Home sales plunged in September as Hurricane Florence disrupted one of the area's busiest industries.
But local Realtors say the area's residential real estate market is already showing signs of recovery, not counting delayed September closings, because October contracts are on the rise. Meanwhile, national numbers released Friday show a decline across the country in existing-home sales, which a national economist attributes to rising interest rates.
In Pender County, which saw some of the worst of Hurricane Florence's flooding of the three counties in the Cape Fear region, the number of homes sold in September compared to the same month last year plunged by 63 percent, to 37.
That's according to data from the N.C. Regional Multiple Listing Service compiled by Wilmington-based Coldwell Banker Sea Coast Advantage. The report also showed a 52 percent drop (to 208 homes sold) in New Hanover County and a decline of 48 percent (to 213) in Brunswick County.
"We lost three weeks of business due to Hurricane Florence, but what's really good to see is if you look at week 41 of the year, which was last week, we're still up 39 more contracts compared to the same time last year," said Denise Kinney, senior vice president of Coldwell Banker Sea Coast Advantage, referring to the firm's own contracts. "That's 23 percent. The volume's up 34 percent. So the market's coming back after the hurricane."
Most of the homes under contracts that Kinney's company worked on before the storm, which made landfall Sept. 14 near Wrightsville Beach, are on track to be purchased or have been purchased, she said.
"We don't think we lost but maybe about 10 percent of contracts," Kinney said.
Overall, the local housing market's leading indicators are expected to finish 2018 in at least a little better shape than last year. In the three-county region combined, the number of homes sold fell about 51 percent in September this year compared to September 2017, but were up about 1 percent for January through September, according to a Cape Fear Realtors report issued Friday afternoon (see chart below)
Realtors are optimistic about the future.
"The real estate market is recovering quicker than we expected after the storm," said Lake Slacum, vice president of marketing for Wilmington-based Intracoastal Realty, in an email Friday. "We’ve had some new listings, post-storm, that have gone under contract in less than a week. We expect there to be strong demand leading up to – and continuing through – the spring market."
But taking Florence out of the equation, challenges remain for the housing industry, including an ongoing shortage of homes in certain price ranges.
"The latest absorption analysis, which measures supply and demand of homes for sale by price range, shows on overall 10-year low for New Hanover, Brunswick, and Pender counties. The result of the low amount of inventory of homes for sale and high buyer demand is a sellers’ market," Slacum said. "This very dynamic presents the biggest challenge for the real estate market in the area; we need more listings in order to satisfy the healthy buyer demand in most price ranges."
Nationwide, rising interest rates (rather than the weather) led to the September decline of existing-home sales, not just in the South but across all regions, according to a National Association of Realtors report released Friday
NAR officials stated that the number of existing homes sold last month was down 4.1 percent from a year ago (from 5.37 million in September 2017).
“This is the lowest existing-home sales level since November 2015,” said Lawrence Yun, NAR chief economist, in a news release. “A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
In the U.S., first-time buyers were responsible for 32 percent of sales in September, but that number isn't high enough, Realtors stated in the report.
“Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range,” said NAR President Elizabeth Mendenhall, a Realtor from Columbia, Missouri and CEO of RE/MAX Boone Realty, in the NAR article.
While a lack of affordable housing is a nationwide issue, it could also become even more pressing in the Wilmington area as a result of Hurricane Florence, and not just for homebuyers. Some renters might end up being affected the most.
"Before Hurricane Florence (HF), data compiled by the N.C. Housing Coalition showed that almost 19,000 renter households, about 50 percent of all renters, paid more than they could afford for housing. Local media has reported displacement of residents in two multifamily developments that were developed to serve lower income households (Market North Apartments and Cape Fear Hotel), and other older rental developments, which may have also served lower-income households, have been closed due to HF," said Suzanne Rogers, community development and housing planner for the city of Wilmington, in an email Friday. "Given the low vacancy rate prior to HF, I expect the loss of any affordable units will exacerbate the problem of a lack of affordable housing. Housing cost burden leaves households with less resources to deal with emergencies like HF and little savings for repairs and/or insurance deductibles."
Tri-county statistics from Cape Fear Realtors
||Jan - Sept 17
||Jan - Sept 18
||- 7 Days
|| - 7 Days
|Avg. sales price