It’s typical for home sales at the beginning of the year to look drastically different from those in the final months of the prior year. Frequently, buyers and sellers aim to complete the real estate process prior to December 31st in order to apply the financial benefits to their upcoming taxes. So, it’s not uncommon to see a big dip come the new year.
Existing Home Sales
In January 2020, national existing-home sales decreased 1.3% from December. However, existing-home sales were up 9.6% from January 2019. Our local real estate market (New Hanover, Brunswick, and Pender County) saw a 18.29% decrease from December but produced a 36.8% increase from January 2019.
Newly-Constructed Home Sales
While sales of existing homes saw a decrease, sales of newly-constructed homes rose 7.9% from December. The Midwest and West were the two regions that led in new construction home sales while the South saw a 4.4% decrease. Nationwide sales hovered 18.6% higher than January 2019 and each region saw a significant increase from year-to-year, except for the South, which had a 2.4% decrease.
While the Wilmington area is located in the South, our coastal real estate market is affected by unique conditions. Locally, we saw a 27.9% decrease from December to January for newly-constructed homes sold. However, a year-end push for closings is not an uncommon financial move for development companies and private buyers. We actually had a 34.7% increase in sales of newly-constructed homes from January 2019.
The growth in new home sales is in large part due to a tight home inventory. At the end of January, there was a 3.1-month supply of homes on the market nationwide, a .7 drop from the previous year. According to the National Association of REALTORS® (NAR), this is the lowest the home inventory has been since 1999.
Low inventory is also pushing up home prices. The national median sales price in January was $266, 300, up 6.8% from the previous year. Locally, the median sales price in January was $252,397. This is down slightly (4%) from December and up 4% from January 2019, which is relatively steady. Interest rates remain at record lows and the job market remains favorable, so home affordability has not yet been affected by any increases. While there was talk about a recession last year, economists continue to push back their predictions on when this will arrive.
As others have noted, we are seeing an increase in buyer activity earlier in the year. In February, there was activity in showings and contracts that usually appears March and April. However, these buyers are oftentimes not finding what they need. As we head into spring, the home inventory usually has a significant influx of properties, which should alleviate this issue. The NAR is already reporting an increase in residential permits, which is often a precursor for the rise of newly-constructed home sales.
If you’re thinking about buying or selling your Wilmington area home, give us a call at (910) 202-2546 or send us a message. We’d love to discuss your options and if now is the best time for you to make your move.
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