Home prices in the Cape Fear region are again on the rise. Sales were steady through 2013.
Sales of residential property in New Hanover County accounted for more than $1 billion in property changing hands, up 15 percent over 2012. These figures reflect a 49.5 percent increase in sales volume over the dismal countywide postings for 2011.
It was a good year, says Vance Young of Intracoastal Realty, who was ranked No. 1 in the county with a combined sales and list total of 96, for a total of $58 million in sold property in New Hanover County.
I am delighted that things are trending in the right direction, finally. The market peaked in 05-06, it fell in 07 and crashed in 08 and really didn t bottom out until the fourth quarter of probably 11. 2012 was a bottoming recovery and in 13 it started to turn up, Vance Young says.
Two companies vied for the top bragging rights: highest sold volume went to Intracoastal Realty with $554 million, representing 1,631 units reported in Realtor list and sold volume; while Coldwell Banker Sea Coast nailed down more units sold, but less overall dollar volume. Sea Coast posted 1,721 units in sold and listed transactions combined for a volume of $396 million.
I would say the primary home market has really recovered very nicely, Vance Young says. The second home market is still lagging behind. I wouldnt say we are in a good rhythm yet with regard to the second home buyer.
Top 12 Home Sales & Figure Eight Island
Of the top 12 home sales in New Hanover County, five were located on private Figure Eight Island. Just three were on Wrightsville and two in the gated Landfall community; No.6 was in Cedar Landing, while No.12 was in Marsh Landing.
The top sales prices moved a step closer to the pre-recession bust with a 37 percent increase over 2012 for the top sale in the county, which was Figure Eight Island s dazzling 25 Backfin Point, which sold in one day. This incredible soundfront property is a compound consisting of a 7,600sf main house, with six bedrooms, six and one-half baths plus two detached guesthouses. With both ocean and sound views and a private pier with lift and floating dock, this uniquely special property sold for $4.375 million in May.
Listing and selling agent on 25 Backfin Point was Buzzy Northern, a 28-year, Figure Eight second home owner on who just came onto the local real estate scene last year with Intracoastal Realty. Ranked No. 13 in the county, Buzzy Northern is credited with seven sales for a list and sale volume of $18.5 million.
He was also the listing agent on Bayberry Place. It sold for $4.150 million, making it the second top sale in the county. MLS records show it was on the market for just 57 days.
The twist to the story is the buyers of 25 Backfin Point were the sellers of 10 Bayberry Place, who relocated from the oceanfront to the soundfront. They purchased the Backfin Point home after selling Bayberry Place, a 5,599sf oceanfront, seven-bedroom, six and one-half bath main house complete with one guest cottage.
Selling agent Jim Hardee of Team Hardee Hunt and Williams describes his Bayberry Place sale to a Research Triangle Park executive and his wife. He says the reason the couple chose Figure Eight is, Because over the course of working together for five plus years they had narrowed down their search to Figure Eight. They had even pointed out this house as an example of something they would be interested in.
The 2012 top sale in the county was the four-bedroom, six-bath oceanfront home at 204 Beach Road South, which sold for $3.2 million.
Figure Eight Island should never sell at a discount to Wrightsville Beach or Topsail, which it has for the last couple of years. I feel strongly that those days are almost over, Buzzy Northern says.
2013 was a good market for Figure Eight, Jim Hardee says. I think there were double the number of houses over $2 million that sold in 2013 over 2012. We definitely saw an increase in the high-end market in 2013. Of course, Figure Eight has a high percentage of those properties. I think that was pretty indicative across the county; there was more interest in the million and up type price range than the previous years.
Waterfront, water view and pier/dockage continue to be a draw. It is not surprising that each of these top 12 sales was waterfront.
Jessica Edwards, Coldwell Banker Sea Coast Broker, is ranked No. 11 in the county, with 54 sales, and a combined list and sold volume of $20.3 million for New Hanover County. When you look at the market overall, the most attractive things that are going to sell faster and sell above other things are going to be the ones with water features just because we have such great water features, whether it is Intracoastal Waterway, or marsh, or ocean, everybody is always looking for the view, she says. The view can vary dramatically, but I think with there still being enough inventory out there, definitely, typically those are the things people are going to gravitate to first, over something without a view.
The year saw 19 sales of homes and lots at Figure Eight Island up from 14 the previous year for a more than a $17 million increase in sold volume, up 83 percent. The number of sales increased 36 percent.
Judy Palatore, Broker at the on-island Figure Eight Island Realty, says, The market on Figure Eight Island continued to grow and improve. Not only did we see more transactions, but also an increase in average sales price.
The number of days it took to sell a property also indicates a continued reversal of the negative trend that was ushered in with the recession. Average days on market, DOM, in New Hanover County dropped to 153, a 15-percent decrease.
Intracoastal s Debbie Mitchell, who ranked No. 5 in the county with 64 total sales and a combined sold volume of $32.7 million, says, Consumer confidence was good. People are feeling more comfortable with purchasing.
Overall, the county saw an increase of just 5.4 percent in number of properties sold.
However, only Figure Eight and Landfall, both private access communities, saw an increase in the number of properties sold, a 36-percent increase for the former, while a more modest 10-percent increase was seen at Landfall.
The remaining communities saw a decrease in the number of properties sold: Wrightsville decreased 14 percent, Pleasure Island 6 percent, and Porters Neck 16 percent. Realtors credit this to declining inventory.
Inventory, the availability or lack of it, played a substantial part in the 2013 Wrightsville Beach sales picture, Realtors say.
Debbie Mitchell is also ranked No. 2 at Wrightsville Beach, selling 12 properties for a combined volume of $9 million at Wrightsville. The inventory presented a little bit of a problem, she says. We didn t have as much inventory as the year was progressing out of the downturn. A lot of the backlog of inventory started selling, then, the beach didn t have as much inventory. It wasn t that we didn t have buyers, but we didn t have the inventory to sell to some of the buyers, she says.
Declining inventory creates momentum for prices to increase.
Jessica Edwards says, I think it was good, with inventory being low, and hopefully inventory will continue to be low, that is really driving the market right now in Wilmington. We are still dealing with foreclosures and short sales here and there, so because of that, prices can t really climb, but if inventory continues to stay at low enough levels, and activity continues to stay up, in my opinion, that is going to have the biggest impact on strength in the market.
Everybody always talks about interest rates, and stuff like that, but really, I feel like it comes down to inventory, what inventory is out there, how much of it in combination with the activity that makes such a bigger impact, she says.
There are not that many single- family houses for sale. Not that much oceanfront. If you wanted a nice house that was newer, there might have been one or two to choose from, Debbie Mitchell says.
What we saw in 2012 was the return of the primary (residence) buyer up to about $500,000, Vance Young says. This past year we had primary (residence) buyers up to about $1 million. So it is definitely trending in the right direction. The properties over $1 million are still very slow and there is a disproportionate amount of supply to demand, we dont yet have the demand to match that over million supply on the primary end.
Intracoastals Bobby Brandon is ranked No. 6 at Wrightsville Beach in sales, having five sales for a combined sales volume of $7.3 million. He says, The mid stuff, the 5-, 6- and $700,000s, single family homes, it was a hot button. Those houses, at one time, back in the day, were million dollar houses, in 2005 and 06. Then all of a sudden they were down to mid $6s, $6-$700,000. That s a whole lot more affordable than a million. They sold pretty quick.
Whereas the high-end stuff, $2 million and up, it didn t go quite as good as what we had hoped. I think that was a result of the economy, the uncertainty, he says.
In the $1 million or more category at Wrightsville Beach, 22 of Wrightsville s 111 sales, 20 percent, were $1 million or more; three were $2 million and over.
The town of Wrightsville Beach
There were 34 single-family homes sold in the town of Wrightsville Beach in 2013. Of these, 23 single-family homes sold on Wrightsville Beach itself; they ranged in price from $557,500 to $2.125 million.
The lowest price paid on the island of Wrightsville Beach was for a classic 1965 cottage at 200 North Lumina Avenue, just 1,102sf, which sold in May for $557,500.
Of the 23 single-family homes on Wrightsville, nine of them were soundfront with boat dockage; more than five of these were deep water with unobstructed access dockage.
A unique sale and the oldest property sold, built in 1910, was 506 South Lumina Avenue, the former Star of the Sea Hospital, which sold in November for $1.475 million. The home sits on approximately one-fourth acre in what is known as the Sprunt compound, and has an undivided interest in a 65-foot wide soundfront lot and two deep-water boat docks across Waynick Boulevard, which made it a prime target for investment and tear down, and even though this purchase brought the property back into the Sprunt family, by all appearances it is about to be demolished.
Included in the overall total, 10 single-family homes were sold on Harbor Island, ranging in price from $355,000 to $1.9 million. The entry level price point, a 768sf home, built in 1957, features two bedrooms, one and one-half baths on a lot with mature trees: 305 North Channel Drive, which sold in April. At the other end of the spectrum, the top single-family sale, 205 South Channel Drive, sold in September.
Randall J. Williams, Broker on Team Hardee, Hunt and Williams says, The beach market was just a little off, compared to 2012. Foreclosures and short sales were not the driving factor in 2013, however we were not immune to a few lingering foreclosures that had some influence on values.
There were just 963 foreclosure filings throughout the countywide system in 2013, a 34-percent decrease from 2012. This is the lowest number of filings since 2007, which saw 720.
There was a notable increase in construction on the island in general and at least one high-end spec house being started. That is refreshing considering the dearth of that particular segment of the market during the recession, Randall J. Williams says.
The Incredible Duplex
Wrightsville Beach saw 14 duplex sales ranging in price from a modest $550,000 for the grandfathered, side-by-side, 1974 duplex at 12 Bahama Drive, all the way to the more than $2 million 547B South Lumina Drive, a five bedroom, five and one-half bath oceanfront unit on the south end, built in 2006. This duplex unit was one of the top 12 sales in the county.
Eight Wrightsville Beach duplex units sold between $1 million and slightly more than $2 million.
Three duplex units sold on Harbor Island, notable in that all three were on the Causeway, which traditionally sees few sales. All were waterfront with boatdocks. 312A Causeway Drive, built in 2005, a three bedroom, two and one-half bath with just 1,500sf, sold in April for $800,000, it offered an 18-foot boat slip. Then 428B Causeway Drive, with 2,100sf sold in May for $1.075 million. It features a 28-foot boat slip. Selling on the same day was 316B Causeway Drive, also a four bedroom, two and one-half bath and 2,000sf, which sold for $1.150 million.
All total, there were seven sales on the Causeway in 2013.
Primary vs. Other
Wrightsville saw a net loss of eight year-round homes to second home, rental or investment uses, excluding duplexes and condos. The seven purchasers of year-round homes moving to second home use hail from Wilmington, Raleigh, Charlotte, Winston-Salem and Chicago/Palm Beach.
One second home moved to year round: This was the $636,000 sale at 20 Palmetto Drive to a University of North Carolina Wilmington grad for a primary residence sale in May.
Harbor Island, with ten single family home sales (excluding duplexes and condos), saw a net loss of two year-round homeownerships, which went to investment; another year-round residence was torn down to build a spec house, the Johnson home, built in 1954, at 112 North Channel Drive, on a 75-foot wide waterfront lot, which sold for $950,000.
Two went from second home to year round, although one of these will be torn down and a new year-round home built.
Vance Young was also ranked No. 4 in sales at Wrightsville Beach, with seven sales for a total combined sold volume of $7.77 million. He says, The second home buyer has not returned just because the economy is not there yet, people don t have the disposable income and second-home properties are still a luxury and an expensive luxury. You throw on top of that the cost of rising insurance, wind and hail, and now this flood debacle, and it is cause for concern, particularly on the second-home market.
There were six lot sales at Wrightsville Beach, including the sale of No. 5 Auditorium Circle, which sold for $795,400, one of three lot sales in this three-lot waterfront Banks Channel subdivision. All three bulk-headed lots are Banks Channel waterfront with deep-water dockage on land once occupied by the LaQue Center. These bank-owned lots sold post foreclosure.
Three other lots sold ranging in price from $340,000 to $575,000.
There are 1,650 completed homes in Landfall. Alison Bernhart, Broker at Landfall Realty, says of the market there, It is good news, it is really good news. Alison Bernhart is ranked No. 15 in New Hanover County with 29 sales for a combined sales volume of $17.7 million.
The real news is in the houses sold. Last year we sold 126 houses, the year before we sold only 86. In the over $1 million category, there were 15 sold. It is just a phenomenal recovery, she says.
The average sales price was $665,000. Price range, low to high, was $300,000 to $2.585 million.
Another thing that happened in Landfall, the inventory is very, very low, Alison Bernhart says. The number of lots on the market is 46; there have been as many as 100, years ago. Homes on the market right now are 103, and we have been as high as 160.
Bruce R. Koch, Broker with Porters Neck Co., is credited with 40 sales, with a volume of $14.8 million.
He says, It was a little better than the year before, we didn t have the same extreme dip in years before as some of the other communities, so we didn t have as far to come back up. What we are having is more people building homes.
We always get a number of people from Landfall coming over here. They will sell their house over there for $950,000 and come over here and buy for $385,000. Most of our people are from Northern Virginia on up the Eastern Seaboard, and then around the Midwest, Chicago, also from Southern California, just coming back to the East Coast. Some of them have a connection, their kids live in Landfall so they decided to move back East, Bruce Koch says.
Pleasure Island, The Towns of Kure and Carolina Beaches
Justin Donaton of Coastwalk Real Estate is credited with 68 sales on Pleasure Island, having a combined sold volume of just less than $21.4 million.
He says of the market there, It was a very strong year. Prices stopped dropping and in a lot of cases started their upward trend again. We have a lot of cash buyers, a lot of buyers from the Research Triangle Park area buying second homes, and then a lot of people from the Mid-Atlantic and Northeast that are purchasing retirement homes.
What is interesting, too, is we have seen a nice crop of buyers in the lower-priced single family homes, in the under $300,000, that are actually moving down from Wilmington. I think they have seen the drop in values as an opportunity to buy a beach home. From the Wilmington area, some younger families that like the school down here take advantage of the lower pricing and relocate full time, Justin Donaton says.
We are seeing a husband and wife; they got married at 25, bought a house or a condo somewhere in Wilmington. They sold it for $200,000 and then they are coming down here buying a four-bedroom, three-bath, 1975 ranch for $300,000, but it is like, Hey, I am at the beach. They like their flip-flops. The condos and duplexes, a lot of those people, it is your stereotypical middle-aged family from Raleigh with their golden retriever and their white picket fence and two kids that play soccer. And they want to be close to the beach, that is why they are buying. When you get into the upper echelon of properties, it is not the Wilmington family, not the RTP, it is Northeast money coming down here to buy their retirement home. We sold a $1.7 million house to a guy who lives in China, his son and daughter live in Charlotte and he is a banker in China and he wanted a beach house for his kids.
Chris Livengood, Intracoastal Realty Corporation Vice President of Sales, sums up the area real estate market: 2013 represented a good recovery year for our market place, by my measure the fifth best year in history, he says. Volume grew to the highest level since 2008. Interest rates continue at near-historic lows. The inventory of distressed properties (short sales and foreclosures) decreased. The total market inventory shrunk to a six-to-seven months of supply level with pockets of real estate beginning to show modest price increases as a result.
Comment on Biggert-Waters
FLOOD INSURANCE REFORM ACT
From Randall J. Williams, Team Hardee Hunt and Williams
going into 2014, we in the real estate industry as well as the beach community as a whole, are keenly concerned about the unintended consequences of the 2012 Biggert-Waters Act. Despite pending legislation to mitigate the looming damage to real estate affected by this legislation, to a large extent, from a public perception standpoint, the damage has already been inflicted. I would caution all Realtors, insurance agents and the media to be very careful not to inadvertently disseminate any misinformation to the buying and selling public regarding rate increases. My concern is the uncertainty could be more damaging than the reality of the eventual rate increases. I suspect that the very high-end market, which our clientele frequently buys without a primary mortgage, will drop federal flood completely, once they realize that the premiums they pay are completely out of proportion with any potential claim they might benefit from. These clients are savvy about risk. What sense does it make to pay exorbitant premiums on a policy that will only pay $250,000 on a house worth several million dollars, and then only if the house is swept away by rising water, a very unlikely event based on modern building codes as evidenced by the very real experience we have had with the multiple hurricanes we have endured. A careful reading of a current flood policy will reveal that you are very unlikely to ever be paid a claim on any portion of your home that actually gets wet in a storm, because except for pre FIRM policies, NFIP will not pay for water damage below the elevation of the first floor living space that was mandated by building code at the time of construction. Buying opportunities await the well informed. As with any market uncertainty, I suspect the scared will sell, and the bold will buy.
Intracoastals Debbie Mitchell says, The average person just doesnt understand.
Fellow agent Vance Young, referring to Biggert-Waters flood insurance, says, The unknown creates fear. It is almost worse, I almost wish they would go ahead and enact the thing so people knew what the answers were and then you take the next step and petition Congress to get the pendulum back in the middle.