Wilmington Area Real Estate Market and Trends Report...

22-25% Chance of SELLING home on area beaches! BUYERS are stealing beautiful homes all across the Wilmington area despite population BOOM! 40% of homes selling in Wilmington …

"The difference between death and taxes is death doesn't get worse every time Congress meets." --Will Rogers

Huge things are happening all over the Wilmington area. Perhaps the most interesting are the thousands of jobs being produced in the near future. Another huge facility is coming to the area. Having almost 1 million square feet, a proposed state of the art distribution center will be quite a site just 5 minutes outside of Wilmington . The developer is in the process of engineering the infrastructure now. The construction of this building alone will create an economic engine for the area. Once finished, the various tenants would undoubtedly provide hundreds, or thousands of jobs. In addition, it would bring high income relocations, tax benefits, and the main use, massive state shipping port additions to the area.

Also, FORBES released it's top 100 metro areas for business and careers, and the results were point blank startling. First of all, this laid back beach town is competing with the biggest cities in America for career opportunities? 5 NC cities in the top 50!! More than any other state in America . Wilmington was #38, and Raleigh was #1. That's fine by me, we have the beach. That also means that thousands of affluent buyers from Charlotte & Raleigh will want nothing more than a vacation home that's just 2 hours away. Despite an economic slowdown elsewhere, multiple national hotel chains are working on projects downtown, and on the beaches. Our tourist industry is also booming! As a native of Wilmington , one thing I have witnessed is how our tourist driven economic machine has always been buffered from the rest of the country's problems. Year after year, it has never really faltered. The more the corporate job market continues to grow, that will change, but you can bank on it for some time still. Unemployment in this area is still lower than the national average as well. I can literally go on for hours about the opportunities in the Wilmington area right now (ask my wife and friends), but I will save that for another time. With so much growth, it's obvious that the Wilmington area housing market will make an astounding recovery. I'm not only telling my clients this, I am also living it. Jenna and I are in the process of finding a new home. We will rent our current home, waiting for the return of a seller's market, then sell it. We are also going to use this year as an opportunity to buy a beach house. With the right plan, we believe we will be able to cover all of the expenses on both properties, with rental income, and tax savings. This also brings me to my next point, what's the #1 sign that our market is doing well? It's still easy to get property loans. Despite the media's portrayal of a locked down credit market, my client's have had no problems.

Buyers:

In light of so much negative publicity, I understand how it may be tough to make that decision to jump in, but let me pose a question. In these shaky economic times, what else are you doing with your money? Savings and bonds rates have been nearly wiped out by the Fed's recent rate cuts, and will continue to go down. Commercial real estate which historically follows residential, is now on the same track housing was. Commodities, precious metals, etc are demonstrating all the obvious signs of a bubble about to burst. Even blue chip stocks with low returns cause palpitations once a week these days. Even in the technology age, 2008 has shown little tech innovation. Bottom line, we are in a type of recession. It's scary to have cash in hand considering the fed prints more every day. The value of money right now is in serious jeopardy. The fundamentals of real estate however never change. When the population is booming, the job market is strong, and the supply of homes is well regulated, the path is clear. Despite all that, sellers are terrified. Many of them bit off much more than they can chew, and amazing deals are being forged. Donald Trump said, “This is the market where fortunes are made.” Also, with such a massive stimulus package meant for the hardest hit markets, wouldn't it make sense that this will create a boom in the markets that are still doing okay? You may be in a position where you want to buy, but have to sell your home first. No problem, consider this.

Sellers:

As I stated, selling in Wilmington right now is completely different than selling in other parts of the country. First of all, many parts of the nation have just begun to see tough times. In places lacking the fundamentals of strong jobs ( Ohio ), or supply regulation ( Miami ), expect to see major losses now, and for some time. If you get serious about your price and sell now, you may avoid a massive long term catastrophe. If your competition is at 200K, drop your price to 190K, then quickly to 185K if need be. In a declining market, it's going to happen eventually anyways right? Furthermore, when reduced to paper, it's usually clear that your expenses will wipe out gains from a higher price, considering your home will take longer to sell, and may be depreciating astonishingly fast. I see it all the time, one distressed seller can drop the value of an entire community 5% over night. While it may be a bad time for you to sell, it's also a bad time to sell in Wilmington . The difference, it won't be for much longer at all. You can typically find an equally good deal here, to what the buyer found in your home.

If you are selling in Wilmington , my advice is somewhat different unless you HAVE to sell, then that advice is even more important. As much as I think it is the time to buy, the inverse is true for selling. When considering selling, it's important to keep your emotions to a minimium. A good broker is the best way to do this.

With so much negative media, fear has become a driving force for many sellers. However, it's important that you not confuse risk with fear. By risk I am referring to your tolerance for further depreciation. Considering that anything is possible, if further depreciation is going to put you at great risk of foreclosure, or harming yourself, then that would warrant selling. However, if you are just afraid that you will lose money you don't absolutely have to have, you already did. Batten down the hatches, find a great renter for vacant homes, and thank me in the future by listing your home with me. What other broker would tell you that?

Now for the numbers.
Beach Property:

Carolina and Kure Beaches are still quite the buyer's market, although we are quickly working through the active inventory of homes. Down from nearly 1000 active properties just a few months ago, buyer's currently have about 700 homes to choose from. Also, in March of 2007, the average sold price of a 3 BR home was 369K, in March 08, a healthy 453K. Driven by larger high end properties, home prices still fell from this time last year though. Lower priced homes are selling better than more expensive homes. The average days on market also dropped from 205 in 07 to 120 last month. Wrightsville Beach is experiencing a different situation. Apparently the market in WB was the last to cool off in our area. Therefore they appear to be experiencing the absolute bottom. Only 6 properties sold in March of 08, opposed to 96 one year ago. The days on market also went up from 143 in 07, to 179 this year. I would expect to see a faster recovery here though, because there was less investor speculation on WB.

In the last 6 months on Carolina Beach , 22% of MLS listings actually sold. Kure Beach has seen 24% of it's listings sell, and Wrightsville Beach has sold 25% of it's listings in the last 6 months. That may sound bad to sellers, but consider that only a year ago those numbers were barely double digits.

Wilmington Property:

So far this spring has not been something to write home about. The inventory seems to be slipping, but the number of units sold is as well. We sold 136 units in March 08, compared to 294 in 07. The average days on market has risen just 9 days, and the average price dropped 30K from 07. Not the best numbers considering that it's the spring market. Seller's who aren't serious now, will probably be holding their homes for another year. This doesn't mean now is not the time to buy. Like the JP Morgan purchase of Bear Stearns, the deal is much more important than the timing. If you find the right home, there may never be a better time to buy.

Wilmington NC Population by Year Change Rate

2000 75,838 N/A

2001 90,084 18.78%

2002 90,620 0.60%

2003 91,419 0.88%

2004 93,371 2.14%

2005 95,476 2.25%

Vs. State Change Rate

What's going on in my business...

Even though the market is still recovering at the moment, I have managed to stay busy working with buyers and sellers. Although my “pay per hour worked” has gone down quite a bit, (working more for less money) I can't complain. Considering that only 50% of the brokers in our MLS region sold even one listing last year, I am proud to have sold well over 1 million dollars in 2007. While it's nice to achieve a figure like that, I am well aware that production is a minor piece of the puzzle. Many brokers hire tons of assistants, pay for massive lead campaigns, then sell homes via quantity of leads rather than with quality of service. More importantly, I maintained my 100% customer satisfaction goal in 2007. I was able to do this by giving exclusive, personal attention to my clients. I like to think of myself as an investment advisor, rather than someone a client calls every 5 years or so. I love to discuss real estate strategy, often for my client's homes in other parts of the country.

       Last year was really a huge year for me. I added several new features to help market my listings that are truly revolutionary, and have earned a huge response from buyers. As of now, I am the only broker in the area providing a virtual tour complete with a video walk through that makes you feel like you are in the home, a Google Earth flyover that feels like an aerial tour of the community, and 3D floor plans for certain listings. I also take my photographs very seriously, and have recently began experimenting with HDR photography which is meant to capture tones and levels a typical camera cannot.

       2007 also brought one other major addition to my business. By chance, I began managing a few long term rentals for clients who wanted to wait for a better time to sell, and without much effort my rental business took off. I am currently managing quite a few rental properties, and have grown to really enjoy this aspect of the industry. Despite hearing horror stories from my colleagues about rentals, my policies, marketing, and virtual showings, supply me with a steady stream of excellent tenants, with excellent credit and references. The procedures that I learned from Caroline while managing vacation rentals, have served me well in my new ventures. If you know of anyone who may benefit from an excellent property manager, please keep me in mind.
       Perhaps equally important, is the fact that I have carved out a niche in the Wilmignton area real estate market. Considering that so many of my clients are from out of town, I have taken technology and convenience to the next level. Many people are amazed to hear that I have listed, and sold homes having never met the homeowner. Even in this slow market, I have also managed to sell homes using just my revolutionary virtual showing. Whether it's presenting my listings in a way that makes buyers/renters have to see more, or giving buyers an aerial tour of nearby schools, parks, and beaches, my clients enjoy knowing that their investment is being well managed from every angle. My clients are typically looking for a broker who can keep them up to date on what's going on in a clear, convenient manor. Many of my clients love the fact that I have compiled many of my services into short easy to follow videos, that have made the traditional listing presentation obsolete. I will soon be moving to a paperless office in which all important documents will be hosted online where my clients will be able to login and view / print them at any time. My understanding of repairs, construction, rentals, sales, and just as importantly technology, is invaluable in this type of market. In this information age in which drastic changes are being forged in every industry, I found in 2007 that one of the most valuable things I can do for my clients is research. My flexibility to change is the number one way I have stayed ahead of my colleagues. The world has changed more in the last 10 years than in the 100 before that. Therefore, I constantly research what techniques are selling homes today. Considering that the internet is still very young, breakthroughs can occur over night. My clients don't have time to read hundreds of newsletters and blogs a month about trends and changes in the industry, and that is where I step in. Furthermore, I receive hundreds of solicitations a month for tools and methods of selling homes, and I consider each one so as to make sure I am doing everything I can for my clients.

John F. Kennedy once said: “Change is the law of life, and those who look only to the past or the present are certain to miss the future.”

Look before you leap into foreclosures

Avoid problems with 'Dummies' author's 12-item checklist

Inman News

As if Detroit, and the entire state of Michigan, hasn't suffered enough.

Last year, Detroit led the United States in foreclosures, with close to 5 percent of its households entering some stage of foreclosure, according to California-based RealtyTrac, an online marketplace for foreclosure listings.

That number was nearly five times the national average, and almost double the number of foreclosures the city experienced in 2006.

But every cloud has a silver lining. Just ask Ralph Roberts, a top real estate agent in Detroit who says he has personally bought and sold more than 2,000 foreclosures during his career.

"This could be a great time to buy a home -- if you have the resources," he said.

Roberts, who is the author of "Foreclosure Investing for Dummies" and "Flipping Houses for Dummies," said in a recent interview that he believes more than 6 million families are in distress nationwide.

"Maybe 1 or 2 million are behind in their mortgages and more have received their foreclosure notice," he said. "But 2 million families will lose their home this year."

Roberts says that now is the time to pick up properties at fire-sale prices.

"Properties could double in value over the next 10 years. But you have to be willing to go in, buy them, and hang on for the longer term," he advises.

With foreclosure investing, he says, you get what you pay for. His book on foreclosure investing isn't of the "get rich quick with no work and zero down in cash" variety.

Instead, he values doing as much homework ahead of time. To learn how to read complicated real estate and tax records, he suggests doing an exhaustive search on your own personal residence. Once you become familiar with how the information you know to be true is laid out in tax records, documents and deeds, you can begin to research homes in distress.

In addition to doing your due diligence on a particular home, Roberts suggests you create a file that contains:

• a copy of the foreclosure notice or notice of default;
• title commitment and a 24-month history in the chain of title or the last two recorded documents;
• a copy of the deed with the current homeowners' names;
• the last recorded first mortgage, so you know how much the current homeowners owe (some of this may be available online);
• copies or documentation of all liens against the property, including property tax liens;
• a map showing the location of the property;
• your exterior home inspection (with photos and videos), plus neighborhood photos;
• city worksheet on the property showing all repairs, inspections reports and other information;
• local multiple listing service (MLS) data showing how much comparable homes are selling for in the area;
• copy of the tax bills and notes on whether they are paid up or not;
• notes from meetings with or calls to neighbors, if you met with them while doing your research;
• and, a copy of the SEV (standard equalized value) of the property, on which property taxes are based.

"Most people, when looking for a foreclosure, think 'No'; they don't think 'Know,' " Roberts says. "To successfully buy a foreclosure, you have to build a Rolodex, get on the Web, talk to brokers, and go do your research."

Roberts said that the Internet has been a boon for foreclosure investors.

"Go to the county's Web site and see what kind of information they have listed. Sign up for the local legal newspaper. It costs about $1 per week," he explains, adding that he subscribes to a number of foreclosure Web sites, some of them paid sites. "You get what you pay for."

What I like best about Roberts and his books is that he appears to care a lot about consumers. He cautions foreclosure investors to think about homeowners and their redemption rights. He warns against being dishonest (foreclosure-rescue fraud schemes have grown exponentially, according to the latest figures from the Federal Trade Commission and the FBI).

And, he has put a lot of time and money into fighting mortgage fraud (see www.flippingfrenzy.com ). Last year he published "Protect Yourself from Real Estate and Mortgage Fraud," written with attorney Rachel Dollar.

For more information, check out Roberts' Web site, www.ralphroberts.com .

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center .

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