Today’s Housing Market…In short order!

Banked Owned homes have increased in Wake County from last year!

Banked Owned homes have increased in Wake County from last year!

Today’s housing market is improving, but challenging at the same time. There are more positive metrics than negative ones for the period ending July 2014, but those that are alarming can be imposing to overcome. The positives include the days on market and the odds of selling your home, but the challenges come with the number of foreclosures in the market, both on the market and those homes in pre-foreclosure action.

The good news, despite showings being down a bit over the summer, sales increased over July of 2013. Closed sales were up in July by 2% over the same period a year ago and up 3% year-to-date, while again being up slightly from the previous month (2%). These are positive trends, though it shows a slow improvement in the housing market, not a full-scale rebound.

The total inventory was up 2% with new construction accounting for a 20% increase and re-sale dropping by 2%. For July, new listings entered into the Multiple Listing Service (MLS) rose by 5% with 38% having experienced at least one price decrease during the listing period. Additionally, 50% of all listings have been on the market for at least 58 days. With all of that said, it is still an improvement for our market. Though the percentage of listings with a price reduction was up slightly in July, the average days of market of 58 days is well below the 130 average days on market from July 2011.

Stacey P. Afindsen of the Triangle Area Residential Reality (TARR) reports that he believes “the majority of price dropping is coming from upper end price brackets or those sellers with residences that are not in move in condition.” He goes on to say that he believes the lure of new or updated homes are luring buyers out of their preferred geographical locations, which is adding a new layer of competition for many sellers.

The average sales price for the overall market and re-sale market rose by 6%, which is a positive that the re-sale market is keeping pace with new construction. The supply of housing demand is still squarely in favor of the seller with the majority of price points having less than a 6 month supply with some at less than a month’s supply. The sectors that are above the 6 month supply tend to be the higher-end homes which is always the case. The more expensive the home, the fewer buyers that are available and the longer it takes to sell it.

What are the odds of selling your home? Obviously there are many differing factors that may impact your specific home (price, location, condition, etc.), but as a general rule in Wake county, it stands at 36% for July. This number is down slightly from the previous months and down from 37% in July 2013.  Despite the minor drop in this number, the odds are still strong that you will sell your home.

Now for the negative…foreclosures. I don’t always bring up foreclosures since in theory, a foreclosure does not affect the value of your home, but in reality, it can have an impact if a large percentage of homes in your neighborhood are foreclosures or distressed homes. RealtyTrac, a company who specializes in tracking foreclosure throughout the nation, reports that Wake County has a larger percentage of foreclosures than the entire state of North Carolina and the nation as a whole. Furthermore, it reports that the pre-foreclosure notices for Wake had increased over the previous months and July had the highest number over the last twelve months.

Where bank-owned properties are down for the month, the number of pre-foreclosures is up. How will this impact the market over the next six months? It is anyone’s guess, but it largely depends on how much of this inventory is released by the banks for sale. If a large number are released into the market, it can negatively impact the housing values. However, if they release them slowly, the impact will be lessened..which is what I expect to happen.

In closing, the housing market is good, but not as good as it could be. It is improving, but not as fast as it did last year. For my community, the new construction has brought greater traffic to the community so our few re-sales have sold quickly…much more so than in the past several years. Ultimately, real estate is local and that means that your community may be better or worse than the county as a whole…it requires a more in-depth analysis to make the best determination as to whether it is a good or a bad time to sell your home.

For specific information about your community, please contact me and I will be happy to assist you.

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