We dug back into the archives on Carolina Plantations back to our eNewsletter dated October 2011. Exactly ten years ago, Doug penned an article “Selling for Less” in The Front Porch Gazette, which was the predecessor to Carolina Dreamin’, our current eNewsletter format.
The county was three years removed from the gut-wrenching financial collapse of our economy. Most homeowners across the country were selling their homes for less than they were valued in 2007 and early 2008.
The article pointed out that if you were selling your home in DC, NJ, PA, or MA, whatever you might be losing up there, you would be gaining down here, as our prices also tumbled. Fast forward ten years, and well, that certainly is not the case as just about every home listed in America sells within 48 hours.
But wait! Isn’t there some kind of irony going on here? We mean, does either market hurt you? Follow this logic for a second. Let’s look at what would have happened if you sold your home in 2011 for $400,000 or $500,000 in 2011.
Value of your Home Sale 2011 $400,000
Current Loan Balance 10/11 $100,000
Equity in your home $300,000
Cost of new home in NC $350,000
Net Cost of new Home $50,000
Value of Your Home in 2021 $500,000
Current Loan Balance 10/21 $50,000
Equity in your Home $450,000
Cost of new home in NC $450,000
Net Cost of New Home $0
We all know that the monthly cost of a $50,000 mortgage is relatively small (about $225 a month), so the irony lies in the fact that your home went up by $100,000. However, so did the cost to build a house down here in North Carolina. The net/net to you in this market is favorable but perhaps not as much as you had imagined due to the costs of building a home rising over the last ten years.
The problem today for many people deals with sitting on the sidelines waiting for lumber and materials prices to come down from their high earlier this summer. The retail costs have adjusted quite a bit; however, those prices adjustments just don’t seem to have made it through the supply chain yet, as many builders Doug has spoken to recently claim prices for almost all building products are still up sharply from the beginning of 2021. Until this occurs, resale homes appear to be the best bet financially, and this is what continues to drive a good portion of our real estate market in our country. If you’re ready to make that move from the Northeast to our beautiful shores of North Carolina, give us a call today. We are prepared to help you make the right decision to retire to Brunswick County.