We live in a world where our only constant is change and this particularly rings true concerning our local real estate market.
In the first quarter of 2021 appraisals below the contract sale price were a painful reminder that the market was rapidly changing. As we continued to have more cash buyers enter the market, prices were driven up and most cash buyers do not get an appraisal. We also encountered many buyers willing to pay the difference between the short appraisal and the contract price to get into the right house for their family. Once the market adjusted, appraisals became less problematic for buyers and sellers.
Our local Wilmington real estate market for 2021 was nothing less than remarkable. Some price points saw 20% appreciation where typically year over year appreciation is between 2-4%. Since our market cannot sustain double digit appreciation multiple years in a row, a slightly above average of 3-5% appreciation seems plausible for 2022.
So, the question at hand-what does 2022 hold for our local real estate market?
As supply chain issues continue to improve, we should see more new home inventory come on the market. This should help our current challenge of an extremely low inventory of homes to sell. A healthy market has 5-6 months of inventory available, we are currently well under a 2 month supply of inventory in most price points.
As Wilmington continues to attract out of state buyers due to our coastal lifestyle, mild climate and affordable cost of living we will see our population increase.
We are the most affordable city on the east coast compared to Charleston, SC and Savannah, GA.
In 2032-Wilmington could find itself more sought after than Charleston, SC due to our river walk with restaurants and shopping, our ever-improving downtown amenities and of course our proximity to local beaches.
TIPS FOR BUYERS AND SELLERS IN 2022
If you are seller, you will find yourself with multiple offers when you properly prepare your home for market with appropriate pricing and all deferred maintenance items taken care of, including lawn maintenance. Staging sells and that is still very important even in a hot market. Buyers love eye candy and expect it if they plan to pay top dollar.
For the buyers out there, being prepared is the wisest thing you can do to win a possible bidding war.
1. Try to go through underwriting with your lender and be approved for a loan, all that is left is to identify a house and have an appraisal completed.
2. If paying cash, have proof of funds ready to submit with an offer.
3. Be willing to drive until you qualify. If your budget is $300,000 and you need a four bedroom, 3 bath home, you may need to find something outside of Wilmington to meet your family’s budget.
4. Be willing to remodel. The turnkey homes attract multiple buyers due to the ease of “move in ready.” The ones that need updating typically do not fly off the shelf as quickly. The advantage is a more mature neighborhood, and you can live in a house while you slowly update it.
5. Inventory is out there; we get fresh inventory daily. The right one will show up!
6. Two deposits needed to make an offer- due diligence money and earnest money. Both come off purchase price when a buyer closes on the home.
7. Nonrefundable due diligence money is paid to seller to take the house off the market. During this time, a buyer performs all inspections, appraisals, etc.
8. Earnest Money is held by the listing firm or closing attorney and held in a trust account until closing.
9. Due diligence money is nonrefundable and earnest money is refundable up to 5 pm of the due diligence date.
10. In this changing market, trust your local professionals to help navigate the changing tides of our real estate market.
Audrey Elsberry - Sep 22, 2023
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