2022 Wilmington Housing forecast and Update
I recently attended the 2022 Annual Housing and Construction forecast breakfast hosted by the Cape Fear Realtor association and the Cape Fear Home Builders Association.
Here are a few of my takeaways from this great event:
The Russian war in Ukraine is bad for the global economy
The rising oil prices are bad for the economy. In fact, historically rising oil prices can lead to a recession.
Inflation is currently at 7.9%, which is a 40 year high. Rising inflation is also bad for the economy
Rising interest rates are bad for the economy. Historically when the FED raises interest rates to battle inflation, this can lead to a recession. Predictions are now calling for five 25 basis points raises over the next year.
Now for some good news.
Wilmington is one of the few markets in the country that has more jobs now than we did before Covid-19 crisis.
The local job market in Wilmington has also seen a maturation of jobs if you will. What I mean by that is in the local labor market, the jobs have changed from the service industry jobs to higher paying jobs.
Also, historically Real Estate is a very good hedge against rising inflation. As potential home buyers continue to get priced out of homes because of rising interest rates and rising home prices, rents will continue to rise. The rising rents in turn will help stabilize the Real Estate market.
In summary, the recession risk for 2023 and 2024 remains high. However, especially locally here in Wilmington, because of the rising job rates and more higher paying jobs, the Real Estate market is on solid footing. This market is also very different from the 2008 market in that there aren’t any subprime mortgages out there. In fact, personally speaking, I’ve seen more cash purchases and large cash down payments than I have ever seen!
Let’s get to some local Real Estate Stats:
According to the North Carolina Regional MLS, the Wilmington area median sale price rose 14% in 2021 to $325,000. This growth also represents back to back years of double digit increase.
The Wilmington area days on the market continue to drop, reinforcing the demand for housing! The median DOM for New Hanover dropped to 5 days, which represents a one year decline of 64.5%!
One of the critical measures that I track closely is the months of supply or absorption rate. The absorption rate is expressed in terms of months and represents how many months it would take for all the residential properties currently listed on the market to sell at the average rate of sales per month over the past 12 months period.
Markets are categories as a Seller’s market, Buyer’s market or balanced market. A balanced market is considered 3-6 months of supply. A Buyer’s market would be when absorption rates are greater than 6 months and a Seller’s market would be when absorption rates are less than 3 months.
Currently in New Hanover county there is less than 1 month of inventory! This represents a very strong seller’s market!
With that being said, we need more homes to sell. If you or anyone you know is even considering selling and taking advantage of this strong seller’s marjet, please give me a call or shoot me a text. In fact. I may be able to sell your home for top dollar without it ever hitting the market and even negotiate a seller lease back!!