The bad old days are gone.

At least they seem to be for the region’s real estate market.

“If the rebound isn’t complete, we’re real close. We’re getting there,” said Don Harris, president of the Wilmington Regional Association of Realtors. 

In the past several years, the local housing market has been rising steadily out of the slump of the Great Recession. And home sale numbers in New Hanover, Brunswick and Pender counties have been reaching highs not seen since before the downturn.

“We’re back at levels that are consistent with where we were in 2006 as far as price. Activity is trending up. Price is trending up again at a healthy rate, not at the overheated prices that we saw at the end of ‘06, ‘07 and ‘08 when we created an artificial market,” said Sherri Pickard, one of the managing brokers of the Coldwell Banker Sea Coast Advantage office in Wilmington and last year’s WRAR president.

The question now becomes what, if anything, could halt or at least have some effect on that upward trend in the future? Some answers local Realtors gave in recent interviews included the area’s job market, a shortage of affordable housing and inventory changes, a potential rise in prices and the normal cycle that most markets follow.

Wanted: jobs

Harris said part of the big picture for the housing market is jobs and wages.

“When you factor out what the mortgage rate is and the purchase price is and if they [the buyers] don’t have 20 percent for a down payment, which most people don’t nowadays, then you’re paying private mortgage insurance,” he said.

PMI and other fees associated with buying a home can take buyers “up to a point where a lot of people can’t afford based on today’s salaries in this market. You need a higher salary level, and we’re just not getting it … If we don’t have good-paying jobs, we don’t have anything,” said Harris, who also sells homes as a broker on the Keith Beatty Team of Intracoastal Realty Corp.

Pickard expressed a similar opinion.

“It’s an interesting line that we walk in the Cape Fear region. We’re a destination location for people to move to; we’re improving our opportunities for career advancement in the region, but we still need to do better so that the salaries and the income that people earn here can support them being able to find affordable housing,” she said.

At the same time, Harris, Pickard and other Realtors also say that, because of the area’s rental rates, it’s currently still cheaper for some residents to buy homes rather than rent.

Recently, Pickard listened to a presentation that gave her hope for the future. Ed Wolverton, president and CEO of Wilmington Downtown Inc., shared information about economic development efforts.

“That brought into focus how our region is matching up across the country with regard to startups and everything else,” Pickard said. “I was very encouraged and excited about the information he shared about how our region is viewed from people out of the area with regard to economic development, which includes jobs.”

Inventory

In Brunswick County, where the price point for homes is a little lower than in New Hanover, the inventory of homes is still higher – at eight and a half months – than the six months that signifies a balance, said Jim Goodman, president of the Brunswick County Association of Realtors.

He said the market has not rebounded completely yet from the depths. 

“We are climbing back into a balanced market, but we won’t be there until this inventory gets down even lower,” he said. “You’re still going to have buyers dictating prices.”

Goodman equated the situation to a weight-loss program. “You just don’t lose 30 pounds in a week,” he said.

But he added that at the height of the economic downturn of about seven years ago, the county had about 22 months of single-family home inventory. 

“We worked that all the way down to eight and a half,” he said. 

Meanwhile, in New Hanover County, the market has a shortage of some price points, mainly of homes that cost below $300,000, Realtors said.

“If it’s $175,000, it’s gone,” Harris said.

Ladd Gasparovic, operating principal of Keller Williams real estate agency in Wilmington, said the Realtors who work for his company are fielding multiple offers.

“That shows us that we’ve got some lower inventory in the lower price points,” Gasparovic said. “The market is still hot – the properties that show well and are priced well are getting a lot of attention. They’re selling fast.”

Builder confidence

With the number of available, buildable lots dwindling, New Hanover can be a tough market for homebuilders, said Howard Penton, owner of Wilmington-based Penton Development. 

He said he feels like he was lucky to have acquired land for two of his current development projects, Shinnwood West, a neighborhood on 46 acres on Greenville Loop Road, and the nearby Summerwalk, a mixed-use project including townhomes at Oleander Drive and Greenville Loop Road. The townhomes will go up first, Penton said.

“I’m hoping we’re going to be
putting water and sewer in late spring, and I hope to start some vertical construction in the early summer,” he said.

Penton sees the market for and development of townhomes increasing. He’s cautiously optimistic about how Summerwalk, where the townhomes will be priced around $200,000, will be received by buyers. In and around the Landfall/Mayfaire sub market, few if any townhomes have been built since the 1980s, Penton estimates.

“If we can get the very best design, hit a price point that’s very attractive, build as high a quality product as we possibly can … and we put it in the right location next to whatever’s there [referring to the commercial space] … maybe we’ll do OK. But you know, it’s a dangerous and iffy business even in the best of times.”

As far as the current state of home sales in the region overall: “I would say that our market is as strong now as it’s been since the recession,”
Penton said.

By the numbers

Last year was the best year ever for Coldwell Banker Sea Coast Advantage for closed sales volume, which hit more than $1.2 billion, said Tim Milam, president of the company. The company, which also has offices in Onslow County, had 5,800 closed sales, he said.

In January, the number of homes sold throughout the Wilmington area increased by 4 percent, from 400 to 416, compared to the first month of last year, according to some of the latest figures from WRAR.

This year the monthly home sales reports are based on numbers from the new N.C. Regional MLS. In general, winter months are typically slower, Realtors say.

But in Brunswick County in the first month of 2016, the number of units sold rose 38.5 percent, from 130 to 180, compared to the same month last year, according to the Brunswick County Association of Realtors, which also uses the new MLS.

“December was an unusually strong month, and January is following up the same way. I just think that the market continues to improve at all levels. We’re probably going to see more of this going down the road,” said Goodman, who is also a Realtor with Margaret Rudd Realty.

The local housing market has already turned into a multi-billion-dollar one. According to WRAR year-end numbers, the region racked up nearly $1.9 billion in total sales last year. Real estate, said Harris, is part of the region’s “whole picture” of economic growth.

“The vitality of the community is directly related to the real estate sales because of the related services and businesses that are affected by a real estate transaction. It’s incredible how important real estate is,” Harris said.

But despite the rising numbers in the region, it’s still important, Gasparovic said, to prepare for potential changes in the future.

“The markets are always cyclical. This will be the fifth year where we’re seeing improvement, and we know that what goes up must come down, and we know that in other markets across the country, their market is swinging to where it’s becoming more of a buyer’s market where they’re not having multiple offers,” Gasparovic said. “So we are coaching and training our agents accordingly because we know the market is going to shift.” 

But for now, Gasparovic said, “We feel very balanced.”