The Wilmington-area housing market experienced a slowdown in the number of homes sold as the Fed raised interest rates this year, but that doesn’t mean growth has stopped. Even with some market challenges, developers continue to plan and build single-family homes, apartments and townhomes in New Hanover, Brunswick and Pender counties as Realtors monitor the ups and downs. 

Price tags

Home prices remained on the rise in the Wilmington area as of February, even though the number of sales fell. 

In February, the median price for a home in New Hanover, Brunswick and Pender counties increased by about 15%, to more than $385,000, compared to the median amount during the same month in 2022 ($334,000). 

In a Feb. 9 report, the National Association of Realtors found that among the major U.S. regions, the South saw the largest share of single-family existing-home sales (45%) in the third quarter, with a year-over-year price appreciation of nearly 5%. 

But NAR chief economist Lawrence Yun said of the numbers, “Even with a projected reduction in home sales this year, prices are expected to remain stable in the vast majority of the markets due to extremely limited supply.”  

More inventory

Cameron Moore, executive officer of the Wilmington-Cape Fear Home Builders Association, said in a February interest rate discussion, “The good news is that we are starting to see some more inventory hit the market, especially on the resale side of things. Our overall pipeline of homes, particularly as builders start to move back to building specs, has and will continue to increase as well.”  

The increase might not be coming fast enough. The market is staying strong, said Steve Mitchell, president of the Cape Fear Realtors, in a February news release, but the biggest challenge continues to be the lack of inventory. 

He said 2023 will be a mixed market that will depend “on what happens with inventory, interest rates, the Federal Reserve and the bond market’s strength.”

Made of money

Moore said interest rates are not the only thing affecting the construction industry. 

Some materials and items are still harder to get than they used to be, and their prices have increased.

“Many of our builders continue to experience supply chain disruptions for electrical transformers, concrete, appliances, doors, windows and other building materials,” he said. “The one bright spot is lumber. During the post-pandemic boom, a surge in demand and insufficient lumber supply, combined with tariffs on Canadian lumber shipments into the United States, caused prices to soar as high as $1,500 per thousand board feet. As a result of the housing downturn, supply is no longer an issue for most builders, and the price of framing lumber has fallen below $400 per thousand board feet – back to pre-pandemic levels.”

Labor learning

Local homebuilders are pushing to get more people into the construction field and skilled trades. 

In one example, firms participated in a construction trades career fair at Cape Fear Community College’s North Campus in March. 

The effort is critical, builders say, to retain the ability to complete new homes.

“On the labor front, the number of open construction positions nationally was 388,000 in November 2022, and a focus on resolving this problem will be a key issue for the industry in the coming decade,” Moore said. 

He said the National Association of Home Builders “estimates that we will need 740,000 construction workers annually to account for industry expansion and industry retirements over the next three to five years.”  

Utility upgrades

Access to reliable water and sewer is necessary for residential real estate to grow and thrive, officials say. 

While hundreds of homes are planned in parts of unincorporated New Hanover County, infrastructure will be key. 

“We are still in the process of utility upgrades,” said Rebekah Roth, the county’s planning and land use director. “You won’t necessarily see something on the ground (for certain projects) right away because some of those utility upgrades will need to be made before projects are actually able to be completed.”

Neighboring counties also have their infrastructure projects in the works. 

Brunswick County deputy county manager Haynes Brigman said, “A lot of utility infrastructure work we’re planning for water and sewer replacement or expansion will open up further opportunity,” during a March discussion about growth in the county’s southern portion.