Home sellers who are looking for the value of their homes to go up might have to wait until 2010.
Experts hold out a sliver of hope that the end of 2009 will bring improvement, or at least stability, in sales and prices of single-family houses. That hinges on whether the credit markets loosen, excess inventory gets bought, interest rates stay low and consumer confidence gets a boost.
"We're working our way toward the bottom," said Coastal Carolina University research economist Don Schunk, "but there's still so much inventory out there, it's going to keep putting downward pressure on prices."
The prices and number of homes sold was on a downward slope in 2008, and that trend so far has continued this year. Home sales in Horry County fell 40 percent in 2008 from 2007 levels and median selling prices dropped 13 percent to $187,500, according to information from N.C.-based Market Opportunity Research Enterprises, a firm that collects data on the residential construction industry. The median price is where half sell for more and half sell for less.
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Georgetown County sales were down 31 percent, and prices fell 14 percent to $235,330. In Brunswick County, N.C., sales dropped 33 percent and median selling prices fell 5 percent to $214,000.
Mortgage rates are favorable, and a lot of people are looking at real estate, Schunk said. However, actually locking in one of those low rates can be challenging because lenders have tightened up and many people don't have enough cash to make a hefty down payment, Schunk said.
The condo market is expected to lag behind the single-family house market when housing does rebound. That was the arena that saw the biggest runup in sales and prices when the market was hot from 2004 to 2006.
Tom Maeser, market analyst for the Coastal Carolinas Association of Realtors, said gains in condo sales and prices probably won't be realized until 2010.
The condo market could get an extra nudge if the state's point-of-sale real estate reassessment gets changed in the legislature this year. It's a measure that stems from a 2006 property tax law that Realtors say have driven away investors.
"If they will do away with that, I think that definitely will stimulate the investment arena here and it could have its greatest impact on the condo market," he said.
There are still some types of properties in demand.
The bout of foreclosures that have hit the market have been selling quickly at distressed prices, Maeser said.
"That's kind of what's driving people right now," Maeser said.
Foreclosures are also expected to sway the rental market, which should see more activity in 2009, "It is estimated that nationally, almost 2 million homes will be foreclosed on in 2009. This will transform many former homeowners into tenants," Maeser wrote in his forecast. "Banks will start to rent their real estate owned properties rather than sell at a substantial loss."
Homes in demand will also be smaller and more energy efficient, he wrote.
Real estate companies will merge to weather the downturn, meaning there will be less competition in the industry and fewer agents, according to Maeser.
Home inventory, especially new home inventory, should shrink this year because builders have scaled back.
Even when the housing market reaches a floor, it could be three to five years before construction activity sees a strong enough uptick to start adding jobs, Schunk said.