Two years ago, lots in the Seagrove subdivision in Carolina Beach were just that – lots. 

Stuffed with towering pines and streets lined with palmetto trees and decorative streetlights, many of the available home sites were void of any activity. 

“In 2011, we only made three sales,” said Jimmy Hopkins, a Realtor with Wilmington-based Intracoastal Realty who sells homes in the subdivision. 

But just two years later, things have drastically changed. 

“In 2012, we had 30 sales,” Hopkins said of the spike in new home site sales. 

“We have so much construction happening in the community that you can barely get down the street.” 

It could be a sign of the times. 

Seagrove, like much of the Pleasure Island area, is beginning to get its groove back after seeing its housing market implode in 2008.    

But the area, a barrier island swath housing the towns of Carolina Beach and Kure Beach, is long from its glory days. 

“Sales have been better for the past year,” said Bob McKoy, president and owner of Network Real Estate that operates an office in Carolina Beach. 

“Our inventory was extremely high, and that has since come down to a 12-month supply. Pricing is also firming up, but it’s nowhere near what we saw prior to the bust.” 

Rise and fall 

As the great American housing bubble began to inflate, Pleasure Island was arguably one of the hottest real estate markets on the East Coast. 

A year before the market crashed, 305 single-family homes were sold on the island for an average price of $437,401. In 2008, the number of home sales plummeted to low of 231 single-family homes, but pricing would remain competitive. 

That is until 2011, when the average price for a home cratered to an average price of $281,818. 

Despite seeing more than 375 single-family homes sales last month, the 2011 average price for a home on the island has yet to recover and currently sit at $281,913.

McKoy said the gradual decline in pricing could be blamed on the record number of foreclosures and short sales that slammed the area after 2008. He added the island also experienced a glut of new home construction, which made it difficult stabilize prices and bring down area’s inventory.

“We had a bigger bubble than the rest of area,” McKoy said. “There was too much building and flipping, and people got caught and were foreclosed on, which drove our prices down quickly.” 

And they stayed down. But that isn’t necessarily a bad thing. 

“The low prices has made this a buyer’s market,” McKoy said.“People are coming here, buying their piece of beach and building their homes for 30-50 percent less than what they would have paid during the boom years … that has helped to improve homes sales.” 

Shoring up 

Hopkins said while long gone are the days of brisk home sales at astronomical prices, the Pleasure Island housing market is gaining momentum. 

For starters, Hopkins said the island lacks new home inventory – a void developers are hoping to fill in the area with the continued growth of Seagrove and other subdivisions in the area. He added that the existing homes on the market are competitively priced to sell.  

“The seller must be cautious and realistic,” Hopkins said. “The resale value is all over the map right now. For example, I have an oceanfront property that was worth $499,000 and is now listed for $269,000.” 

McKoy agreed, adding that despite the high inventory, area Realtors were seeing multiple offers for homes in the area. 

“That’s something we did not see after the crash,” he said. “It’s definitely encouraging.” 

McKoy added that many of the buyers are purchasing homes with cash and that a number of the new property owners – coming from places such as the Triangle, the Triad and cities of the U.S. Northeast – are buying their retirement and vacation homes on the island. 

The area’s rental market is also helping to drive sales. 

“People will vacation here, and when they are ready to retire or relocate, they come back and buy,” McKoy said. “I’m not saying this happens all the time, but it is certainly part of the increase in sales.” 

Hopkins said infrastructure and code enforcement in the Pleasure Island towns were also helping to sell the area. 

“The area has had a resurgence over the last five years,” he said. “The boardwalk is back, there are more year-round businesses and they have a great school, which is helping to lure younger families to the area.”