As greater Wilmington continues to pull itself out of the housing slump, steady improvements saw slight softening at the beginning of the year. But area Realtors, who blame some of the slowing on the usually frigid winter, say they expect home sale activity to be on the uptick soon.

“The summer months are typically when homes sales increase,” said Michelle Clark, a Realtor and team leader of Wilmington-based Michelle Clark Team of Intracoastal Realty. “The winter did have an effect on sales, but I think, when you look at the number of contracts being written now, May and the rest of the summer are going to change that trend.”

After steady increases in 2013, things began to slow starting in January, when 336 home sales were recorded, according to a data from the Wilmington Regional Association of Realtors (WRAR). That was down from 354 homes sold in January 2013, or a 5.1 percent drop off for New Hanover, northern Brunswick and Pender counties – the region WRAR tracks.

Though the start of this year has shown steady month-over-month home sale increases, the activity still remains lower than the same time last year.

The number in February – 418 homes sold – was down slightly from the 420 homes sold in February 2013, according to WRAR data. Area Realtors inked 495 homes sales in March – the same total recorded in March 2013.

In April, 522 homes were sold, down from 553 homes in April 2013.

So far in 2014, the number of sales was 2.8 percent lower than in the first four months of 2013.
Tim Milam, president of Wilmington-based Coldwell Banker Sea Coast Advantage, said much of the year’s early decline in homes sales boils down to the lack of new and existing inventory.

“The tightest shortage of homes we’re seeing in the market is in New Hanover County,” Milam said. “There is a good amount of tightening in Pender County and a fair amount in Brunswick County.”
On top of this winter’s low temperatures, another factor contributing to slightly lower home sales was the lack of distressed properties that once flooded the market prior to the economic recovery, Milam said.

“Many of the short sale and foreclosure homes that we had on the market are gone,” Milam said of the area’s housing inventory. “And what we do have on the ground is currently not meeting the demand we are seeing out there.”

Area Realtors say much of the region is approaching a four-to-five month supply of housing in the region.

That supply gets even tighter for home prices between $150,000 and $250,000, where supplies are within the one-to-two month range, especially in New Hanover County.

Milam said another factor contributing to fewer distressed home sales on the market is better mortgage underwriters, adding that long gone are the days when people could apply for multiple home loans that exceeded their actual income.

“What’s happening is the lending standards have gotten better,” Milam said. “That means there are less foreclosures than what’s been out there in the past. We’re not seeing many distressed home sales as a result.”

And Milam said area pricing is finally beginning to catch up as new sellers enter the market and homebuilders begin to ramp up construction.

“Value is increasing year-over-year,” he said. “I believe you’re going to see a good 3-5 percent increase on [existing] home values because we do not have a lot foreclosures on the market like in years past.”

While home sales were slightly down in April compared to a year earlier, the median and average sale prices for a home increased.

The median price for a home – the midpoint in price for which all properties are sold during a given time period – was $197,525 in April, up from $177,900 in April 2013, according to WRAR figures.
The average price of a home sold in April also increased 3.4 percent from $226,490 in April 2013 compared to $234,118 last month.

Clark said another good indication of future home sales is the number of written contracts for new and existing homes.

“There seems to be a bit of urgency,” Clark said. “People that have been waiting for whatever reason are either ready to purchase or sell because they feel as if they could be missing out given the fact that interest rates are rising and consumer confidence is rising.”

Milam agreed, adding that the number of contracts written at his firm has increased 20 percent over this time last year.

“The last 60 days have been really good on contracts written,” he said. “We started seeing things improve in March and April, and it got even better in May. That is a very strong sign that June, July and rest of the summer months are going to be very good.”