Sluggish residential home sales in tony Wrightsville Beach mean more long-term rentals of properties that had been listed on the open market.

The trend mirrors a practice seen across the Wilmington region, as some homeowners who tire of waiting for properties to sell opt to rent as a revenue-generating solution, several Realtors said.

Short-term rentals are rebounding in many beachfront communities, especially during peak tourist season, making long-term options limited in communities such as Wrightsville Beach.

But the increase in home, townhouse and condominium leases of six months or a year in duration is a definite factor in the Wrightsville Beach real estate picture.

The economy also factors into the equation in some instances where individuals or families are looking to move to the beach, said Karen Parkin, owner/broker of Wilmington’s Best Rentals and president of the Wilmington Regional Association of Realtors.
“If they’re leaving their houses or walking away from them they need somewhere to live, so our rental market is good. It’s picking up,” Parkin said.

In a recent week in late June, Parkin said she helped two clients from out of state find long-term leases in a Wrightsville Beach townhouse and condominium, respectively. One is a doctor and the other is also a professional.

The week before, Parkin closed three long-term leases on houses in Wrightsville Beach.

Parkin’s company manages nearly 300 rental properties in the Wilmington area. Some clients remain cautious about buying a home because of the economy, particularly in pricier locations like Wrightsville Beach, she said.

“I think a lot of people are still sitting on the fence. They don’t know what to do because of changes in the mortgage industry,” Parkin said. “They may not be approved at this time, so they may be waiting until they change the rules.”

Parkin estimates that between 8 and 10 percent of the properties available for rent through her company “were owners who pulled them off the market and put it in the rental program.

In the last six months, we’ve probably taken on about 20 properties that were on the market and haven’t sold and put it on the rental program,” she said.

Renting remains an option if a property doesn’t sell right away, she said.

“Not everybody is in the situation to let it sit awhile,” Parkin said. “If they’ve moved out of town or upgraded or bought another home and they’re not seeing any activity, they put it in the rental program.”

According to figures compiled by the Multiple Listing Service of the Wilmington Regional Association of Realtors, 24 properties sold in Wrightsville Beach between Jan. 1 and June 28, 2010.

Over the same timeframe in 2011, a total of 36 single-family properties were sold, ranging from a one-bedroom, 480 square-foot condo that went for $99,900 to a six-bedroom, 4,914 square-foot beachfront house that sold for $3.25 million.
The median list price was $714,000, and the median selling price for the properties was $637,500.

Of the 36 properties, 27 spent 120 days or more on the market before selling, or 75 percent of the total. Four sold in 30 days or less, two sold in 31 to 60 days and three sold in 61 to 90 days, according to the MLS figures.

For owners of rental properties in Wrightsville Beach not compelled to sell by financial circumstances, the market is currently very healthy. Statistics aren’t kept that make a clear distinction between long-time rental property owners and those who decided to rent after not being able to sell their home due to slack real estate market conditions.

Tracy Maurer, long-term rentals manager for Intracoastal Realty, said there is virtually no growth in long-term rentals among rental property owners in Wrightsville Beach “because the market for weekly vacation rentals is still very strong here.”

“There’s a demand for long-term rentals — but there is no inventory,” Maurer said. “Owners can make so much more money with weekly rentals that they are not motivated to put properties into long-term rental.”

Whenever a long-term rental comes on the market in Wrightsville Beach, “it is rented very quickly,” she said.

Intracoastal Realty manages 300 long-term rental properties in New Hanover County, including 17 in Wrightsville Beach.
“Long-term rentals in general in New Hanover County are doing very well. Their inventory is down to 8 percent now,” Maurer said.

The short-term rental market remains robust, said Kim Rudder, vacation rentals manager for Intracoastal Realty.

For Memorial Day weekend, Wrightsville Beach vacation rentals were up 50 percent in 2011 over 2010, Rudder said.
Intracoastal’s Wrightsville Beach properties were 96 percent occupied for the 2010 Fourth of July holiday. The figure for this year is 98 percent, Rudder said.

The current trend in short-term rentals is partial-week rentals of fewer than seven nights, according to Rudder. Seven nights is the standard weekly rental.

“People want to visit Wrightsville Beach, but because of the economy, (they) cannot afford the traditional seven-night stay, so they are requesting short stays,” Rudder said. “Intracoastal Realty has been proactive in responding to these requests by creating a list of properties that are willing to accommodate partial-week rentals.”

More property owners in 2010 opted to rent their property on a long-term basis of six months or more than in 2011, said John Pierson, general manager of Bryant Real Estate.

“Certainly some of it was in response to the economy,” Pierson said. “I haven’t seen as many people go to long-term rentals this year.”

While vacation and available long-term rentals in beachfront communities are strong this year for Bryant Real Estate, consumer caution related to the economy may be a factor in Wrightsville Beach’s slow home sales market, Pierson said.

Unlike some other area beach towns, there are few short sales and bargain prices in Wrightsville Beach, he said.

“It’s certainly pricing. People who can afford the property in Wrightsville Beach want to hang on to their money,” Pierson said. They’ve got the money to spend on the property. They’re just hanging on to it.”