If the latest population growth predictions come true, the number of area residents will continue to grow at a fast pace for the next two decades at least. More residents mean more housing and more attention for the residential real estate market. The following are trends that will have an impact in the Wilmington area during 2018 and beyond:
1. Supply Keeps Shrinking
For the past several years in the tri-county region of New Hanover, Brunswick and Pender counties, the supply of homes for sale, especially at certain price points, has been shrinking.
The months of supply of homes in January this year decreased to 3 months, down from 3.5 months in January 2017.
Lawrence Yun, chief economist of the National Association of Realtors, said the overall housing inventory in the U.S. “is currently near historic lows.” But there was a rise in January in new home construction, according to a report from the U.S. Department of Commerce.
“This boost in housing supply not only helps the economy, but may also help the Federal Reserve temper the pace of future short-term rate hikes. That’s because the slow upward creep in the broad consumer price inflation is principally being driven by rising housing costs. Simply put, more housing supply means a lower inflation rate, and potentially a slower pace of interest rate increases by the Fed,” Yun said in response to the report.
2. Homes Smarten Up
Examples of incorporating technology into new homes abound. They include everything from thermostats a homeowner can control from his or her smartphone to something as simple as building a phone or gadget charging outlet into a countertop.
That’s on top of the energy efficiency measures more homebuyers are demanding to conserve energy as well as save money on utility bills.
3. To Tech With It
There’s no doubt potential homebuyers are searching online when they get ready to relocate or buy a new house in their current communities.
David Williams, a Realtor with Century 21 Sweyer & Associates, said buyers will often already have a lengthy list of properties that they want to see that they’ve found on websites such as Zillow.com.
Coldwell Banker Sea Coast Advantage is working with Zillow to buy leads to give to the firm’s agents, said company president Tim Milam.
“That will allow our agents to hopefully get more leads and our Realtors to have more business coming to them that they can then go make the sales” because of Zillow’s enormously high online traffic, Milam said.
Some local Realtors are tapping into emerging technology as well. One example: Wilmington company SISDigital firm developed and created SkyNav, a web-based immersive virtual reality tool that residential real estate firm Intracoastal Realty is using to allow potential homebuyers to experience neighborhoods in the area.
4. Apartments Remain Popular
As of the fourth quarter of 2017, more than 1,000 apartment units were under construction in the Wilmington area, including in various spots around New Hanover County and in Leland in Brunswick County, according to Richard Cotton, managing director of Multifamily Realty Advisors and a commercial broker who specializes in the sale of apartment communities and apartment development sites.
“That’s the lowest number of units that have been under construction in the last couple of years,” Cotton said.
Meanwhile, the vacancy rate for apartment communities in Wilmington was still low the last time it was measured, at 7 percent as of June 2017, according to Real Data.
“It’s been pretty remarkable that we’ve gone from a market that had 10,000 units to almost 15,000 units since the beginning of 2013, and it hasn’t adversely affected occupancy,” Cotton said. “In fact, occupancy is higher today than it was at the beginning of 2013. In five years, we’ve increased the number of units in this market by 50 percent; that’s pretty amazing.”
Meanwhile, apartment rental rates have continued to increase. The average apartment rental rate for the Wilmington market is now $1,023 per month, or $1.10 per square foot, Cotton said in a market update for the fourth quarter of 2017.
5. More Join Realtor Ranks
The number of people who want to become Realtors typically wanes when the economy is lagging and increases when it’s strong, Realtors say.
“We’ve seen a consistent growth in our real estate school. We run typically about two or three classes at a time, and those classes will have 30 people in them,” Milam said. “Go back five years ago, those classes would have had 15-20. So as the market’s gotten better, more and more people are getting in the business, and I think it’s going to continue for another couple of years.”
Local real estate companies have also been expanding and adding offices in recent years.
6. Remodeling Vs. Brand New
As home prices rise, some people opt to remodel their home instead of trying to buy a new one. A low supply of homes also means more people are turning to the resale market, and, in turn, more are turning to the remodeling market, according to experts with data firm Metrostudy.
7. Smaller Footprints
Realtors say some buyers, from baby boomers to millennials, are opting for smaller homes. Where they might have purchased something bigger in the past, they’re choosing less square footage in some cases now. Additionally, townhomes are increasingly in demand and being added to the inventory of developments throughout the region.
8. Moving Farther Out
With the opening of Interstate 140 in December providing a faster connection between Brunswick and New Hanover counties, more land will likely be used to develop more homes. That’s particularly true for hundreds of undeveloped acres in the Brunswick County town of Navassa because of its I-140 access.
Meanwhile, local real estate industry experts maintain that growth will continue in nearby areas, such as the Pender County community of Hampstead, as land becomes more expensive in New Hanover.
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