The area housing market’s feverish activity has led some homebuyers to give up on trying to find an existing home that meets their needs.
 
The frenzied buying atmosphere, with multiple offers coming in within days, or even hours, of listing a home, is leading to higher prices and other side effects, including some potential buyers going so far as to submit cover letters with their offers to try to edge out the competition.
 
“At some point, they get tired and say, ‘Let me just go buy a new house,’” said Tim Milam, CEO of Wilmington-based residential real estate firm Coldwell Banker Sea Coast Advantage. “New home sales contracts are way up.”
 
Ashley Kent, president of Kent Homes, said she also believes the bidding wars over existing homes that are helping to drive up prices are having an impact.
 
“I feel like overall there has been, from what I see, less competition” between resales and new homes for that reason, she said.
 
Kent Homes builds houses mainly in Brunswick Forest and Compass Pointe in northern Brunswick County and in St. James in south ern Brunswick. Sales are going well in 2021, Kent said, with 33 homes sold as of May 14 compared to 25 at the same time last year.
 
The company goal is typically to have 75 to 80 closings a year.
 
Despite COVID-19’s disruption in March 2020, last year was also a good year for Kent Homes, with 92 net sales in 2020 compared to 78 in 2019.
 
“This year is more challenging than last year in a lot of ways because we do have a very long backlog,” Kent said. “We really focus on the customer experience … and we don’t want to overload our project managers. We want to have a great process for our clients so we still limit our starts to about seven or eight a month.
 
“So if you walked in today and asked one of our salespeople when you could start your home, we would be saying November or December.”
 
But the wait doesn’t seem to be prompting people to turn away from buying a new home, although price increases might have that effect eventually, Kent said.
 
Huge leaps in supply costs continue.
 
For example, the price of lumber has been skyrocketing, Kent said. The price of windows has gone up 15% since the beginning of the year, garage door installations have gone up 50% and roofing in general has gone up 20%, she said.
 
“It’s been a little bit more painful this year in terms of getting the margin we’re looking for and then just naturally getting materials,” Kent said. “We’re seeing a lot of struggles with supply chain issues.”
 
Homes in general in New Hanover, Brunswick and Pender counties are selling at a historically rapid rate, according to a report released this month by Cape Fear Realtors.
 
The trend, as shown by April statistics, is continuing to fuel multiple- offer situations for homebuyers and driving prices higher.
 
“Strong buyer demand and limited housing supply shows no signs of easing, pointing to a blazing hot summer market ahead,” according to the release.
 
In April, the tri-county region saw a surge in new listings, pending sales and closed sales. New listings jumped 44.3% over April 2020 while closed sales rose at a similar rate of 44.2% over last year, the release stated.
 
Pending sales experienced the largest increase, with a nearly 85% jump compared to the previous year.
 
Low interest rates remain a reason behind the ongoing flurry of activity, as well as the number of homebuyers moving from other towns and states to Wilmington, Milam said.
 
“There’s so many people coming from outside the market into our market,” he said. “Oftentimes, somebody will come in from another market, the Northeast or out West for example, and they are used to much higher prices and much higher taxes and sometimes it seems like they are willing to spend more money on multiple offers because it’s still considerably less than what they were paying in their previous market.”
 
The pandemic has played a role.
 
“There’s no question that COVID is driving people out of the larger cities and bringing them here, much more than in the past,” Milam said. “They just want to get out. They want to be in more of a rural area.”
 
According to the CFR release, the median price for a home increased 16.8% to $332,885 in April for single-family homes and 14% to $245,000 for townhouses and condos.
 
The price range with the quickest sales was the $150,000 to $300,000 range at 43 days, the release stated. Properties with the largest gain in sales were priced over $450,000, increasing 114.8%.
 
According to the release, inventory levels continue to decrease, dropping 71% in April this year compared to April 2020 to a record-low months’ supply of 0.7 for the region.
 
“This market is moving at lightning speed with homes receiving multiple offers within hours of entering the market,” said Tom Gale, CFR president, in the release.
 
New home numbers in the tri-county region also show an upward trend. In April 2021, there were 290 new home closings in New Hanover, Brunswick and Pender counties, compared to 215 in April 2020 and 175 in April 2019.
 
Brad Hunter, vice president and director of new homes for Coldwell Banker Sea Coast Advantage, said, “I think the lack of resale inventory will continue to help drive the new home inventory sales.”