Distressed housing inventory shrinks
October 11, 2013By J. Elias O'Neal
Finding a deal on a bank-owned foreclosure or short sale residence in the Wilmington region is getting tougher, according to area Realtors.
After coming off one of the best summers for home sales since the housing bubble burst in 2008, a number of distressed properties are quickly being snapped up – with some distressed residences staying on the market less than a month before finding a buyer, said R.J. Alex, president of the Wilmington Regional Association of Realtors and a Realtor with Wilmington-based Century 21 Sweyer & Associates.
In August, reports showed a 4 percent hike in the number of homes sold in the greater Wilmington area compared to August 2012, according to the latest figures available from the Wilmington Regional Association of Realtors (WRAR).
In all, 596 homes were sold in August throughout New Hanover, northern Brunswick and Pender counties – up from 573 homes sold in August 2012 but down from 638 homes sold in July.
The median price for a home – the midpoint in price for which all properties are sold during a given time period – was $183,750 in August, up 2 percent from $181,000 in August 2012 but down from $198,000 posted in July.
Year-to-date, 4,287 residences have been sold in the greater Wilmington market, according to WRAR’s records.
But it’s the volume – or the lack – of foreclosed and short sale homes that has Realtors optimistic about the health of the region’s housing recovery.
According to the WRAR Multiple Listing Service (MLS), there were 90 bank-owned foreclosed homes listed in August. That’s down 23 percent from 116 foreclosed homes on the MLS in August 2012.
“They move pretty quick, anywhere between 60 to 90 days, and some are moving much quicker,” Alex said. “They are priced to move because the banks don’t want them on their inventory. And with some banks, after every 30 days a home sits on the market, they are dropping the price anywhere from $5,000 to $10,000 depending on the price of the home.”
Michelle Clark, team leader of the Michelle Clark Team with Wilmington-based Intracoastal Realty, said she has also noticed the volume of distressed residences decline over the past months.
“There seems to be fewer short sales and foreclosures,” she said. “I’m certainly not seeing as many [as] in years past.”
Clark said many of the bank-owned foreclosed properties being purchased are priced at $300,000 and lower. She said while there are very few luxury properties in distress, the ones that are foreclosed or facing a short sale are beginning to move.
“There really is not one area that is seeing a concentration of foreclosed or short sale transactions,” Clark said. “It’s all over the area. Some are in nice communities and will sell and rent well such as in Pine Valley, Long Leaf Hills and downtown Wilmington historic district.”
Alex and Clark said many of the buyers are investors flush with cash and looking for deals – especially for rental properties, a housing trend that remains strong in greater Wilmington. Others are purchasing the homes to flip as their personal residence or renovating the structures to lease or to sell.
Clark said relieving the market of distressed properties would have a positive impact on housing values in the region.
“Once we get through these foreclosures, it’s only going to make the value in the neighborhood increase,” she said. “These opportunities are drying up because people are taking advantage of the pricing.”