive houses.
Much of what is considered affordable or entry level is selling for between $200,000 and $350,000 (GREEN), which is why this price segment was leading for new listings.
As of July though, the higher end homes (PINK) have overtaken all affordable homes segments. As I’ve said before, higher end homes are really driving the market right now. Many of these buyers are older and coming from out of state, which is why they can afford the more expensive homes.
The next Closed Sales Year Over Year graph shows all homes, in all price points and is representative of our real estate market as a whole. The trendline of the graph has started to come back down after June of 2021.
Why are we seeing this change in number of homes sold?
Supply chain issues, inflation, and COVID variants have caused consumer caution. Plus there still aren’t enough homes being sold to satisfy all the available buyers, which drives prices up. These high prices and a lack of inventory means people who might have considered selling their homes and buying another are now waiting. These people are afraid they will sell and then become homeless while trying to find their next home. Buyers also don’t want to overpay for a home and many are waiting until the market cools to buy.
Closed Sales Year Over Year
Interactive Graph
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
Something interesting is happening here…
Annual Home Sales Year by Year
The first graph, Closed Sales Year Over Year, shows home sales on the decline, but the one just above, Annual Home Sales Year by Year, shows more homes were sold in 2021 than in the last 5 years.
So what’s going on?!
Both graphs are accurate and tell different stories. The first is useful to help spot trends in data. Each point represents the previous 12 months of total sales. The closed sales line was going up gradually from 2016 until 2020. Then all of the sudden the market took off! Which the second bar graph also shows.
In 2020, home sales stalled in the early days of COVID and then exploded. Buyers flocked to the market and bought up everything in sight. Demand stayed high for the remainder of the year. 2021 was more like a regular year in real estate where sales fall off in the Winter, heat up in Spring, catch fire in Summer, and begin cooling again in the Fall. The way the first graph shows data, this isn’t represented well and it looks as though homes sales fell off a cliff after June of 2021. In actuality, the market just went back to normal.
So is the market Solid or Sliding?
Right now the market is solid but it is slowly sliding down and cooling off. The chief economist for the National Association of Realtors says that he believes the real estate market will stabilize in 2022 along with prices. This means the market will go from our previously unsustainable WHITE HOT craziness to a more reasonable Red hot level. More and more Millennials are entering the housing market as they understand the value of owning a home vs not. COVID and the response to COVID has opened a lot of people’s eyes to the benefits of home ownership. As long as the supply chain, inflation, and COVID issues are quickly corrected by the government, I agree with the chief economist’s assessment. But if inflation isn’t controlled and COVID runs rampant with seemingly little government effectiveness, the national economy could turn. Which would cause all markets to contract, especially the real estate market. Typically the federal government has little impact on our day to day lives. But if we don’t right this ship in time, we are all going down with it…
All of these factors have contributed to the housing inventory reaching historic lows and prices reaching historic highs.
Days On Market
In the Tri-County area
The next graph shows how the average Days On Market by Month for a listed home by month. Over the last 5 years, the time a home is listed for sale before going under contract has been falling. Since early 2021 the time has fallen off of a cliff. In September, the days on market hit the bottom and bounced.
Things have started to change.
This trend could reverse course but I think Days On Market will keep going up over the next few months as the market begins to slow and balance.
Days On Market by Month
Average Sales Price
The average price of homes sold in the Tri-county area has been steadily climbing over the last five years, which reflect the high demand for homes in this area. As you can see, the average sales price hit a peak in May and has remained relatively the same for the rest of the year.
This tells me that demand may be starting to soften, that buyers aren’t as willing to pay these new, higher prices for homes as they have been.
This trend will likely continue throughout 2022. With inflation rising, consumer purchasing power has gone down as wages remain relatively unchanged. This financial strain will likely keep many from buying a home that might want to otherwise. As the supply chain goes back to normal, so will the prices of goods and services, which will help buyers.
Unfortunately, if the government don’t correct these inflation issues fast enough the Fed will have to raise interest rates. This will slow inflation but it will make it impossible for some buyers to purchase a home. This in turn will cause demand for homes to fall, causing home prices to fall and the market to correct. As of this moment, we still don’t know which way things will go…
The Big Picture
The market seems to be levelling off
Demand for home-ownership is still very high
Home sales numbers will fall in the next few months
Home prices may stay about the same or continue to rise slowly
Higher-end home sales are still driving the market
Affordable homes sales are on the decline
What does this mean?
SHORT-TERM: Next 2-3 months
This Winter the market will begin to see the number of homes sold fall even more. High end homes will probably continue to drive the market.
Every Fall and Winter home sales begin to slip. The weather cools and children settle into the new school year. Fewer people want to move so fewer homes are sold this time of year. The data is already showing this.
LONGER-TERM: Next 3-6 months
This Spring and Summer we can expect to see the real estate market rebound as it normally does. Prices will remain high and relatively stable.
It is always difficult to predict what will happen in the future. There are so many factors that can affect the real estate market and the economy at large. The economy and the world are in flux. Changes are happening slowly, which means it takes awhile to figure out what’s actually going on. Jobs seem to be returning but unemployment is on the rise again. U.S. politicians are fighting and China might be in danger financially. In spite of vaccines, Covid is still raging and doesn’t seem to be improving much.
One strong driver of the real estate market is low interest loans and their availability. Demand for homes will probably stay high as long as interest rates stay low, which drives the market. The federal government doesn’t want to raise rates because it could shock the overall economy while it’s still vulnerable. The Federal Reserve has indicated they want to raise interest rates in 2023, which still sent shocks through Wall Street.
Interest rates may still rise as 10 year Treasury Bond yields rise. They rose sharply in the first quarter of 2021, causing interest rates to go up as well. Bonds yields have slowly fallen over the second and third quarter until mid-August. They have been on the rise ever since with interest rates following behind. If we see a strengthening America economy over the next few months, interest rates will continue to rise…
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Now is still a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates. The fall and winter are the best time to find “deals” for buyers.
LONGER-TERM: Next 3-6 months
Demand will rise in the Spring and in the Summer. More homes will come on the market and prices may rise slowly. We are getting closer to a crossroads where the economy and real estate markets will be deeply affected. If the economy improves, this will carry the real estate market on a little further. If the economy worsens, then demand will fall. We may have just seen the peak of this real estate market. Then again, we may not. It’s hard to say yet, but we should know soon.
Longer-term will still be a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers will still have low mortgage rates.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2021 Third Quarter Report
Is this the beginning of the end? Last quarter we predicted the market would start levelling off and prices would continue to rise, which happened. So what’s next for our market?
July, August, & September
“The Beginning of the End?”
Find out what happened this summer and what’s next
Last quarter we predicted the market would start levelling off and prices would continue to rise, which happened.
So what’s next for our market?
This report is about the real estate market of Southeastern North Carolina, specifically the Wilmington Metro Area/Tri-county area.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, & Pender Counties
Closed Sales Month by Month
Interactive Graph
This graph shows the number of homes sold per month in the tri-county area of Southeastern NC.
After March, the number of homes sold started to level off. Pretty clearly after June, the number of home sold started to decline fairly sharply. We are finally starting to see a slow down in the market. But for how long…
The number of homes sold to date, when compared to 2020, are still very strong. 11,660 homes have sold since January compared to 10,533 sold in the same period of 2020. That’s a 10.7% increase for those who love numbers!
The selling season started earlier this year than in 2020. The lockdowns early on in 2020 hurt home sales. But sales rebounded with a vengeance once we were allowed to go outside again! 2021 started off red hot, but has begun to stall. Now, in the third quarter we can see the market has started to soften but the real question is what’s next and how long will it last?
New Listings
The New Listings graph above shows the recent trend of fewer homes being listed for sale. The next graph shows a breakdown of the newly listed homes by price range. As you can clearly see, fewer and fewer homes being listed in all segments except the higher end homes.
The number of truly affordable homes (RED) being added to the market over the last 5 years has fallen by more than half. This is due in part because entry level homes are getting more expensive and most builders don’t want to build affordable homes.
The reason being the profit margins aren’t as big as they are for the more expensive homes. Much of what is considered affordable or entry level is selling for between $200,000 and $350,000 (GREEN), which is why this price segment was leading for new listings. As of July though, the higher end homes (PINK) have overtaken all affordable homes segments. As I’ve said before, higher end homes are really driving the market right now.
Many of these buyers are older and coming from out of state, which is why they can afford the more expensive homes.
The next Closed Sales Year Over Year graph shows all homes, in all price points and is representative of our real estate market as a whole. The trendline of the graph has started to come back down since last quarter.
So why are we seeing this change in number of homes sold?
There aren’t enough homes being sold to satisfy all the available buyers. This drives prices up. These high prices and lack of inventory means people who might have considered selling their homes and buying another are now waiting. These people are afraid they will sell and then become homeless while trying to find a home to buy. Buyers are also tired of overpaying for homes so many are probably waiting until the market cools to buy.
Closed Sales Year Over Year
Interactive Graph
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
Wilmington and Southeastern NC is a popular place for people to move to, especially from places like the Northeast and the West Coast. They are selling their homes elsewhere but that doesn’t help our inventory locally. Renters are also starting to understand the benefits of homeownership, so they are looking for homes to buy. Because they don’t have a home to sell, this doesn’t help our inventory either. Mortgage interest rates are still at historic lows but the economy appears to be in stand-by along.
All of these factors have contributed to the housing inventory reaching historic lows and prices reaching historic highs.
Days On Market
In the Tri-County area
The next graph shows how the average Days On Market for a listed home by month. Over the last 5 years, the time a home is listed for sale before going under contract has been falling. Since early 2021 the time has fallen off of a cliff. In September, the days on market hit the bottom and bounced.
Things have started to change.
This trend could reverse course but I think Days On Market will keep going up over the next few months.
Days On Market by Month
Median Sales Price
The median sales price of homes sold in the Tri-county area have been climbing over the last five years, which reflect the high demand for homes in this area. As you can see, the median price in July hit a peak and then plateaued for the rest of the quarter.
This tells me that demand for homes may be starting to soften, that buyers aren’t as willing to pay as much for homes as they have been.
This could be temporary, like August 2020 to April of 2021. During this time the median sales price basically stayed the same. It fluctuated up and down but ultimately the price stagnated until May when it began to take off again. This time frame coincides with the election and spikes in Covid cases as well as falling sales numbers.
The Big Picture
The market is levelling off, possibly reversing
Demand for home-ownership is still very high
Home sales numbers will fall in the short term
Home prices may continue to rise slowly or may stay about the same
High-end home sales are driving the market
Affordable homes sales are on the decline
What does this mean?
SHORT-TERM: Next 2-3 months
This Fall the market will begin to see the number of homes sold fall even more. High end homes will probably continue to drive the market.
Every Fall home sales begin to slip. The weather cools and children settle into the new school year. Fewer people want to move so fewer homes are sold this time of year. The data is already showing this.
The question is, is the reason sales are slumping because of the seasons or because things are changing?
LONGER-TERM: Next 3-6 months
This Winter we can expect to see the real estate market remain slow until the Spring. Prices will remain high but may start to fall.
It is always difficult to predict what will happen in the future. There are so many factors that can affect the real estate market and the economy at large. The economy and the world are in flux. Changes are happening slowly, which means it takes awhile to figure out what’s actually going on. Jobs seem to be returning but unemployment is on the rise again. U.S. politicians are fighting and China might be in danger financially. In spite of vaccines, Covid is still raging and doesn’t seem to be improving.
One strong driver of the real estate market is low interest loans and their availability. Demand for homes will probably stay high as long as interest rates stay low, which drives the market. The federal government doesn’t want to raise rates because it could shock the overall economy while it’s still vulnerable. The Federal Reserve has indicated they want to raise interest rates in 2023, which still sent shocks through Wall Street.
Interest rates may still rise as 10 year Treasury Bond yields rise. They rose sharply in the first quarter of 2021, causing interest rates to go up as well. Bonds yields have slowly fallen over the second and third quarter until mid-August. They have been on the rise ever since with interest rates following behind. If we see a strengthening America economy over the next few months, interest rates will continue to rise…
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Now is still a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates. The fall and winter are the best time to find “deals” for buyers.
LONGER-TERM: Next 3-6 months
We may be seeing the peak of this real estate market. Then again, we may not be. Demand is still strong and interest rates are still at historic lows. Generally, we are at a crossroads. If the economy improves, this will carry the real estate market on a little further. If the economy worsens, then this is probably the peak of the market. We need more time to know for sure…
Longer-term will still be a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers will still have historically low mortgage rates. The winter is the best time to find “deals” for buyers.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2021 Second Quarter Report
This year was off to a crazy start but things are changing…
April, May, & June
Here’s what’s happened this spring and what’s next!
Last quarter we predicted the market would heat up and prices would continue to rise, which happened.
So what’s next?
This report is about the real estate market of Southeastern North Carolina, specifically the Wilmington Metro Area/Tri-county area.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, & Pender Counties
“Bubble Bubble, Here Comes Trouble”
Closed Sales Month by Month
Click image for Interactive Graph
This graph shows the number of homes sold per month in the tri-county area of southeastern NC.
The Closed Sales graph shows the huge spike in homes sold this March. The spike is especially strong for the month of March. These kinds of big jumps in home sales are pretty normal because most people don’t want to buy or sell homes in the winter, they wait for the warmer Spring weather or when their kids are out of school.
Since March, the number of closed sales has started to level off. With home prices at record highs and inventories at record lows, we may be finally starting to see a slow down in the market. Maybe…
When compared to 2020, this year’s numbers seem not as strong but when compared to previous years, 2021 is still set to be a solid year for real estate sales locally.
New Listings
Click image for Interactive Graph
This graph shows the number of new homes listed for sale year over year, separated by price range, in the tri-county area of southeastern NC.
The New Listings graph shows a breakdown of the newly listed homes by price range. As you can clearly see, there are fewer and fewer affordably priced homes being added to the market over the last 5 years. This is due in part because entry level homes are getting more expensive and most builders don’t want to build affordable homes. The reason is the profit margins aren’t as big as they are for more expensive homes.
Much of what is considered affordable is selling for between $200,000 and $350,000, which is why this price segment is in the lead for new listings. As of June, the higher end homes have very nearly caught up. As I’ve said before, higher end homes are really driving the market right now. Many of these buyers are older and coming from out of state, which is why they can afford the more expensive homes. This is good and bad for reasons we will explore later in this report.
The next Closed Sales graph shows all homes, in all price points and is representative of the real estate market as a whole. The trendline of the graph has finally started to level off after 2 years of aggressive growth.
So why are we seeing this change in number of homes sold?
There aren’t enough homes being sold to satisfy all the available buyers. This drives prices up. These high prices and lack of inventory means people who might have considered selling their homes and buying another are now waiting. These people are afraid they will sell and then become homeless while trying to find a home to buy.
Closed Sales Year over Year
Click image for Interactive Graph
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
Wilmington and Southeastern NC is a popular place for people to move to, especially from places like the Northeast and the West Coast. They are selling their homes elsewhere but that doesn’t help our inventory locally. Renters are also starting to understand the benefits of homeownership, so they are looking for homes to buy. Because they don’t have a home to sell, this doesn’t help our inventory either. Mortgage interest rates are still at historic lows and the economy appears to be slowly recovering, both are significant factors in increased demand for homes.
All of these factors have contributed to housing inventory reaching historic lows.
NOTE: The graphs below are for homes sold in the “affordable range.” In this instance, “Affordable” homes are homes that sell for $350,000 or less.
Affordable Home Sales
In the Tri-County area
“Changes”
The next graph shows how the affordable housing market has started to improve versus years past. Midway through 2020 this segment began to take off like the higher-end homes that are driving the market.
Things have started to change.
Unlike the overall real estate market, affordable home sales have actually started to reverse course. This is subject to change, as there isn’t enough data available yet to make an accurate prediction of what’s to come.
If the trend continues and March 2021 is our peak month for home sales, then 2021 would be the worst year for home sales since 2015.
Closed Sales Year over Year
Click image for Interactive Graph
This graph shows the number of “affordable” homes sold per month in the tri-county area of southeastern NC.
There are still not enough homes for sale for everyone that wants one.
Supply for the overall market is currently 0.8 months as of June 2021. Supply for affordable homes is down to only 0.5 months as of June. You can see in the Months Supply graph the trend for all price points has declined significantly over the last 5 years. The supply of $350k plus homes have fallen by 83% over the last 5 years, from 14.5 months to 2.5 months. The supply levels for affordable homes was in the balanced range 5 years ago but has steadily gotten tighter and tighter.
Months Supply by Price
Click image for Interactive Graph
This graph shows the number of months supply for all price points year over year in the tri-county area of southeastern NC.
Let’s take a look at all of the different price segments together
The graph above shows the different housing price segments and how many homes sold in each per month.
Homes over $350,000: (pink line) are showing incredibly strong sales.
Homes between $250,000 and $350,000: (green line) were steadily increasing but have stalled.
Homes under $250,000: (red and blue lines) are weak and in steady decline for the last 5 years.
This tells me that the higher end homes are driving the market and the average cost of a home sold is going up.
The decline in homes under $100,000 (blue line) sold is most likely due to a lack of inventory, also investment-grade houses are selling for higher prices due to high demand and low supply.
Closed Sales by Price
Click image for Interactive Graph
This graph shows the number of homes sold for each price points year over year in the tri-county area of southeastern NC.
The Big Picture
The market is starting to level off for affordable homes
Demand for home-ownership is still high
Home sales will probably level off
Home prices will continue to rise, but more slowly
High-end home sales are driving the market
Affordable homes are becoming more expensive
What does this mean?
SHORT-TERM: Next 2-3 months
This Summer the market will be much like the Spring. Many more homes high end homes will come on the market and we may see a bump in affordable homes listed.
Southeastern NC is a very popular place to relocate to, buyer demand will remain strong. Sellers looking to stay in the area will remain wary and we probably won’t see a huge jump in new listings, especially in the affordable range.
LONGER-TERM: Next 3-6 months
This Fall we can expect to see the real estate market slow even more but prices will remain high.
It is always difficult to predict what will happen in the future. There are so many factors that can affect the real estate market and the economy at large. The economy and the world seem to be stabilizing which is good as it inspires confidence at all levels. Jobs are returning and unemployment is dropping, though not as fast as predicted or desired.
One strong driver of the real estate market is low interest loans and their availability. Demand for homes will probably stay high as long as interest rates stay low. The federal government doesn’t want to raise rates because it could shock the overall economy while it’s still vulnerable. Interest rates may still rise as 10 year Treasury Bond yields rise. They rose first quarter of 2021, causing interest rates to go up as well. Bonds yields have slowly fallen over the second quarter and with them interest rates. If we see a strengthening America economy this summer and fall, we may see interest rates rise…
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Now is still a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates.
LONGER-TERM: Next 3-6 months
I used to think buyers would probably see a rebalancing of power/leverage sometime in mid 2021 but I don’t think that will happen until early 2022. Demand is too strong and interest rates are at historic lows. The real estate market is in bubble and when it bursts, it’s going to be much more painful for a lot of Americans. It won’t be as painful for us in Southeastern NC because demand to move to the area will continue to be strong for the foreseeable future.
Longer-term will still be a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers will still have historically low mortgage rates.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2021 First Quarter Report
This year is off to a crazy start but 2020 was a crazy year… Are we set to break another record?
2021 is off to a crazy start but 2020 was a crazy year…
Last quarter we predicted a slowing and then the rebound of the market, which happened.
So what’s next?
This report is about the real estate market of Southeastern North Carolina, specifically the Wilmington Metro Area.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, and Pender Counties
“Pandemic Demand”
This graph shows the number of homes sold per month in the tri-county area of southeastern NC.
The graph shows a huge spike in the number of homes sold from February to March. Big jumps are pretty normal as most people don’t want to buy or sell homes in the winter and wait for March’s warmer weather.
The interesting thing is that our winter numbers were stronger than most years Springs or Falls numbers. The demand for homes right now is simply staggering...
We are on track for another record year in the number of homes sold.
The next graph shows all homes, in all price points and is representative of the real estate market as a whole. The trendline of the graph on the right is still nearly vertical.
So why are we seeing record numbers of homes sold?
Clearly, home-ownership has become a top priority for many in the era of the coronavirus. Mortgage interest rates are still at historic lows and the economy appears to be recovering.
Renting an apartment and living close to strangers right now is not as desirable as owning a home. Owning a home gives a sense of security and control in uncertain times.
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
Lastly, many people sense this opportunity to buy a home will end soon. At a certain point, this bubble will burst and buyers know it. Seller’s do too and those who’ve held off selling are now getting top dollar for their homes.
The whole story isn’t being told here…
NOTE: The graphs below are for homes sold in the “affordable range.” In this instance, “Affordable” homes are homes that sell for $350,000 or less.
Affordable Home Sales
In the Tri-County area
“Catching Up”
The next graph shows how the affordable housing market has started to improve versus years past. Midway through 2020 this segment began to take off like the higher-end homes that are driving the market.
This tells us a few things. It seems that more affordable housing is becoming available, more new homes and more homeowners looking to sell and cash in. Also, consumer confidence is going up. Especially for those who are middle class and lower middle class. As jobs return, so does consumer spending which is the basis of our economy.
This graph shows the number of “affordable” homes sold per month in the tri-county area of southeastern NC.
There is still not enough homes for sale for everyone that wants to buy one.
Supply for the overall market is currently 0.9 months as of March 2021. Supply for affordable homes is only 0.6 months as of March. You can see the breakdown for the individual price categories below, most have even less inventory.
Based on the two graphs above, we can see one thing is clear. Even though more affordable homes have been sold, there still isn’t enough of them to satisfy buyer demand. Combine this with the fact that most builders aren’t building affordable homes means inventory supply is going to get worse and prices will continue to climb.
Let’s take a look at all of the different price segments together real quick
The graph above shows the different housing price segments and how many homes sold in each per month. As you can see, homes over $350,000 (pink line) are showing incredibly strong sales whereas homes under $250,000 are weak and flat (red and blue lines).
The number of homes sold between $250,000 and $350,000 (green line) are steadily increasing. This tells me that once affordably priced homes are rising in value and are progressively less affordable.
Higher-end homes are often bought by people relocating to the area, especially from the Northeast or the West Coast. They sell a home and move down, often getting a much nicer home in the process.
The decline in homes under $100,000 (blue line) sold is most likely due to a lack of inventory, also investment-grade houses are selling for higher prices due to high demand and low supply.
The Big Picture
We’re off to a strong start in 2021
Coronavirus is still causing incredible demand for home-ownership
Home sales will continue to be strong
Home prices will continue to rise
High-end home sales are still driving the market
Affordable homes are becoming more expensive
What does this mean?
SHORT-TERM: Next 2-3 months
This Spring the market will continue to grow. More homes will be for sale and buyer competition is fierce!
Get ready for another record year in real estate. Because Southeastern NC is a very popular place to relocate to, buyer demand will remain strong.
LONGER-TERM: Next 3-6 months
This Summer we can expect to see the real estate market really take off and prices to get even higher.
It is always difficult to predict what will happen in the future. There are so many factors that can affect the real estate market and economy at large. Because of the vaccine rollout, things are stabilizing. This is good generally as it inspires confidence at all levels. Jobs are also returning and unemployment is dropping, heading back toward pre-Covid levels. The number of permanent jobs lost will depend on how long it takes to vaccinate most Americans. This will be the number one driver of the US economy for the next several months.
One strong driver of the real estate market is low interest loans and their availability. Demand for homes will probably stay high as long as interest rates stay low. In uncertain financial times, banks may slow down or even stop lending which would cause a sharp decline in home sales and prices to fall.
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Now is still a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates.
LONGER-TERM: Next 3-6 months
I used to think buyers would probably see a rebalancing of power/leverage sometime in mid 2021 but I don’t think that will happen until 2022 now. Demand is too strong and banks are still lending. But that means we are heading towards another real estate bubble. When the bubble bursts, it’s going to be much more painful for a lot of Americans.
Longer-term will still be a great time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers will still have historically low mortgage rates.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2020 Fourth Quarter Report
This year has been a rollercoaster and finished strong. What’s 2021 going to look like?
The Number of Homes Sold This Year Was Tremendous…
So What’s Next?
Last quarter we predicted a slowing of the market and October would stay strong for sales, which happened.
So what’s going to happen in 2021?
This report is about the real estate market of southeastern North Carolina, specifically the Wilmington Metro Area.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, and Pender Counties
Pandemic Demand
This graph shows the number of homes sold per month in the tri-county area of southeastern NC.
The graph shows a huge spike in the number of homes sold this summer. In fact, there were more homes sold in July of 2020 than at any point of the housing bubble in the early 2000’s.
In fact, more homes sold in the final quarter than did during the peak-sales months of previous years. The demand for homes right now is simply staggering...
The average number of homes sold in the tri-county area per year is approximately 11,500. This year 14,501 homes were sold, a 26% increase overall.
The image below better illustrates what’s happened this year.
The next graph shows all homes, in all price points and is representative of the real estate market as a whole. The trendline of the graph on the right is nearly vertical for much of 2020, which is phenomenal.
So why are we seeing record numbers of homes sold?
Clearly, home-ownership has become a top priority for many in the era of the coronavirus. Mortgage interest rates are at historic lows which is helping to fuel the demand for homes.
Renting an apartment and living close to strangers right now is not as desirable as owning a home. Owning a home gives a sense of security and control in uncertain times.
Lastly, many people sense this opportunity to buy a home will end soon. At a certain point, this bubble will burst and buyers know it. Seller’s do too and those who held off selling are now getting top dollar for their homes.
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
The whole story isn’t being told here though….
NOTE: The graphs below are for homes sold in the “affordable range.” In this instance, “Affordable” homes are homes that sell for $350,000 or less.
Affordable Home Sales
In the Tri-County area
Falling Behind
The next graph looks like a child’s drawing of mountains, probably the Rocky mountains… It’s actually a month by month graph of affordably priced homes sold over the last 4 years. The thing you should notice is that the mountains all look pretty similar.
Affordably priced homes have been remarkably consistent over the last 4 years. In fact, the number of affordable homes sold only increased 0.9% over the last year and increased by 1.5% over the last 4 years. By comparison the number of homes priced $350k and above have increased by 250% over the last 4 years. In 2016, 80% of homes sold were in the affordable range. In 2020, that number dropped to 65%.
This tells us a few things but the main takeaway is the majority of new homes built aren’t affordably priced. Much of these homes are actually more than $350k, our affordable threshold. All of this means we’ve hit a ceiling, this will keep prices higher longer for affordable homes. It also means it will be harder for many buyers to find a home they can afford.
This graph shows the number of “affordable” homes sold per month in the tri-county area of southeastern NC.
Let’s take a look at all of the different price segments together to get a clearer picture….
The graph above shows the different housing price segments and how many homes sold in each per month. As you can see, homes over $350,000 (pink line) are showing incredibly strong sales whereas homes under $250,000 are weak and flat (red and blue lines).
The number of homes sold between $250,000 and $350,000 (green line) are steadily increasing. This tells me that once affordably priced homes are rising in value and are progressively less affordable.
Higher-end homes are often bought by people relocating to the area, especially from the Northeast. They sell a home and move down, often getting a much nicer home in the process.
The decline in homes under $100,000 (blue line) sold is most likely due to a lack of inventory, also investment-grade houses are selling for higher prices due to high demand and low supply.
The Big Picture
We’ve had a record year with 14,501 homes sold
Much of the increase has been in homes over $350k
Coronavirus has caused incredible demand for home-ownership
Home sales will continue to be strong for awhile
Home prices will continue to rise in the short-term
High-end home sales are still driving the market
Affordable homes are becoming more expensive
What does this mean?
SHORT-TERM: Next 2-3 months
This winter, the market will continue to slow. Less homes will be for sale and fewer buyers will be looking.
The winter is a time when home sales naturally begin to decline. This winter will be no different, except for the possibility an abrupt decline in demand/sales caused by new Coronavirus lockdowns, civil unrest, economic instability, or a combination of all the above.
LONGER-TERM: Next 3-6 months
This spring we can expect to see the real estate market start to speed up again and prices to remain high.
It is always difficult to predict what will happen. One thing is certain, the US economy is in a recession and will most likely this will continue for awhile. Many jobs have been lost but with the deployment of vaccines, some of these jobs will come back relatively quickly. Many of the jobs lost will be slow to return, even after the coronavirus is no longer a threat. The number of permanent jobs lost will depend on how long it takes to vaccinate a large number of people. This will be the number one driver of the US economy for the next several months.
One strong driver of the real estate market is low interest loans and their availability. Demand for homes will probably stay high as long as interest rates stay low. In uncertain financial times, banks may slow down or even stop lending which would cause a sharp decline in home sales and prices to fall.
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Now is still a good time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates.
LONGER-TERM: Next 3-6 months
Buyers will probably see a rebalancing of power/leverage when buying homes, giving them an edge. Home prices will probably begin to level off and then slowly start to fall over the next few years.
This will be a good time to upgrade to a larger home at a discounted rate. It will also be a good time to invest in real estate, especially if you have cash. Finding a loan may become difficult which would cause an even steeper decline in home sales.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2020 Third Quarter Report
What an incredibly strong quarter, will it last?
The third quarter of 2020 has been strong. How long will it last?
Last quarter we predicted a strong summer selling season, which happened.
We also predicted that in the fall/winter we’d see the real estate market start to contract, which happened too.
So what’s going to happen next?
This report is about the real estate market of southeastern North Carolina, specifically the Wilmington Metro Area.
Real estate is local, which is to say that every market is unique. Every neighborhood is also unique within a market. That said, there are forces that impact the national real estate market as a whole. These are typically national or international economics and we are seeing them in action as we speak.
Let’s take a deeper look…
All of the graphs are interactive so feel free to explore the numbers for yourself.
Tri-County Homes Sold
New Hanover, Brunswick, and Pender Counties
Pent Up Demand
This graph shows the number of homes sold per month in the tri-county area of southeastern NC.
The graph shows a huge spike in the number of homes sold this summer. In fact, there were more homes sold in July of 2020 than at any point of the housing bubble in the early 2000’s.
The old monthly high for sales was June 2005 with 1322 homes sold that month. July 2020 beat that by 292 homes or 22%, which is simply incredible!
August and September have started to soften, which is common as fall starts and kids go back to school. This year though, more homes sold in August and September than in the same months of any previous year. Demand for homes is still strong. The number of pending home sales for September show that October will most likely be a record month for homes sold too.
This graph shows all homes, in all price points and is representative of the real estate market as a whole. The trendline of the graph on the right is still generally going up and right, which is good.
So why are we seeing record numbers of homes sold?
The main reason is pent up demand. Home buyers waited for this summer to really start buying and selling homes. This is likely due to concerns over COVID 19, a lack of information regarding the disease, and the national economy slowing down.
As consumers gained back lost confidence, many likely decided now is the time to buy or sell a home. With historically low interest rates, it makes financial sense.
Renting an apartment and living close to strangers right now is not as desirable as owning a home. Owning a home gives a sense of security and control in uncertain times.
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
The whole story isn’t being told here though….
NOTE: The graphs below are for homes sold in the “affordable range.”
In this instance, “Affordable” homes are homes that sell for $350,000 or less.
Affordable Home Sales
In the Tri-County area
Starting to Stagnate
The number of “affordable” homes sold reached a high in July, more than any other month within the last 3 years.
August sales were back with normal range and September sales are higher than normal. October will most likely be a strong month for home sales too.
High-end home sales are still contributing heavily to the growth and strength of the market. High-end homes sales are the last segment of the real estate market to grow and the first to fall. “Affordable” homes are the best segment to study to see the health of the local real estate market.
Let’s take a look at all of the different price segments together to get a clearer picture….
This graph shows the number of “affordable” homes sold per month in the tri-county area of southeastern NC.
The graph above shows the different housing price segments and how many homes sold in each per month. As you can see, homes over $350,000 are showing strong sales whereas homes under $125,000 are weak and flat.
Higher-end homes are often bought by people relocating to the area, especially from the Northeast. They sell a home and move down, often getting a much nicer home in the process.
The decline in homes under $125k sold is most likely due to a lack of inventory, also investment-grade houses are selling for higher prices due to high demand and low supply.
This graph shows the year over year number of “affordable” homes sold in the tri-county area of southeastern NC.
As you can see in the graphs on the left and below, “affordable” home sales aren’t really growing. They’ve begun to plateau as we’ve mentioned before so we won’t dwell on this too much.
There was a drop in early 2020 but sales have recovered. The current recession will get worse and we will soon see a decline in sales overall.
The Big Picture
We’ve had a record summer selling season this year
Pent up demand and renewed consumer confidence has lead to a market rebound from earlier this year
October should be a strong month for home sales
High-end home sales are helping drive the market
Affordable home sales have plateaued
The recession will likely deepen and the economy become much worse
What does this mean?
SHORT-TERM: Next 2-3 months
This fall, the market will begin to slow. Less homes will be for sale and fewer buyers will be looking.
The fall is a time when home sales naturally begin to decline. This fall will be no different, except for the possibility an abrupt decline in demand/sales caused by new Coronavirus lockdowns, civil unrest, economic instability, or a combination of all the above.
LONGER-TERM: Next 3-6 months
This winter we can expect to see the real estate market start to contract even more, though prices won’t fall yet.
It is difficult to predict what will happen, especially these days. One thing is certain, the US economy is in recession. Most likely this will continue no matter who wins the presidency. Many jobs have been lost but with a vaccine, many jobs could come back relatively quickly. The number of permanent jobs lost will depend on how long it takes to have a widely available vaccine. This will be the number one driver of the US economy for the foreseeable future.
The number one driver of the real estate market will be low interest loans and their availability. Demand for homes will probably stay high, the ability to get a loan is what will have the biggest impact on home sales. In uncertain financial times, banks may slow down or even stop lending which would cause a sharp decline in home sales.
What does this mean for you?!
SHORT-TERM: Next 2-3 months
Right now is still probably a good time to sell a home and an “alright” time to buy one. Sellers will still get top-dollar for their homes and buyers still have historically low mortgage rates.
LONGER-TERM: Next 3-6 months
Buyers will probably see a rebalancing of power/leverage when buying homes, giving them an edge. Home prices will probably begin to level off and then slowly start to fall.
This will be a good time for homeowners to buy a larger home at a discounted rate. It will also be a good time to start investing in real estate, especially if you have cash. Finding a loan may become difficult which would cause an even steeper decline in home sales.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!
2020 Second Quarter Report
Oh 2020, what a year you’ve been…
2020 has been like taking a leisurely walk in the forest on a beautiful summers day…
But all of the sudden a huge storm blows in, slamming you with wind and drenching you with rain.
Then lightning from the storm crashes into the trees above you, setting the forest on fire.
Which causes a massive bear to sleepily pop his head up from behind a log, only steps away from you.
You know your day just got bad… exactly how bad, you don’t know
This report is about the real estate market of southeastern North Carolina, specifically the Wilmington Metro Area.
In this report we won’t comment too much on the metaphoric forest we all find ourselves in right now, but these uncertain times are definitely having an effect on the real estate market locally and nationally.
Even without the use of graphs and charts, it’s easy to understand why in early 2020 the real estate market hit a snag. Despite the initial slow down in the amount of homes sold, "by the numbers it looks like we are now on a path back to normal…
All of the graphs are interactive so feel free to explore the numbers for yourself.
This graph shows the number of homes sold per month in the tri-county area of southeastern NC.
Looking at this graph, the trendline is generally going up.
You can see in September of 2018 the market took a dip after Florence hit the region. Understandably so, there were a lot of damaged homes and scared people.
We’ve recovered and had a strong 2019 which caused the trendline to keep going up and to the right.
All indications show the total number homes sold is still generally rising. This means homes are still being sold in spite of what’s happening across the country and in our own backyards.
Things look promising, right?
The graph shows us that more homes were sold in June of 2020 than any other month in the last 5 years. And the last 5 years have been hot years for real estate in southeastern NC.
It also shows the second worst May since 2015. This is because of buyer lag… From the time a buyer decides to enter the market until they get the keys is about 45 days or a month and a half. This is why we still see strong numbers for March. Most people who got keys in March, started buying in February before the coronavirus lockdowns began.
This graph shows the year over year number of homes sold in the tri-county area of southeastern NC. This graph is better for spotting trends.
As with all things, the answer is not clear or straightforward. It depends…
NOTE: The graphs below are for homes sold in the “affordable range.”
In this instance, “Affordable” homes are homes tha sell for $350,000 or less.
This graph shows the number of “affordable” homes sold per month in the tri-county area of southeastern NC.
In this graph, the trendline is not going up but looks more like it’s begun to plateau right around mid-2018. There are likely a number of factors that are contributing to this.
There’s a shortage of affordable homes for sale and has been for awhile now. This is partially because builders have focused on building more expensive homes where their profit margins are better. It’s also because the median household income is $52,756 annually for our area. Depending on a buyer’s debt, they would only be able to afford homes between $150,000 and $250,000. A lot of the homes in this price range have already been bought and sold.
This creates a price ceiling for most people looking to buy and forces most buyers to stay in this price range, driving up demand.
Looking at this graph, the number of “affordable” homes sold in June 2020 is high but not as high as June of 2017. The numbers are more inline with where we would be naturally, without coronavirus.
This also tells us that high-end home sales are contributing heavily to the growth seen in the graphs above. High-end homes sales are the last segment of the real estate market to grow and the first to fall. Affordable homes are the best segment to study to see the health of the local real estate market.
Affordable home sales have plateaued. This is particularly obvious when looking at the next graph. Plateaued sales isn’t necessarily a bad thing, it means we’ve reached a point of balance.
This graph shows the year over year number of “affordable” homes sold in the tri-county area of southeastern NC.
What does this mean?
SHORT-TERM
It means right now demand for homes is strong and will probably stay strong throughout the summer.
The demand for buying a home is possibly higher now than ever before because of the lockdowns. Buyer demand was pent up in March and April but beginning to release in May and June. That’s why we see a huge spike from May to June, buyers couldn’t wait to get out there and find a home.
LONGER-TERM
This fall/winter we can expect to see the real estate market to start to contract.
The US and world economies are not expected to quickly recover from the damage caused by the coronavirus. Especially in the US where civil unrest is contributing to a growing sense of uncertainty. Expect an economic recession to hit around the end of the year. Odds are this recession will be deep and take years to recover from. We are entering uncharted waters so no one really knows for sure.
What does this mean for you?!
SHORT-TERM
Right now is still a great time to sell a home and an “alright” time to buy one. Sellers will still get a premium for their homes and buyers will be paying top dollar for a home. One positive for buyers is that mortgage rates are at historic lows right now.
LONGER-TERM
Buyers will soon have the advantage when buying homes. Prices will soon begin to level off then fall. This will be a good time for homeowners to buy a larger home at a discounted rate. It will also be a good time to buy investment/rental properties.
Ty Shaw
Realtor/Broker/Owner
SWELL home & living
If you have questions about this report or anything real estate related, please let us know!