Buzzy Northen is arguably having the best first five months in his new career as a Realtor with Wilmington-based Intracoastal Realty Corp.

After moving from Richmond, Va. recently to his Figure Eight Island vacation home of 27 years, Northen has had a banner start to 2013.

“It is incredible,” Northen said of the housing market at Figure Eight Island. “There was some hesitation at first … but since coming out of the recession, it seems people are becoming more comfortable.”

Comfortable could be an understatement. 

Northen executed one of the largest Figure Eight Island transactions since February 2010 when he sold a more than $4 million waterfront mansion to an undisclosed buyer in late January.

It was also big money for the buyer’s representative, Jim Hardee with Wrightsville Beach-based Hardee Hunt & Williams. 

And as Northen begins to settle into his new career, things could get even better.
He’s currently got a nearly $5 million home under contract in the same community, signaling a positive shift in the region’s high-end luxury housing market.

“I feel like the high-end market is back,” Northen said, adding that the home currently under contract was snatched up a potential buyer one day after it was placed on the market. “There have almost been as many transactions in the first quarter of 2013 than during all of 2012 … and that speaks well of the island and the area.”

Market movement
Highlighting low mortgage interest rates, existing inventories and competitive pricing, area Realtors say buyers are becoming savvier about their options to purchase.

Jim Wallace, president and CEO of Intracoastal Realty, said the area’s luxury and high-end luxury housing market began taking a turn for the better during the last quarter of 2012. He said the same momentum was carrying his and other area realty firms to higher sale and contract volumes this quarter.

“We’re starting to move from a buyer’s market to a seller’s market,” Wallace said. “What we saw during the recession was a depression for the real estate market … but what’s fascinating is how quickly things have started turning around.” 

Realtors say many of the buyers are corporate business executives from the U.S. Northeast or the Triangle and Triad areas of the state who reside in the region and conduct their business elsewhere. Other buyers are purchasing high-end luxury homes as their secondary residence for the weekend or summer vacation season, are snowbirds from the North buying their dream retirement homes or local residents looking to upgrade into a larger home.

Wallace said many of the buyers were paying cash for these types of homes to quickly secure a contract and avoid a bidding war with other interested parties.

Nowhere in the region is that happening faster than in Wrightsville Beach, Figure Eight Island and Landfall – three areas seeing sales and contracts on multiple offers for luxury and multi-million estates on waterfront lots, according to area Realtors. 

Other mainland housing developments, such as Parkside at Mayfaire, Porters Neck and Autumn Hall, are also seeing new high-end home and lot sales increase. 

In greater Wilmington, luxury homes start between $500,000 and $600,000, while high-end luxury homes start in the $1 million range, according to area Realtors.

Randall Williams, broker in charge for Hardee Hunt & Williams, said his firm already this year has brokered six properties priced at more than $500,000, including a $2 million single-family home along the Intracoastal Waterway in Landfall.

He added the group, which specializes in high-end waterfront real estate, also received multiple offers for more than $1 million for a home in Wrightsville Beach.

Wallace said in some cases, buyers were snapping up older waterfront homes – particularly in Wrightsville Beach and Figure Eight Island – and tearing them down to build more modern structures because the lot prices have become more valuable than the house.

Other hot spots
The Pleasure Island area is also seeing a resurgence of luxury and high-end home sales. 
Justin Donaton, owner and broker with Carolina Beach-based Coastwalk Real Estate, said while the area was slammed after the housing crisis in 2008, things were beginning to turn around.

“We sold a home for $660,000 in Seawatch,” Donaton said of a recent transaction this month. “In general, people are looking at the value of what’s offered.”  

Located in Kure Beach, homes in the Seawatch community sell between $500,000 and $2 million.

Donaton said activity was also picking up in the Live Oak Village housing development in Kure Beach and the Seagrove community in Carolina Beach – where several homes are currently under construction or under contract for $350,000-$800,000. 

While the barrier islands are seeing high-end luxury home sales ramp up, mainland sales are also rebounding, especially in Landfall.

Vance Young, a Realtor with Intracoastal Realty, said the enclave of existing high-end housing and inventory in the region’s first upscale master planned community was dwindling fast.

There are currently 108 active listings in Landfall. That’s down from 150 listings two years ago, according to the Wilmington Multiple Listing Service (MLS). Over the past 12 months, 91 homes have been sold in the housing community, and 18 are under contract.

“[This is] the last time I can remember since 2008 where more homes were sold than available,” Vance said. “Now, we’re at a one-to-one ratio.”

Landfall lots are also following a similar trend.

There are currently 62 lots for sale in housing community, down from 117 lots in 2011, according to the Wilmington MLS. During the past 12 months, 70 lots have been sold in Landfall with eight now under contract.

Michelle Clark, a Realtor and team leader of Wilmington-based Michelle Clark Team of Intracoastal Realty, said many of the troubled assets that once suppressed prices and clogged inventory in Landfall have mostly been purchased.

“Landfall seems to be doing extremely well,” she said. “Foreclosures and short sales are down … and I expect that trend to continue.”

Headwinds
As the region’s high-end housing market starts its trek to recovery, some Realtors say the niche market is not totally out of the clear.

Recent increases to flood and home insurance rates could cause some buyers to seek less expensive properties on the mainland. The skittish state of the national economy or a natural disaster could also affect the high-end home sales market – especially along the barrier islands.

But Realtors say given the area’s healthy inventory and competitive pricing, the high-end home market has positioned itself for solid, modest recovery. 

“The inventory of premium properties for sale is decreasing, setting the stage for modest appreciation as demand increases,” Williams said, “shifting the market to a more balanced pendulum between buyers and sellers from a negotiation standpoint.”

Donaton said builders were already recognizing the opportunity to build more high-end homes in the region.

“We’re working with several high-end builders, and they don’t have a ton of options right now,” he said. “I think we’re going to see a continued gradual adjustment over time, but the unhealthy habits of the past hopefully won’t return.”