Housing market in area stays strong amid crisis
Almost everyone in the U.S. has felt some aspect of the housing and credit crisis - but some have felt it a lot more than others. Homeowners around the Cape Fear region can count themselves lucky, though, because the Wilmington-area housing market has remained relatively strong as sales have plunged across the country and, along with them, prices in some places. Not so here. While median home prices dropped 1.4 percent nationally in 2007, they actually rose here by 3.6 percent, to $211,377, according to data from the Wilmington Regional Association of Realtors.North Carolina in general had the seventh highest appreciation in home prices among the states in the 12 months ended Sept. 30, according to the Office of Federal Housing Enterprise Oversight, a U.S. agency whose data is considered especially comprehensive and reliable.
Why would the Wilmington area fare so well even as places like Florida, Nevada and California find themselves in a housing tailspin? Many states where prices and sales have suffered the most were either highly speculative resort areas - such as Nevada - or states where the economies have taken a big hit, such as the manufacturing centers of Michigan and Ohio, said Susan Lacy, president of the Wilmington Realtors. “Wilmington is a regional area that offers medical services and shopping, the arts, the university. These are things that are hard to put out of business,” she said. “We have enough diversity in our job market that we should have a lot of economic stabillity in this area.”
Wilmington comes closer to mirroring the national picture in sales, which fell here by 17.6 percent in 2007 while they dropped 12.8 percent nationally. But both numbers follow the go-go days of 2005, and those sales were unsustainable, Lacy and other real estate agents say. While Wilmington-area sales are down 31 percent from 2005 levels, they are up 63.5 percent from 2001. Sales in 2007 were lower than in 2004, but higher than in 2003, Lacy pointed out.
“We’ve gone back to a normal market,” Lacy said, pointing out that average days on the market for homes here rose from 66 in 2006 to 95 days in 2007 - still just five days more than the typical listing agreement. Meanwhile, sellers in 2007 were still getting 97.35 percent, on average, of the list price of their homes, she said. That was down only slightly from 96.59 percent in 2006.
But, if your home is sitting and others are selling, it might have something to do with your price range. “Things are selling in a couple of different price ranges,” Lacy said. “The markets that are $400,000 and less have a quick turnaround,” she said. “The mid-market ($400,000 to $1 million) has a lot of inventory” because “there are not a lot of move-ups because of the media,” Lacy said, referring to news coverage of the real estate markets. “So, it’s a stronger buyers’ market in the $400,000 to $1 million range. “The upper luxury market is not as affected by day-to-day economic isues,” she added.
The Wilmington area figures include new construction homes (the national data do not), and because of rising costs to build and also escalating land prices, newly built homes can cost more than existing ones. “New construction can lift prices, but more typically with existing homes you’re looking at a different buyer profile,” Lacy said. “Typically you’re going to get more home with existing because it is usually at a lesser rate per square foot.”
Understanding the Southeastern North Carolina housing market - or most markets across the country - can be confusing because the data do not follow city or county lines, but rather the areas served by more than one multiple listing service, or MLS.
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