Market Watch Report 2nd QTR 2019

Single Family Homes

The inventory of homes at the end of the 2nd quarter for 2019 is 521 single family listings available.  This is a decrease of 19.5% of inventory from the 2nd quarter in 2018 when there were 647 listings.

The Median Sales Price at the end of the 2nd quarter of 2019 for single-family homes is $168,490.  This is 4.44% higher than the median sales price of $161,450 at the end of the 2nd quarter in 2018.

Months inventory for single-family homes at the end of the 2nd quarter of 2019 is 3.4 months.  This is down 19% when the inventory was 4.2 months at the same time last year.

Townhomes

The inventory of townhomes at the end of the 2nd quarter of 2019 is 27 properties.  This is a 35.7% decrease of inventory from the end of the 2nd quarter of 2018 when there were 42 listings available.

Median Sales Price for townhomes at the end of the 2nd quarter of 2019 is $173,771.  This is a 1% increase from the Median Sales Price for the 2nd quarter of  2018 when it was $172,000.

Months inventory for townhomes at the end of the 2nd quarter is 1.9 months.  This is down 24% when the month supply was 2.5 months in 2018.

The key to economic activity is the principle of supply and demand.  Supply and demand influence each other and impact the price of a product.  In real estate, the inventory of homes is the supply.  The demand is the number of homebuyers in the market actively looking to purchase a home.

If inventory (supply) decreases, housing prices will continue to increase.  This shortage of inventory (supply of homes) can cause multiple offer situations with buyers bidding up the price.

Most experts agree that a balanced real estate market occurs when there is a 4 to 6 months supply of listings available for sale.  When the inventory (supply) is less than 4 months, it means we are in a seller’s market.  When there is an abundance of inventory (supply) over 7 months supply of homes, home prices drop to entice buyers to make an offer.

Below is a chart showing the past 10 years of inventory in Davidson, Forsyth and the entire Triad MLS system.  The chart is interactive.  You can take your mouse and scroll across the timeline.  You will see that 10 years ago there were 1,363 listings for sale in Davidson County, 3,807 homes for sale in Forsyth County, and 14,239 homes for sale in the 11 county Triad MLS system.

Today there are 566 homes for sale in Davidson County, 1,218 for sale in Forsyth County and 5,323 for sale in the entire Triad MLS.  Our inventory levels in Davidson County started to decline a significant amount in 2015.  In Davidson County, our normal inventory levels ranged from 1100 to 1,300 listings.

Because of the business-friendly environment in the state, companies are relocating here and other businesses already here are expanding. These economic conditions lend themselves to a high demand in the housing market.

People are moving into North Carolina for job opportunities, and residents are leaving high property tax states to have more house for their money and less of a drain on their retirement income from cost of living expenses and property taxes. Between 1990 and 2010, North Carolina gained two million new residents.

There were 487 single-family homes closed at the end of the 2nd quarter of 2019 in Davidson County. The average sale price was $204,904. Of those closed listings in this quarter, 285 homes were under contract in 30 days or less. Townhome properties had 35 closings at the end of the 2nd quarter of 2019. The average sale price was $197,183. Of those closed townhomes, 20 were under contract in 30 days or less.

Of the 487 closed single-family homes at the end of the 2nd QTR of 2019, the price range from 100K to 200K had the most sales at 213 listings. The second highest closed price range was from 200K to 299K with 93 closed properties.

• The Domestic gross product in the 1 st quarter of 2019 increased by 3.1%, outpacing the average of 2.3% for the past decade.
• The US economy added 21 million new jobs during the last decade pushing the national unemployment rate down to 3.7%
• Over the past decade, the US population grew at a rate of 8.0%.
• Demand for housing remains strong because 60% of the population is under the age of 60.
• The lower mortgage rates in 2019 were an unexpected plus for potential home buyers.
• The median home price at the end of June 2019 was $277,700. [Source National Association of Realtors]

• Mortgage Interest Rate lock – Homeowners might have a lower rate on their present mortgage loan then they could get on a new purchase. Interest rates are still low, so I don’t think this is a major factor unless rates start to rise.
• Potential sellers have not been able to find what they are looking for in a move-up property or smaller home, so they have decided to stay in their present home.
• Heathy longevity – Boomers and the older generation are living longer, and are enjoying a more active lifestyle.  These potential sellers are choosing to stay put in the homes they presently own.
• Economic Uncertainty. How long will the economy continue to grow before it slows down and makes an adjustment?
• The year preceding a national election causes uncertainty as to who will be in the white house and how that will affect economic policies and the housing market.

• It will continue to be challenging for homebuyers in 2019 with the inventory shortage. Buyers will need to be ready to make a fast decision when new listings come on the market.
• First-time homebuyers need to continue to save money for their down payment and closing costs.
• During this tight market, potential homebuyers have an opportunity to pay off some of their debt obligations. A factor the bank considers in the loan process is how much monthly debt the buyer has. By paying off small debt obligations, the buyer’s debt to income ratio improves.
• Sellers in the higher price ranges might see the market slowing a little. But a home priced correctly and in good shape will still sell.
• Demand for homes in North Carolina will continue to be high because of the good economic factors and job creation within the state.