Local and national experts in the homebuilding and real estate fields shared their predictions Thursday for 2021, expressing optimism but also some dread.
“We are seeing great backlog. We are seeing our processes continually improve. We are adapting to the market,” said Dave Spetrino, president and founder of PBC Design + Build. “And I have never been this paranoid . . . it has been a decade since I've been this paranoid and . . . I am spending more time and effort thinking strategically about how we manage our cash, what we do with our holdings.”
He said he’s got the wisdom of the years that led up to the Great Recession, “so even though we seem to be in a market that I should be enjoying, I have never been more uncomfortable.”
Spetrino and other panelists talked about the future and a variety of other industry topics during the Cape Fear Sales & Marketing Council’s Builder Breakfast Panel on Thursday morning. The event was held virtually via Zoom and presented by the Wilmington-Cape Fear Home Builders Association. Cameron Moore, executive officer of the WCFHBA, led the discussion.
John Lennon, director of operations for River Bluffs Development Corp., said he would echo Spetrino’s caution.
“I see a lot of signs that I saw back in [2005 and 2006]. And I pay very close to appraisals across the board and I think material [price] increases have exacerbated that problem,” Lennon said. “I think 2021 will be great, but I’m nervous beyond that, for sure.”
Bill Killmer, senior vice president for legislative and political affairs for the Mortgage Bankers Association, along with Jim Tobin, chief lobbyist for the National Association of Home Builders, shared some of their expectations.
Killmer said, “I think we see modest [mortgage] rate increases in the near-term horizon, but I think it's also been pretty clear that you've got continuity at the Fed with Chairman [Jerome] Powell being in office with his term until 2022. You've got the Biden administration publicly acknowledging they're going to nominate Janet Yellen.
"That would be the first woman treasury secretary, but also the first former chairman of the Fed. And I think that team is going to do everything they can and certainly the Fed has acknowledged that they're going to do what they can to keep rates low.”
Killmer pointed to what that has meant this year and what it likely will mean next year.
“One of the strange anomalies of this pandemic . . . has been the mortgage origination volume. I mean, a lot of our members, and the mortgage folks on this call, I think we acknowledge that every market is different but it's been a record year,” Killmer said. “Almost $3.5 trillion in mortgage originations is what . . . the final numbers look like they'll be and about $2.5 trillion in 2021 is what our economist is projecting.”
In another prediction for next year, Heath Clark, panelist and owner of Bill Clark Homes and Legacy Homes by Bill Clark, said, "This area will continue to be a very likable spot."
To hear more of the discussion, follow this link to the WCFHBA's podcast page.