Amid rough economic year, local residential real estate market had a red-hot 2020
The local residential real estate market soared this year despite the economic uncertainty caused by Covid-19. (Port City Daily / Johanna F. Still)
SOUTHEASTERN NC – Like every other industry this spring (except maybe Netflix), the residential real estate market took a hit when the pandemic hit.
Driven in part by the ability to operate within state restrictions that paralyzed other businesses, local real estate turned out to be near-inviolable by the end of the year, as if there was no pandemic at all (or, as some analysts speculate, Covid-inspired buying habits were actually selling Homes boosted).
Related: Market values remain stable, listings and pending sales decline in a new pandemic real estate market
Meanwhile, commercial real estate across the country has taken a hit, and investors and builders are reluctant to invest in new retail outlets as vacancy rates are still high.
According to CEO Cynthia Walsh of the Brunswick County Association of Realtors, total sales in Brunswick County this year increased 63% to $ 2.094 billion. “It’s the busiest thing I’ve ever seen, the agents and the members,” said Walsh. “They are just trying to keep up with the requests and the people who want to move here.”
In Brunswick County, units sold (approximately 6,000) are up 37% year over year. It’s even better than the pre-collapse high of ’05 when the total volume between roughly 4,500 transactions was $ 1.2 billion.
“It’s like nothing I’ve ever seen – and I’ve been here for 15 years,” she said.
Great growth in Braunschweig
The boom in Braunschweig is being stimulated by the persistently high growth rate. The county Fourth in the nation The percentage growth between 2017 and 2018 is 4.6% and should top the national rankings once the new estimates for the 2020 US census are available.
Even before the pandemic, retirees in the north were a big driver of the Brunswick housing market. This trend is likely to continue throughout the year, Walsh estimates, especially as urban dwellings become less attractive due to pandemic-induced shutdowns. Additionally, the rise of remote working opened up even more opportunities for buyers looking to move.
Walsh also suspects that the general sentimentality of such a serious event this year caused more buyers to take action. Perhaps the biggest boost to the industry – the part that Walsh said had to be said “out loud” – was record-low interest rates.
Just last week the 30-year fixed-rate average rate reached an all-time record low – According to Freddie Mac, this is the 16th time this year. At 2.66%, this metric is the lowest it has since started tracking rates in the 1970s.
“That’s also the piece that might get people to just say, ‘What the hell?’” Walsh said. “Look at these prices. We have never seen prices like this before. “
Welcome home millennials
Tom Gale, president of Cape Fear Realtors next year, also points to low lending rates, which are driving local and national demand. The new lows have motivated first-time buyers and other buyers to look for a change, Gale said.
For the past few years at least, Gale highlighted one unusual trend that will strike him in 2020: millennial homebuyers. Due to stagnating wages, rising student loan debt, and other unfavorable national trends, millennials have been largely financially withdrawn from the home ownership options afforded to earlier generations. Perhaps new interest rates mean access to bigger loans with less interest, which gives these buyers a chance.
“Millennials are the largest group of home buyers this year and are driving the competition for single-family homes,” said Gale.
In the three counties region (New Hanover, Brunswick and Pender counties) pending sales are up 22.1% year-to-date and closed sales are up 16.8% year over year, according to Gale.
Pending sales (-27%) and new listings (-35%) had a big impact on the April triangle numbers, showing shy buyers and sellers reluctant to enter into major deals at the height of national economic uncertainty.
Local demonstrations were never prohibited. As buyers, sellers, and agents regained confidence, both virtual and personal demonstrations increased. Last month, ads in the south increased 50% from November 2019 ShowingTime.
Gale attributes part of the boom in local industry to the agents’ tenacity to keep the business moving. “Our members have been doing virtual business quickly to protect themselves, their customers and the community,” he said.
Values rise, inventory squeezed
Early on, Gale’s predecessor, Tony Harrington, said the main concern he heard from buyers and agents regarding home values. This concern proved contentious.
The median sales price for single-family houses, townhouses and condominiums in the region with three counties has increased by about 12% since the beginning of the year compared to the previous year. The median sales price for a single family home is $ 305,000 per year ($ 329,000 last month) compared to $ 279,000 for the same period last year.
Increases in value can boost the local economy, but they also represent a larger, pre-existing problem, particularly in the Cape Fear region: the affordability of housing.
Appreciation squeezes the available inventory of homes below $ 300,000 or $ 250,000, creating a competitive and nearly untenable market for first-time buyers. Gale said earlier this year its members had addressed the issue of labor housing by serving on the county and city workforce advisory committee tasked with developing solutions to the region’s affordability crisis.
Related: A look at how Covid-19 is hitting the construction industry in the Wilmington area
“When is the average home selling price really going to be higher than what is affordable?” Asked Walsh. “Yes, we have a problem with the amount of affordable houses.”
Inventories below $ 250,000 are sparse – and it’s not just builders to blame, Walsh said. After the pandemic The cost of wood roseAccording to the National Association of Homebuilders, the price has more than doubled and the price of a new single family home has increased by an estimated $ 16,000.
“There aren’t many of them,” Walsh said of homes under $ 250,000. “In general.”
Send tips and comments to Johanna Ferebee Still at [email protected]