Staff photo by Allison Potter
New inventory nears completion at Autumn Hall.
Since the bursting of the housing bubble and the subsequent economic recession, Jim Wallace had seen property values down by as much as half of their listing prices during the market’s 2007 peak. However, Wallace, CEO of Wilmington-based Intracoastal Realty Corporation, said he has recently seen a normalizing of the local real estate market.
“We’re down to a pretty even market now in the lower price ranges; from $100,000 to $400,000. They’re below six months on the market,” he said. “That’s an amazing turnaround from where we were just two years ago when we had 12, 13 months on the market. When you have that kind of situation your prices are going down. There’s pressure to discount, to move the house because there’s so much on the market.”
This, he said, has resulted in an ongoing renter’s market. During the initial stages of the housing slump, many investors were buying up properties that had gone or were going into foreclosure. Taking advantage of a sharp decline in mortgages and bank loans, which kept many first-time homebuyers out of the market, they turned those houses into rental properties, which were suddenly in higher demand. Wallace said that while Intracoastal Realty has two offices entirely dedicated to rentals, they are still looking for more properties to satisfy the market.
As of the Wilmington Regional Association of Realtors’ Aug. 7 report on homes built since 2012, 167 were listed as active, meaning that no closings had yet begun on the properties. All but eight of those were less than one year old.
Donna Girardot, CEO of the Wilmington-Cape Fear Home Builders Association, said during an Aug. 2 interview, that despite the supply of new inventory trailing the demand, new homebuyers are beginning to enter the market from the North.
“The market up North is improving which allows migration to resume,” she stated. “When people up North in the 50-plus, young retired demographic are moving from New York, New Jersey, Pennsylvania and Ohio, they retire down here. If they’re not able to sell their house up there they can’t migrate. … First-time homebuyers are also starting to re-enter the market. The banks are starting to feel a little safer.”
Wallace agreed with Girardot’s premise, adding that the dominance of the rental market could see a shift as more buyers enter the market.
“We’ve noticed that more buyers are coming out of the Northeast,” he said. “Our phones are ringing with people from the Northeast and as far west as Chicago.”
As prices have ticked back up to their actual value across the country, houses in the Northeast that sat on the market for the past couple years are being sold by “empty-nesters” seeking retirement in a milder climate. Wallace also said that his offices have observed an increase in second-home buyers based in Charlotte, North Carolina, and especially in the Triangle region.
“It’s a big trend,” he said. “Wilmington is one of the most sought-after areas in the county. There are so many things that attract people here.”
One change Wallace has seen in today’s new house market, versus six years ago, is an overall downsizing of homes. Noting that his company has posted a 77 percent year-to-date increase in sales of homes priced at more than $1 million, he said, “the high end buyer is back,” but builders are still currently focused on more modest dwellings.
“I don’t see a whole lot of new construction in the high end right now,” he said. “There is some, but it’s not as active as it was in the past. One of the results of this recession is that people are going a little bit smaller on the square footage and a little bit more conservative in what they’re buying today.”
Of the active listings for the Wilmington area, only five were in the $1 million-plus range. Two of those were located in Landfall, with the rest having been built on the Intracoastal Waterway. One of them has already seen significant activity, said Jim Spicuzza, owner of Harborside Holdings LLC, which owns the property at 8741 Bald Eagle Lane.
“We have three people circling right now that’s we’re in discussions with,” he said on Aug. 23.
That home, located on the tip of a Futch Creek peninsula to the north of the Porter’s Neck Country Club, includes a private dock, boat lift, 180 feet of soundfront view and a $1.4 million price tag. Spicuzza added that his company has generally seen an uptick in activity for higher-end homes as well.
Priced at $1.2 million, 5244 Woodscape Drive sits on 1.7 acres overlooking Masonboro Sound. To the north is the $1.8 million mansion at 136 Skystasail Drive in the Shandy Point community. Also with a sound view, the property covers less than an acre, but boasts such amenities as three deep-water boat slips, multiple Jet Ski pads, an elevator and a private dock.
For the near future, Wallace said he expects the rate of sales in the area to continue increasing. Intracoastal Realty has seen its year-to-date closings up 27 percent, due in part to a coupling of the historically-low 4.5 percent 30-year fixed mortgage interest rate and an increasing willingness on the part of banks to provide those loans.
“We had a bump in the interest rate, a full point from 3.5 to 4.5 [percent] and that knocked some of the buyers out of the first homebuyer market,” he said. “But I think one of the things it’s done is it’s gotten a lot of people off of the fence because they see that rates are most likely going to go higher over the next year or so. They see that trend, and it’s better to buy now before they go to 5.5 or 6. And eventually they will.”