October 2010: Beaufort County housing already feeling fall chill | Eastern North Carolina Now

    Fall is the beginning of the slow season in housing, and, in Beaufort County, market activity is beginning to reflect that. To illustrate this fact, I have taken a snapshot of Washington's market activity in August, September and October, by generating a Residential Sold Report via the Realtors' Multiple Listing Service database.

    From a sales chart of August, you can see that 19 residential units sold; as opposed to nine in September and five, so far, in October. From a sales summary of August, you can see that the total sold dollar volume was $3,169,123; as opposed to $1,301,500 in September and $660,500, so far, in October.

    Typically, if sales plunge, inventories rise; and when inventories rise, prices fall. The Washington housing market is defying this logic. From August to October, the number of active residential listings on the MLS decreased from 355 to 344 to 326, for each respective month. Furthermore, since August, the average list price has increased from $223,055 to $227,221 to $230,061, for each respective month. Nationally, however, according to Clear Capital, home prices fell 5.9 percent over the past two months through Oct. 22.

    Therefore, even though sales are decreasing in Washington, inventories are not rising. This is because many homeowners are either taking their properties off the market or letting them go into foreclosure. That means there is a shadow inventory of homes awaiting foreclosure, which explains the lack of proportional demand. Realtors aren't factoring in this shadow inventory when pricing property, and buyers know it. Buyers realize that they have plenty of time to wait for homeowners to factor the backlog of foreclosures into their pricing; or, in the meantime, they might even come across their dream home posted on the wall of foreclosures at the Beaufort County courthouse.

    With the Beaufort County jobless rate still at 10.5 percent, buyers are incredibly timid. These consumers have little confidence in the current prices of property, as well as the current prospect of maintaining their current salary level. Not only could new buyers still find themselves upside down in a mortgage when prices drop, but they find that they have no way to make payments.

    This afternoon, I will visit the Beaufort County courthouse to compile a list of current foreclosures in the area, which I will post here.