Let the Final Quarter of 2015 Begin

With three quarters of the year now gone, it is time to draw some conclusions about the nature of the real estate markets this year. 

The national picture has seen real estate prices de-celebrate a bit, but still show about a 5% gain over this time last year.  On September 21st, the National Association of Realtors reported  that sales of existing homes fell 4.8% in the month of August, marking the first decline in four months and also reported a slowdown in pending home sales of 1.4%.  The Case-Shiller Index also reported a slight decline in home prices for the month of July but still showed a 5% year over year increase in the 20 city index.

While the Consumer Confidence Index rose again in September on the perception that jobs have become somewhat easier to find and that the prospect for wage increases in the months ahead are improving, the stock market turned in it's worst month of the year, declining about 7.5% for the month.  After bouncing up and down like a yo-yo, the 10 year Treasury closed out the month of September at 2.03%, the low end of it's range for the month.  In spite of all of the conjecture about the possibility of an interest rate increase in the near future, 30 year mortgage rates remain low at about 4% for a 30 year fixed.

The historical range of home prices is about 3.5 times income.  At the peak of the real estate bubble this ratio expanded to about 4.8 times and fell to about 3 times income at the low point.  This ratio now stands at about 4.4 times earnings.  Any increase in home prices from here will have to be accompanied by an increase in earnings, so it would be unrealistic to expect home prices to shoot up from where they are right now.

With the slowing Chinese economy and the struggling European economy, the meager growth in the US economy looks pretty good.  It is most likely that the weakness abroad is what convinced the Fed to leave interest rates unchanged for the time being.

As we suggested earlier this year, it looks like the local real estate market here in Pamlico County will show an improvement this year over 2014 levels and, as we begin the fourth quarter, that looks to be even more likely. 

Here in Pamlico County, ninety one homes have closed through the end of September this year compared to only 72 homes during the same period last year.  There were 21 homes pending at the end of September, one priced above one million, one in the mid $500,000 range, and three in the $400,000 range.  Ten home sales closed during the month of September, one in the one million dollar range and one in the upper $300,000 range.  We are seeing a bit more activity in the upper end of the home price spectrum than we did last year, but the majority of the activity is still at lower price points.

Sales of vacant lots are also running somewhat ahead of last year's levels.  There were nine lots closed for the month, bring the total of lot sales for the year to 51 compared to 37 for the same period last year.  While lot sales are still lagging behind home sales in both quality and quantity, they, too are well ahead of last year's pace.

You hear it mentioned in the larger markets across the country that there is a lack of inventory.  Well, there really is no lack of inventory here in Pamlico County in quality waterfront homes and lots.  If you cannot find what you want in terms of existing homes, there is an ample supply of quality waterfront lots on which to build your ideal home in one of the nicest waterfront settings on the east coast.

Note:  statistics shown for local real estate activity have been taken from our local MLS service.