NATIONAL NEWS

Turning of the market for inventory
The majority of economists feel that the biggest part of the decline in housing sales is over or near the end.  The National Association of Realtors reports that the sales of previously owned houses rose 2% in May.  Out of 24 metropolitan areas tracked, 14 areas experienced a decrease in the number of homes listed for sale at the end of May compared to a month earlier.  (Wall Street Journal 6/5/08)

Homes are more affordable
With the national median price of a single family home at $204,229, mortgage rates around six percent and the average household earning nearly $50,000, the average home buyer spent about 23% of their income on housing during the first quarter of 2008.  The percent of income spent on housing was up to 37% during the real estate boom.

In the tracking of 24 metropolitan areas, the percent of homes whose prices had been reduced ranged from 28.3-48.6%.  (WSJ 6/5/08)  Declining home prices across the nation are bringing valuations ? the difference between what a home should cost and its actual price ? back to pre-bubble levels.  (CNN Money.com 6/2/008)  The combination of decreased pricing and low mortgage rates are allowing renters to carry mortgage payments and taxes on a new house for what they're paying a landlord. (Fortune Magazine.com 6/25/08)

Pricing stability
The inventory level is decreasing as we see pricing declines.  However, how long will it take until we see overall price increases?  Economists vary on their forecasts of the percent of price declines and the stabilization of pricing.  The National Association of Realtors feel that the median home price is likely to decline 8.4% in the first half of 2008 and stabilize in the second half.  (NAR 6/9/08)  Mark Zandi, chief economist at Moody's Economy.com feels that home prices have fallen about 15% and will drop another 10% before reaching a trough in the spring of 2009.  (Reuters News 6/26/08)  Peter Acciavatti, credit analyst and managing director at JP Morgan Securities feels that home prices may fall 25-30% from their peak in 2006 and not hit bottom until 2010.  (Reuters 6/11/08)  The opinion of Paul Puryear, a real estate analyst at Raymond James & Associates feels that it will take two to three years for the inventory level to get low enough to give sellers some pricing power.  (New York Times 5/25/08)

The foreclosure market is adversely affecting the pricing.  The number of bank REOs (real estate owned properties) has increased from 493,000 in January, 2008, to 660,000 in April, 2008.  (WSJ 6/2/08)  These lenders are slashing prices dramatically to rid themselves of an unprecedented number of foreclosed properties.  (Associated Press 6/12/08)  This creates a drag on current home prices.

The foreclosure situation is expected to stay for awhile as the Option ARM (adjustable rate mortgages) is resetting and expected to peak in 2010.  For answers to questions about alternatives to foreclosure and finding the right programs to help you save your home, or sell it, go to www.homesafepmi.com.

Mortgages
Banks' lending standards increased dramatically in June, making it more difficult to get a loan.  (Click here for the Federal Reserve Banks' Lending Standards)

The number of FHA loan issues rose 126% in the first quarter of 2008, compared with the same time period a year ago.  (Washington Post 6/1/008)  FHA has down-payment assistance from nonprofit providers.  North Carolina receives this assistance on 22.4-30% of its FHA-insured loans.  (Click here for the Wall Street Journal's Down Payment Assistance information)

For those of you with higher priced homes, rates on jumbo-conforming loans are currently 6.59% compared to non-conforming jumbos which are averaging 7.4%  (WSJ 6/19/08)  At J.P. Morgan Chase & Co., the volume of jumbo-conforming applications has doubled since prices began to fall in early May.  (WSJ 6/19/08)

WILMINGTON

We have 5,996 single family homes for sale, about 96 units short of what we had in July, 2007.  The average list price is $423,329, down by 1% from last month.

The number of homes sold in June is down 12.8% from May and the number of sold units year over year is down 24.9%.

The average sold price is down 4.8% from May, 2008, and down 4.8% from June 2007.  However, the median sold price is $212,850 for June, a 3.8% increase over May.
 
There is a 13.9 month supply of single family homes, found by dividing the number of homes sold in June, 430, by the inventory of 5,996.  This is an increase of 1.7 months from May.

Homes have been selling at 94.2% of the list price with 24.7% of homes sold having a sales concession.

The average days-on-market for June was 122, 10 days longer than May.

Thus, we are down in sold units, but maintaining our average sales price.  The listing inventory has about peaked and the average list price has remained stable.  The pending contracts have decreased, so July's sold numbers will be lower than June.  It continues to be a buyer's market.

CAROLINA & KURE BEACH

There are 698 single family homes for sale, a 16 unit decrease over June.  There is a 23.26 month supply of homes.  This is the second month that the supply of homes has remained the same.

The average sold price for June was $415,720, a 12% increase over June, 2007.  However, looking at the first 6 months of 2007 and the first 6 months of 2008, the average sales price is down 5.7%.

Source:  June 2008 MLS Results, obtained on 7/11/08