Real Estate Roundup 2010: The Year of the Deal

The threat of the foreclosure market accelerating and anxious sellers and buyers seeking the deal of a lifetime characterized the 2010 housing market here in Eastern North Carolina.

There were more foreclosures in 2010 thats no surprise but 29 percent more homes started the foreclosure process than the previous year with the tally ending at 1 894 properties for the year countywide. By comparison Brunswick finished with 1 723 and Pender logged a modest 524.

Wilmington Regional Association of Realtors 2010 Sales Person of the Year Michelle Clark of Intracoastal Realty whose team sold at least two foreclosures and eight short sales last year says “foreclosures and short sales are definitely affecting price. Sellers are competing with them now and sellers need to make their price more attractive in order to get a sale.”

The Broad View

The good news is that New Hanover County finished up 5.6 percent in overall dollar volume for 2010 with Realtor-assisted sales closing out more than $698 million in real estate for the year.

The number of residential properties sold also increased finishing the year at 2 662 an increase of 5.8 percent with 230 additional properties waiting to close in 2011.

Realtor-assisted short sales accounted for 177 of these sales; Wrightsville and Landfall are credited with six short sales each Porters Neck with two Figure Eight none and Pleasure Island closed out the year with 36.

Intracoastal Realty Broker in Charge Chris Livengood notes that 20 percent of all Realtor-assisted sales in the county were either short sales or foreclosures. “Thats one in five properties in those two categories ” he says.

As the housing market struggles to stabilize both nationally and locally the most acute challenge will come from the expected flood in foreclosures. Estimates call for foreclosures to rise to new highs again this year. When the largest banks suspended foreclosure proceedings in October the number of foreclosures went down 21 percent when compared to the same period the previous year.

Just before the suspension hit foreclosures were at an all-time high for the month of September. The freeze created a backlog which led to artificially low end-of-the-year numbers. Analysts expect things to get moving again in the first quarter of 2011. Coupled with that is the expected increase of the number of homes moving into foreclosure.

Regardless many area Brokers feel in the years to come that buyers will look back on 2010 as the year of the deal. Randy Williams of Team Hardee Hunt and Williams describes it succinctly. “It was a year of sobriety for sellers ” he says.

Of the top 12 sales in the county four were at Wrightsville. Landfall saw three and Figure Eight Island racked up four including the top sale in the county a $4 million deal at 312 Beach Road North a 7 000 square foot home that features 3 000 square feet of outdoor waterfront living space and six bedrooms. The second top spot also went to Figure Eight with a $3 495 000 sale of a Ligon Flynn design at 47 Pipers Neck Road.

Landfall

Pleasure Island (Carolina & Kure beaches)

Pleasure Island posted higher numbers for the year with almost a 17 percent increase in units sold to finish out the year with 336 sales and 19 pending. Overall sold volume came close to increasing 10 percent but the dual community island also saw a significant number of foreclosures as well as a steady stream of short sales. The average sales price was down 6 percent to $278 706. The median sales price was also down 3.8 percent.

Wrightsville [Digging Deeper]

Wrightsville did not fare so well finishing the year with a sales volume of just more than $50 million a 23 percent decrease from the previous year. Available inventory dropped marginally to 160 but agents say approximately 40 properties expired off the active rolls at years end.

Wrightsville saw 14 percent fewer number of sales in 2010 and it saw deep cuts in home town house and condo prices. The good news was that sales were being made but except for a few notable exceptions sellers were taking less than they wanted in order to achieve a sale. The average sale price was down 8.6 percent however the median sales price climbed 7.38 percent.

Thirty-nine percent of Wrightsvilles 69 residential sales in 2009 were $1 million or more. In 2010 just 16 properties were $1 million or more. Of these 10 were soundfront and three were oceanfront.

Just three homes sold for $2 million or more. Of these two were oceanfront and the third was 2 Cowrie Lane the spectacular oceanside coastal vernacular design that offered close to 5 000 square feet indoors and 2 200 square feet of outdoor space with strong ocean views located in a neighborhood with some of the largest lots on the island all staggered for maximum views.

Twenty-two single family homes sold. Of these the best buy in a higher-end home was the four bedroom five bath home located at 219 Seacrest Drive across the street from Motts Channel with access to a boat slip rental which was purchased in December by a doctor who was relocating. “It was not a short sale but the sellers were ready to sell it ” listing agent Michelle Clark says. “That was an amazing price for such a great house one back from the water.”

Loaded with sought-after features the home sold for only 67 percent of its list price. At 4 770 heated square feet that was a value-packed $167 per square foot purchase.

Another good buy was 6 Myrtle Court a short sale that sold at $925 000 $282 per square foot. Built in 2006 this four bedroom five bath house also was constructed with all the latest must-haves but sold for 71 percent of its list price.

The entry level price point was again on South Harbor Island the modest 1 300 square foot single-story home at 107 Live Oak Drive. With three bedrooms and one bath the home sold for $416 000 in May.

The highest sales price paid for a Wrightsville property was $2.7 million which equaled $592 per square foot. This top-dollar sales price was down 16 percent from 2009. The house 807 South Lumina Avenue a traditional cedar-shingled oceanfront home on the desirable south end sold in February. The classic 1996 five bedroom and six bath cottage is described by listing agent Lee Crouch of Intracoastal Realty as a great buy. “That house appraised for almost $4 million three years ago.” Of the reduction in high-dollar sales at Wrightsville several factors are at play Crouch says. “I think buyers are looking for values and they are getting them. The other thing if someone will spend $4 million they want a huge house. I sold one at Figure Eight for $4 million but in its day it would have been $6 million.” Lee Crouch notes the third contributing factor of cash flow: the increased amount of the purchase required by lenders to be buyer funds.

The top price based on dollars per square foot was 302 Water Street which sold for $1 450 000 in late August which was $689 per square foot. The sales price on this western-facing deepwater soundfront home on a bulkheaded lot on Banks Channel on the desirable south end was 55 percent lower than its original list price of $3 250 000.

Additionally four properties were under contract pending closing at years end: 10 Marina Street Unit A6 Shell Island Unit 913 and single family homes at 21 Shore Drive and
5 Bermuda Drive.

Two short sales in neighboring properties located near the Coast Guard station paint a picture of one aspect of what is occurring in the market. Schloss Street had four Realtor-assisted sales two of which were short sales and at least one private-party sale.

Schloss sits one street back from the waterfront between South Lumina Avenue and Water Street. It is a desirable location off the main traffic arteries. Nos. 743 and 741 Schloss next door to each other were built in 2006 by developers from Raleigh who are friends. Built at the same time each has five bedrooms and four and a half bathrooms. Due to the downturn in the economy both sellers ended up working out short sales at a price within $5 000 of each other. The smaller 741 Schloss Street sold for $960 000 to a doctor from the Raleigh area. The buyers of 743 are from South Lake Texas looking ahead to retirement.

“Tax values are holding at Wrightsville Beach maybe 5 percent off the tax values but there are affluent people purchasing property there ” says Don Harris of Century 21 Brock & Associates who sold 741 Schloss Street. “Countywide you can average 15-20 percent less than tax value but not Wrightsville Beach.” Intracoastal Realtys Debbie Mitchell the listing agent on that property sale disagrees. “I dont think you can make a general statement like that about values ” she says. “Ive never thought it was an indicator of value. For example they assessed all of the waterfront lots at Wrightsville at the same value regardless of boating access.”

She refers to a common mistake tax assessors and appraisers make at Wrightsville in valuing boat dockage regardless of access or depth of water at the dock. They incorrectly value those properties that have dockage for smaller boats the same as those not restricted by the Banks Channel fixed bridges or others where vessels must come under the drawbridge and a long way around to gain access to Masonboro Inlet and the ocean.

Just one lot sold but it was a top-dollar sale on a bulkheaded waterfront west-facing lot on Island Drive with deepwater access for large sail or power craft and unencumbered ocean or Intracoastal Waterway access. It sold for $1.65 million and a new second home was under construction on the lot in January 2010.

One lot sale was pending as the year turned over 303 North Channel Drive. Purchase of the lot included plans for a 3 100 square foot home.

Wrightsville again saw three fractional 1/10 ownership sales at the following locations: two at Sea Oats on North Lumina Avenue and 14B E. Shearwater Street. And while these low purchase prices skew the overall numbers for Wrightsville they actually boost the number of sales by three. Factoring these sales out of the year end statistics leaves an average sold price of $901 673 and a median sales price of $810 000.

Condo Sales

Planned developments

Station One 3 sales

Three bedroom Unit 6A sold for $822 500 in June

Three bedroom Unit 2A sold for $750 000 in March

Two bedroom Unit 4D sold for $600 000 in June

Islander 1 sale

Unit 2D a two bedroom two bath sold for $595 000 in March

Duneridge Resort 4 sales

Unit 2203 the least expensive sold last at $700 000 in August

Unit 1405 sold for $820 000 in April

Unit 1305 sold for $825 000 in May

Unit 1403 sold in December 2010 at $845 000 for the best price in Duneridge

Shell Island 5 sales

Unit 404 lowest price sold for $204 000 in February

Unit 901 highest price north corner overlooking bird sanctuary and toward inlet and Figure Eight sold for $315 000 in January

Wrightsville Dunes 3 sales

Unit 2D Building A was the top sale for this oceanfront sterling edition that sold for an even $1 million in June

Unit 3C Building F sold in July at $800 000

Unit 2C Building D oceanfront sold in March for $675 000

Channel Walk 4 sales

101 Driftwood Court a 2/2 interior rental unit sold for $260 000 in October

158 Driftwood Court an end unit sold in June for $320 000

123 Seaside Lane went for $850 000 (soundfront with 35-foot boat slip) in July

110 Seaside Lane (soundfront with a 35-foot boat slip) was the top sale at a price of $1 085 000 and sold in February

There were 12 sales of townhouses not in a planned development. Of these four were new construction and saw the developer take deeps cuts in what they had been asking.

Top price per square foot for townhouse units went to the new construction (2007) oceanfront side-by-side duplex at 547 South Lumina Avenue. Unit A sold in July for an even $2 million and was also the top price $730 per square foot in a townhouse.

The best value in a townhouse was $312 per square foot for a five-year-old townhouse at 1303B North Lumina Avenue which sold for $595 000 on December 10.

Wrightsville sales by quarter: First quarter saw 11 sales while the previous year started off stronger with 14. The second quarter of 2010 closely mirrored 2009 with just one less at 17. The third quarter slumped with just 14 sold as compared to 2009s encouraging 26. Then the fourth quarter rallied with 18 properties sold as opposed to the 2009 final quarter count of 13.

The mood in area real estate firms is described as hopeful says Michelle Clark. “I think everything is recovering.”

Agents acknowledge that buyers are waiting in the wings for the bottom to be reached.

“In Wilmington I think were finally at the bottom. At Wrightsville Beach I think were finding the bottom ” Clark says.

Randy Williams agrees “Were hoping to stop the bleeding and reach the bottom ” he says. Williams feels some of the macro markets at Wrightsville like the condo market may have hit bottom pointing to the million-dollar sale at Wrightsville Dunes.

Lee Crouch says “I have several buyers out there but they are waiting for a deal.” “Thats why people are buying ” Debbie Mitchell says. “If they can get a really good deal they feel like they dont have to worry about the market dropping further.”

Buyer Profiles
by Patricia E. Matson And Pat Bradford

Year-round Wrightsville Beach residents will remain in the minority as most of those buying houses in 2010 were people seeking vacation and investment homes. Just eight were purchased for year-round residential use; of these four made the move from being second or investment homes to primary residences. Two homes from the new construction boom that were still standing empty were also purchased for use as primary residences. And while two additional sold but remained primary homes four primary residences were purchased for second-home use bringing the over-all net gain of primary residences in the town to six.

“About 75 percent of what we handle are secondary homes ” says Randy Williams at Hardee Hunt and Williams. He adds that about 80 percent of the buyers his team worked with were already from North Carolina.

Those numbers hold true for the beach with 81 percent of the sales having buyers hailing from in-state. A modest 19 percent were from New Hanover County of which 4 percent were already Wrightsville Beach property owners or residents.

Other buyers came from across the country with one buyer each from California Texas the Midwest Tennessee Virginia Boston New York Maryland Connecticut and Washington D.C. and two from Atlanta.

Those new property owners coming from other North Carolina towns and cities included two each from Fayetteville Wilson Greensboro and Charlotte and one each from Lumberton Clinton Burlington Franklin Winston-Salem and Banner Elk. The predominant buyers of Wrightsville Beach properties were from the Raleigh and the Triangle area (38 percent).

Wrightsville gained an impressive collection of new property owners; two are engineers four are described by agents as retirees three are attorneys four hail from banking and the world of finance six from the medical profession one hails from NASA one from Fuji and another is a nuclear consultant. Trucking and industrial construction are represented as well as manufacturing and large-scale farming operations. The remainder with a few notable exceptions tended to be business professionals or entrepreneurs. One comes from telecommunications and one from textiles. And despite the recession one was a real estate appraiser. And one a real estate developer. And another is a religious professional and even one a media publisher.

At Landfall the picture differs somewhat. Allison Bernhart of Landfall Realty says about 90 percent of recent house purchases were primary homes either relocations or people moving from within Wilmington mostly for purchases between $500 000 and $650 000. About half the buyers were retirees she adds and the other half were people working in the community like the university or hospital.

Although some of the top home sales in the region for the last year have been on Figure Eight Island that doesnt mean crowds of people are rushing to move there.

“Its been a slow year like everybody else ” says Judy Parlatore of Figure Eight Realty. She adds that prices have fallen along with volume. She says most of the houses purchased on Figure Eight will be used for second homes or vacation homes. Most of the buyers are from North Carolina and have come to the island because of referrals from friends who already own property there.