A panel of local real estate and financial experts spoke at the December Power Breakfast sponsored by the Greater Wilmington Business Journal on Thursday. Although their report on the past year was bleak, they were optimistic in their projections for 2010.

At the “Real Estate Reality Check,” a panelist noted that it has been just 15 months since Lehman Brothers collapsed, 120 U.S. banks have failed and unemployment has risen to 10.2 percent. “We can’t rely on consumers to increase spending,” said Bill Sackley, director of the Swain Center at UNCW’s Cameron School of Business, one of the panelists.

In normal economic times, it is common for real estate agents to have about five month’s worth of inventory. Today, however, there is a 14 month supply of property on the market, said Jim Wallace, founder and president of Intracoastal Realty, another panelist. Additionally, about $1.6 trillion worth of loans will come due in 2013 and about 60 to 75 percent of those will not meet the guidelines for refinancing.

“I don’t know any lenders who are lending for commercial real estate or residential development. That’s the biggest problem,” Wallace said. Dave Spetrino, president of Plantation Building Corp. resoundingly echoed that concern.

“Some banks are playing hard ball and have put businesses out of business. This is our community. We’re all trying to get through this together,” Wallace said.

But, Terry Espy, president of Momentum Group raised the issue that the local bankers have little control when it comes to decisions made by banks’ higher-ups. “The whole issue is a conundrum. These people are our friends. We know it’s out of your hands,” she said addressing the many local bankers in the audience.

By bringing viable development projects on land that he owns, Spetrino’s tactic is to present projects to local bankers and their banks that they can’t say no to financing. “I’m going to give [local bankers] a reason to go to bat for me,” Spetrino said.

When asked by an audience member if financing new projects will contribute to the problem of too much inventory in the market, Spetrino said, “You can’t build yourself out of a housing slump.” He has about 70 percent of his portfolio in rental property.

Diversifying is also key to the Momentum Group’s approach to their projects, which include The View on Water Street. “There’s a lot of private money,” Espy said. “There are bank loans, but you need to be well capitalized.” Hedge funds and teacher retirement funds, which can have an eight percent interest rate with investors demanding 30 percent ownership, are other options, she said. “Most investors of The View are cash buyers,” she said.

On the other side, banks are providing loans to homebuyers at historically low interest rates.  “You can get a 30-year fixed loan at five percent now,” Wallace said. The limited low interest rates may be key to stabilizing the market and ridding it of excess inventory.

When asked about the $500 million venture a handful of local real estate investors are embarking on led by Jon Vincent, the panel was generally supportive. “You’ve got an opportunity to seize a number of properties at a discount. It’s certainly pro-active,” said panelist Grayson Powell, broker in charge at Coldwell Banker Commercial Sun Coast Partners. History shows that if you buy right, you can sell right, he said.

“This is not a time to be modest,” Spetrino said. “ I applaud their courage.”

“I think it will have a positive impact,” Sackley said. From a psychological perspective, it could restore a sense of confidence in the market for others.

“Let’s support them at all cost,” Espy said. And, “when they’re successful, keep it local.”

For the year ahead, the panelists were generally optimistic with their predictions. “I think there will be a new economic lending engine with private investors,” Espy said.

“Banks will begin lending,” Spetrino said. “In 2010, we’ll play to win. We’re no longer farmers, we’re hunters. Wilmington, we must convey to the world, we’re a great place to be and do business,” he said.

“Real estate will improve because rates are historically low, tax credits [have been extended], [there is] government pressure on lenders to modify loans and people want to come to Wilmington for quality of life,” Wallace said.

In Wilmington, where almost 8,000 homes were sold this year he said, “We’re in a very sweet spot.”