Inventory Update

Forbes last week reported “troubling trends” in the national housing market. The national inventory rose 5.0% at the end of May, to 4.43 million, which puts the US total inventory level at 8.9 months.

Locally, the inventory level for Wilmington (New Hanover County excluding the beaches) rose 8.0% in the last 30 days, to 2651 listings, putting the inventory level at 8.3 months. Inventory including the beaches is 10.4 months.

Home sales have weakened in part thanks to ongoing problems with subprime mortgages, according to Forbes. These mortgages, which are made for buyers with lower credit scores, have begun defaulting increasingly higher rates over the several year. Because of this, lenders have tightened mortgage requirements, which cuts off the cash needed to buy homes for large chunks of the population.

In Wilmington, we’ve noticed a slow in sales due to relocating buyers who are coming from markets softer than ours. Often we hear “I love that house and want to buy but need to wait for my home in Long Island/Ohio/Florida/etc to sell.”

And then of course there’s the 2nd home buyers. While these buyers don’t have the challenge of selling a home, they are not under a time constraint and thus are less motivated.

In short, there’s a lot of inventory out there. If you need to sell, it’s imperative to price your home UNDER market value. If you need to buy, I’m sure that last sentence made you smile.