by Diane Moore Steelman, REALTOR, SRES August 2008 NATIONAL NEWS The Bottoming of Home Sales We are finally beginning to get some good news regarding the housing market. Let me give you some quotes from leading economists: "Our panel anticipates a bottoming out in housing this year." Source: National Association for Business Economic May 25, 2008 "The biggest part of the housing decline will be over by the end of the year." Source: Henry Paulson June 24, 2008 "We are at the beginning of the end of the downturn." Source: Mark Zandi, Moody's Economy June 26, 2008 "For the first time in nearly three years, housing unit sales are at the beginning stages of finding a floor and perhaps even heading up." Source: Steve Murray, RealTrends, July, 2008 "That makes four months now of about flat new home sales and, like the ten month stretch of relatively flat existing home sales, it's possible that sales volume has gone about as low as it's going to go." Source: Tim Iacono, Seeking Alpha See graph: A Bottom May be Forming in Home Sales. "The rate of decline in existing homes sales has slowed substantially from the dramatic fall from mid-2005 through mid-2007, with a decline of only 4.9% in the past nine months. We see this as evidence that the pace of home sales is very close to a bottom." The cover of Barron's on July 14, 2008 stated that Home Prices are About to Bottom. For remarks from the article, go to Bottoms Up. "If this rebound in homeownership rates continues to reverse the four-year downward trend, it could provide further evidence that we are finally experiencing a bottom to the housing market problems." Source: Mark J. Perry, Ph. D Graph of Homeownership Rates: US Homeownership Rates Home Prices Lawrence Kudlow states, "For example, the median existing home price has increased four consecutive months and is up 10% since February. Yes, it's down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, the median home price is $215,000 in June, compared to $196,000 last winter. The reality is a possible upturn in the housing trend, and at the very least we are getting a bottom." Source: Kudlow's Money Politics 7/24/08 Wall Street Strategies reported that these seven cities, out of the 20 in the Case-Shiller report, showed month to month price increases - Denver, Atlanta, Boston, Mineapolis, Charlotte, Portland, and Dallas. "This movement in some of the healthier areas of the country suggests that the buying interest is returning, and prices are back on an uptrend." Source: Wstreet.com 7/30/08 The subprime foreclosures will be followed by a wave of foreclosures from ARMs. This second round of foreclosures will further affect a price increase. For Buyers Purchasing real estate continues to be a good investment unless you live in Detroit. Click on the link to the graph to see how much appreciation has occurred since 2000, even with the recent decrease in pricing. See A Good Investment. Look at the Composite 10 and 20 and then compare it to the stock market in this table: Index % Change 2000-7/08 Dow 5 NASDAQ -41 S&P 500 - 8 Composite 10 86 Composite 20 72 If you are paying rent, now is the time to buy. With rents increasing and the mortgage rates low, the rent is now enough to cover the monthly mortgage on an equivalent home. See graph of Homes for Working Families. The prices are expected to decrease another 10%, however, the recent increase in mortgage rates will more than offset the price decrease. Thus, don't wait for more price declines, as your monthly payments will likely be higher than currently. For Sellers The Wall Street Journal recently offered suggestions for those who need to sell a house now. -Don't try to sit out the market. That's what hundreds of other timid sellers are doing, each of them hoping - somehow, some way - that hanging on the sidelines will improve prices, and, ultimately improve his or her chances for selling success. It won't. Not if you expect to sell any time soon. -Set a realistic, salable price on day one. Don't let the house hang around on the market as you gradually lower the price... if prices in your area are generally down 20% from where they were at the bubble peak in 2005, then price you house 25% to 30% below its peak bubble value. Source: WSJ 7/14/08 Though we are seeing a bottom for the decrease in sales, it will take longer for overall pricing to increase. The inventory must decrease significantly for the demand to cause an increase in prices. Ken Lewis, Chief Executive of Bank of America forecasts a further 15% decline in prices nationwide, lasting into the first quarter of 2009. Source: Los Angeles 7/10/08. Mark Zandi, Chief Economist, Moody's Corp. Economy doesn't expect a rebound in prices before the spring of 2010. WILMINGTON The second quarter average sales price has decreased 4.3% over year-end 2007 and 6.1% over second quarter 2007. Wilmington has experienced a decline of 26.7% in the number of homes sold in second quarter 2008 compared to second quarter 2007. Zip code 2nd quarter 2008 yr. end 2007 % change 28403 Avg selling price $248,657 $248,171 >.02% Avg. list price $268,507 $257,338 >4.3% Days on market 100 82 Median sold price $188,000 decreased 11.3% from 1st quarter 28405 Avg. selling price $270,606 $351,466 <23% Avg. list price $281,270 $366,588 <23.3% Days on market 110 102 Median sold price $180,000 decreased 3.2% from 1st quarter 28409 Avg. selling price $305,916 $325,071 <5.9% Avg. list price $318,970 $337,633 <5.5% Days on market 110 93 Median sold price $249,000 decreased 1.7% from 1st quarter 28411 Avg. selling price $377,202 $321,934 >17.2% Avg. list price $396,446 $331,342 >19.6% Days on market 107 91 Median sold price $245,000 decreased 4.5% from 1st quarter 28412 Avg. selling price $219,036 $234,517 <6.6% Avg. list price $226,529 $240,156 <5.7% Days on market 112 86 Median sold price $206,050 increased 17.7% from 1st quarter Source: Star-News Susan Lacy President, Wilmington Regional Association of Realtors 8/16/08 We are beginning to see our market stabilize. The number of homes sold in July was up 14.9% from June. We have an 11.8 month supply of single family homes, a decrease of 2.1 months from June. It will take some time for the inventory to decrease to the level that demand encourages price appreciation. A normal level would be 6 months in inventory. The last 3 months there has been a decline in the average sold price. We are fortunate in that many markets are seeing 20 & 30% declines in value. To see the month supply in inventory for New Hanover County by price range, please click here. Wilmington ranks No. 20 in a list of cities with the most home equity. Home equity as a percent of home value was 61% in Wilmington, or $117,470. Source: Forbes - data from Moody's Economy.com on the country's 200 largest metro areas Carolina & Kure Beach There is a 25.51 month supply of homes in Carolina and Kure Beaches. The average sales price is down 6.8% comparing the first 7 months of 2008 to the first 7 months of 2007. 
Source: Brian S. Wesbury, Chief Economist First Trust