Although a couple facets of the local economy are showing signs of a full recovery since the recession, the housing market in the Wilmington region is “coming back,” an economist said Wednesday.
“We’re in a lot better shape than we were five years ago, but we’re not where we were 10 or 11 years ago," William “Woody” Hall, senior economist at the University of North Carolina Wilmington, told those attending an economic forecast breakfast Wednesday morning in downtown Wilmington.
The forecast was hosted by the Wilmington-Cape Fear Home Builders Association at The Balcony on Dock Street, a venue on the third floor at 33 S. Front St.
Overall, Hall said he predicts the Wilmington Metropolitan Statistical Area consisting of New Hanover and Pender counties to grow, through its gross domestic product, by more than 3 percent in each of the next two years -- 3.5 percent this year and 3.8 percent in 2016.
Using numbers of homes sold from the Wilmington Regional Association of Realtors (WRAR), Hall said home sales increased by 141 percent from a low point around 2009 to the third quarter of 2014, with an increase last year of about 63 percent since a peak in 2005. Meanwhile, sale prices have increased by 18 percent since the low point in the WRAR numbers, 15 percent since the low in the Brunswick County Association of Realtors (BCAR) statistics, he said.
In Brunswick County, the low point for home sales came in late 2007 and increased by 171 percent by 2014, a 64 percent rise from 2005, according to BCAR numbers from last year.
“I don’t know if it will ever come back to where it was in ‘05,” Hall said.
But the conditions in place that resulted in the 2005 high have since been recognized as a “perfect storm,” Hall said, leading to the point when the housing bubble burst.
“I feel like we’re back to a healthier level or approaching a healthier level than we were when we were there [2005],” said Shawn Horton, president of the Wilmington-Cape Fear Home Builders Association and owner of Trusst Builder Group, as Hall answered questions after his presentation. “I don’t want to go back there, personally.”
Hall said Horton's point was a good one. Unfortunately, Hall added, “there’s no way, I don’t think, to prevent bubbles from occurring.”
Hall, who retires at the end of the university’s spring semester this year, used several indicators in his forecast:
UNEMPLOYMENT: With the latest monthly unemployment rate at 5.3 percent in New Hanover County, “we’re pretty close to full employment,” Hall said.
RETAIL SALES: Retail sales grew by 11 percent in New Hanover County last year, Hall said. “This sector is back to where it was prior to the onset of the recession,” he said. But “retail employment is not coming back a fast as retail sales. We had some excess capacity in retail sales operations.”
TOURISM: Hall said tourism in the area is another of the economic sectors that’s come back from the recession, based on room occupancy tax data, with a growth rate close to 10 percent in New Hanover County last year. Dare County usually leads the state in tourism expenditures, Hall said, but New Hanover and Brunswick counties are in the top 10.
CONTAINER TONNAGE: While the port in Wilmington is smaller compared to other ports in the Southeastern United States, the local port’s container tonnage rates rebounded in 2013 from the previous year and continued that upward trend through the end of 2014, Hall said.
AIR PASSENGER TRAFFIC: Asking attendees to keep in mind that the Wilmington International Airport is a small facility compared to those in much larger cities, Hall pointed out a decrease in the number of passengers boarding and arriving last year through November 2014 compared to the same period last year.
In response to a question about what’s coming back fastest in the local economy, Hall said, “Health care, not surprisingly.”
Toward the end of his presentation Wednesday, Hall revisited previous forecasts by saying that from 2010 to 2012, “we underestimated growth. We thought the economy would rebound more slowly than it actually did.”
Hall said Wednesday’s event could be one of his last formal economic presentations, if not his last, as an employee of UNCW because his retirement is one 2015 event that he “can guarantee.”
