In September, the National Association of Realtors announced a welcome increase in sales of existing homes across the U.S., a 3 percent rebound after a two-month slump.
The existing home market in much of the Cape Fear region appears to be faring better than that, according to numbers from the N.C. Regional MLS.
The number of existing homes sold in New Hanover, Pender, Brunswick and Onslow counties is up 12 percent from this time last year, while the closed volume has increased by 14 percent, said Tim Milam, president of Coldwell Banker Sea Coast Advantage.
“Basically, homes that are priced fairly under $400,000 are pretty active in the market and moving rather quickly if priced properly,” Milam said.
He said that as a general rule, about 80 percent of all sales in New Hanover County for the past few years have been in that below-$400,000 category.
In Brunswick County some numbers for existing home sales are flat this year, with the average sales price only up about 1 percent – from $240,000 to $242,000 – after a banner 2015.
“I think at some point, the market had to cool somewhat,” said Jim Goodman, president of the Brunswick County Association of Realtors and a Realtor with Margaret Rudd & Associates Inc. “It was up in the 4 percent range, and it’s just not going to sustain itself at that level.”
Many of the builders working on homes in Brunswick County are creating dwellings in the $200,000- $300,000 price range and above, which is the range buyers have been demanding, Goodman said.
If people have an opportunity to buy a new home, “they’re going to buy a new home [rather than an older home] as long as it’s available in an area they’re interested in purchasing in,” Goodman said.
As a result, some sellers of older homes opt to lower prices as a way to compete with newer products.
“I would think that if there’s a choice between new construction and an existing home, the new home may win out, but it’s got to be in the right location and the right price, depending on the customers and the buyers needs of course,” said Don Harris, president of the Wilmington Regional Association of Realtors and a broker with the Keith Beatty Team of Intracoastal Realty Corp.
The ongoing lack of inventory for lower-priced and new homes can work in a seller’s favor.
“Is there competition? Yes, there is, but if you think about it, there’s not a ton of homes being built under $300,000. It’s a whole different market in many ways,” Milam said.
Realtors said interest rates might go up but are expected to remain at historic lows.
“Interest rates are still below 4 percent, and it doesn’t matter what somebody wants to sell for, if people can’t or won’t take advantage of these historically low interest rates, they’re missing a good opportunity to buy at a good value,” Harris said.
Nationwide, recent existing-home sales boosts after a short period of decline were propelled by first-time homebuyers reaching a 34 percent share, a high not seen in more than four years.
“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” said Lawrence Yun, the National Association of Realtors’ chief economist. “Most families and move-up buyers look to close before the new school year starts.”
Existing home sales in the Northeast also picked up. Traditionally the Wilmington area has benefited when activity is brisk in that part of the country and sellers there relocate to become buyers here.
September existing-home sales in the Northeast leapt 5.7 percent, according to the NAR. The median price in the Northeast was $261,600, 2.1 percent above September 2015, the NAR reported.
The South region’s number of existing home sales was nearly flat, but the median price rose 6.6. percent.
In the Wilmington-area market, Realtors say they think the housing market will stay healthy.
“I expect prices to go up at least 2 or 3 percent, if not 4 over the next couple of years,” Milam said, “because the supply is not there but yet the demand is there.”
