Lots on the Brunswick market indicate stabilization of land market

The N.C. 211 corridor in Brunswick County was arguably ground zero for the housing bust that ravaged the Wilmington area. The 15-mile stretch from U.S. 17 to Southport is lined with zombie developments – partially finished subdivisions, some with large tracts of vacant lots or raw land. No one is saying a building boom is coming back there any time soon, but a local commercial real estate firm has more than 1,600 lots under contract along the highway that may take a large chunk out of the N.C. 211 inventory and help stabilize the Brunswick County land market. "It's such a large portfolio of lots that we did see interest from large investment funds, national builders, regional builders and also saw a lot of interest from smaller private equity funds," said Brian Eckel, principal at Cape Fear Commercial, who along with Paul Loukas and Hank Miller listed the bank-owned properties. Off the market And even though sale of the land may not result in immediate construction, "any time lots are transferred away from a bank to an entity that has the ability and the specific business plan to hold the lots off the market until the market is ready to re-absorb them is extremely positive news for the entire real estate and construction industry," Eckel said. Six subdivisions are under contract along N.C. 211 – Richmond Hills, Old Georgetown, Mill Creek Cove, Brookstone, Rivergate and Sandstone. Mill Creek Cove is complete with clubhouse and swimming pool, Eckel said. Some of the other subdivisions are partially completed, while others are merely lots, he said. Less inventory means that the market is stabilizing. Northern Brunswick County, particularly the Leland market, has been attracting buyers willing to go into subdivisions and complete promised amenities such as clubhouses and pools, real estate experts said. D.R. Horton, the nation's largest home builder, recently bought the bankrupt Hawkeswater subdivision adjacent to Belville Elementary School for $5.5 million. Horton is said to be searching for others and has already purchased lots in subdivisions in New Hanover. Pent-up demand What's helping the market for lots in the Wilmington area in general is "is the pent-up demand for new construction housing here and across the country," said Pete Frandano, a commercial real estate broker with Southport Realty and a former president of the Brunswick County Association of Realtors. "It makes sense again to build because the costs of the lots have come down," Frandano said. Lots in the wooded section of Oak Island, for instance, were in the low $200,000s at the height of the real estate boom and now they are at $25,000 to $35,000, he said. Still, Brunswick is awash in lots and vacant land purchased in the middle of the last decade for prices that even then were inflated. Five years' worth In January 2012 there were 65 months of lot inventory in Brunswick County, said Steve Candler, CEO of the Brunswick Realtors. In January 2013, it still was nearly five years' worth. That means that it would take about five years to sell the lot inventory at the current sales pace. And that's just the number of lots on the multiple listing service. Frandano ventured a guess that the number of bank-owned lots in Brunswick that are not being presented for sale are double those that are listed, though he added that "if you polled 10 commercial brokers you would get 10 fairly wide-ranging answers." "Some lots were priced at $60,000 and are going to be picked up in bulk transfers at $5,000 to $10,000," said Hector Ingram, of Ingram & Co. appraisal firm in Wilmington. Attracting builders Builders and developers are being drawn to land now because of the low lot prices they can build for the current market, Ingram said. If you can sell only $250,000 houses, the maximum a builder should pay for a lot is $45,000. That means the profit is much bigger if the lots can be bought for less, Ingram said. Interest from builders and investment funds is certainly not limited to Brunswick County. Pender and New Hanover counties also are participating and New Hanover is just about recovered from the land bust as developers are now buying vacant land not yet divided into lots, Eckel said. "For all three counties, I've watched the market fall since September 2008 in lots and subdivisions," he said. "Since September 2012, I can see that the market was stabilized and prices have started to slowly increase for the first time in four years." Original Article Ken Keegan Real Estate Broker

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Housing market signals its recovery is going strong

Two pieces of data released Tuesday show that the recovery in real estate continues to be a bright spot in the still somewhat sluggish economic rebound. New-home sales leaped in January versus the previous month to the highest level in 4-1/2 years, government data showed, as steady job creation and record-low interest rates spurred buying. In the meantime, single-family home prices picked up in December, closing out 2012 with the biggest yearly gain in more than six years, a closely watched survey showed on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent in December on a seasonally adjusted basis, topping expectations for a gain of 0.5 percent. On a non-adjusted basis, prices were up 0.2 percent. "Home prices ended 2012 with solid gains," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. "Housing and residential construction (led) the economy in the 2012 fourth quarter." Prices in the 20 cities jumped 6.8 percent year-over-year, ahead of expectations for 6.6 percent and the best yearly gain since July 2006. For the final quarter of the year, prices gained 2 percent on a seasonally adjusted basis. The Commerce Department said Tuesday that new-home sales rose nearly 16 percent in January to a seasonally adjusted annual rate of 437,000. The percentage increase was the largest in nearly 20 years. And December's sales were revised higher to 378,000 from 369,000. The number of previously occupied homes for sale is at a 13-year low. That shortage creates more demand for new homes. Builders began construction on the most homes in four years last year. Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders The increase in home building has helped boost construction hiring. The industry has gained 98,000 jobs since September, the best stretch since the spring of 2006. Still, the increases in new-home sales are coming from depressed levels. Sales plummeted to a record low in 2011. And sales are still well below the 700,000 annual level that economists consider healthy. Original Article Ken Keegan Real Estate Broker

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Housing to drive economic growth (finally!)

From CNN: The bursting of the housing bubble plunged the economy into a recession from which it has yet to fully recover. But economists say this could finally be the year that housing lifts us out of the doldrums. Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. The rest were split fairly evenly between consumer spending, increased domestic energy production and stimulus from the Federal Reserve as major growth drivers. "Homebuilding activity will likely remain the strongest growing component of the economy in 2013," said Keith Hembre, chief economist of Nuveen Asset Management. "After several years of excess supply, demand and supply conditions are now in much better balance." Home sales rebounded to the strongest level in five years in 2012, as home building bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market. The economists surveyed also forecast that there will be just under 1 million housing starts this year -- roughly matching the 28% rise in home building in 2012. Moody's Analytics is forecasting much stronger growth -- a 50% rise both this year and next year, which it estimates will create more than 1 million new jobs. "There's a lot of pent-up demand for housing, and very little supply," said Celia Chen, housing economist for Moody's Analytics. "As demand continues to improve, home builders have nothing to sell. They'll have to build." She said that growth in building will mean adding not just construction jobs, but also manufacturing jobs building the appliances and furniture needed in the new homes, which in turn drives overall consumption higher. And economists say the tight supply and renewed demand for housing should lead to higher home values -- about a 3.7% increase according to the survey. "One of the most significant indirect effects from the housing recovery is the 'wealth effect' on consumers due to the recovery in home prices," said Joseph LaVorgna, chief U.S. economist of Deutsche Bank, who said better home values can affect both consumer psychology on spending as well as their actual finances. "Even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets," he said. Ken Keegan Real Estate Broker

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Home building surges 12%

From CNN: The pace of home building surged in December, as the market bounced back from the impact of Superstorm Sandy. Builders started construction at an annual pace of 954,000 home last month, the Census Bureau reported, up more than 12% from November's pace. That's a nearly 37% leap from December of last year. The reading smashed the 889,000 that economists surveyed by Briefing.com were expecting. The Northeast saw a 19% increase in housing starts from November to December, as construction picked back up again after the storm put a halt to new building activity. Single-family housing starts also boosted December's strong reading, rising more than 8% from November. Applications for new building permits, which are seen as an indicator of builders' confidence in the market, were little changed from November's rate. But the annual rate of 903,000 reported in December is up 28.8% from last year's level. Thursday's reading is yet another sign of the housing market picking up steam, as record-low mortgage rates have spurred demand for homes. A recovering job market and a tapering off of foreclosures have also given the market a boost. As distressed homes leave the market, that means that there are more buyers interested in purchasing fewer available homes. Home prices, in turn, have continued to rise, posting the biggest percentage gain in more than two years last month. Ken Keegan Real Estate Broker

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WWAY Report on St. James

Report from WWAYTV3.com:

A Brunswick County golf community is experiencing a boom in home sales. In fact, the leaders at St. James Plantation say 2012 was their best year yet.

"We welcome a new family every 27 hours to St. James, and that's unbelievable," General Manager Bob Duffy said.

Through the many struggles in the housing market, St.James Plantation has survived and even thrived.

"Last year we welcome over 275 families and closed over $40 million worth of property," Duffy said. "In addition, we constantly have well over 150 homes under construction in the community at any given time."

The 6,000-acre golf community is constantly building new homes to try and keep up with the demand. And it is no average neighborhood.

"We're our own town," Marketing Director Katie Campbell said. "We have a mayor. We have an EMS and fire department. What they give back to the community, I think, sets us apart."

Campbell says she believes the main attraction is it offers something for everyone

"We have 81 holes of golf, a full-service marina, private beach club on Oak Island, tennis and 4,500 owners, so they keep us all very busy," she said.

Campbell says the residents love the sense of community and are there to help one another.

 

Ken Keegan Real Estate Broker
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Make your old house look new again

If you own a prewar home, it's probably chock-full of charming period details -- and persistent headaches.

Quirky old-house nuisances are just a fact of life when your home has served many generations, even if it's been well maintained.

The key to trimming the cost of fixing these annoyances is finding someone who can repair, rather than replace, antique parts.

"Only kitchens and bathrooms need gut remodeling," says Les Fossel, an Alna, Maine, contractor specializing in 18th-century homes. "Most everything else is fixable."

Find seasoned pros at tradwebdirectory.com -- or test any contractor's proposed solutions for these common problems.

Cracked plaster walls

Fissures and chips don't mean you have to replace the handmade plaster with prefab wallboard (at $500 or more a room). That usually destroys the original wood trim, says David James, a contractor who works on old homes in Edenton, N.C. Instead, a restoration-minded pro can reattach the old plaster using special washers and then apply a plaster-like skim coat over the top, saving up to $200 a room -- and your trim work.

Drafty windows

Old windows rattle, are hard to operate, and let in icy drafts. Sure, you could replace them for a few hundred each, but for units that maintain the character -- and value -- of an older home, you'll pay $1,000 or more a pop.

Related: Low-cost ways to put off pricey home repairs

Have problem windows overhauled instead, for around $100 to $200 each. A carpenter will remove built-up paint, replace hardware, wax the rails, and weather-strip gaps, making the windows easier to open and close, and about 80% as efficient as new ones.

Squeaky wood floors

Time -- and multiple refinishings -- takes a toll on old floors, sometimes leaving them deafeningly creaky.

Related: Home repairs -- Which jobs come first?

A good woodworker can stop floorboards from rubbing together for about $200 to $500, usually by sinking micro-head screws through them and into the framing below.

The screws don't require putty, says Fossel: "When you wash your floor, the wood will expand and hide the holes."

Loose stair banister

Don't let a hack replace a rickety handrail. Spindles can be tightened at each step, and there's often a hidden pocket in the "newel" post at the base of the stairs. Inside is a nut that will firm up the post, strengthening the whole banister.

"Like so many old-house issues," says D.C. contractor Stephen Ortado, who has worked on the White House, "this is a simple $200 fix for someone who knows what he's doing."

Original Article

Ken Keegan Real Estate Broker
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Real estate: Find opportunity next year

In Money magazine's Make More in 2013, you'll learn what's contributing to a rosier outlook for economic growth, how to get more investment income at a time of super-low rates, and how you can start exploring and how you can start exploring job opportunities again. This installment: Why, as a prospective home seller or buyer, you need to stop sitting on your hands.

After five years of tumult, order and opportunity are finally being restored to the housing market.

Home prices are expected to rise a modest 1% from the fourth quarter of this year to the end of 2013, according to the real estate research firm Fiserv. David Stiff, Fiserv's chief economist, notes that after some choppiness early on, prices should increase 3.4% from the second quarter of 2013 to the second quarter of 2014. In hotter regions out West, you can expect bigger gains.

"Housing is finally turning the corner," Stiff says. "There is no reason to be fearful of further large price declines."

This creates a new playing field for homeowners, who are finally able to sell, as well as would-be buyers who've been delaying a purchase in anticipation that prices would keep falling.

The Mortgage Bankers Association forecasts that more and more house hunters will start coming off the sidelines, with new-home loans for purchases expected to jump 55%, based in dollars, in 2013.

With that increased competition, "the days of buyers sticking it to sellers are over," says Salt Lake City real estate agent Tracie Peay.

Sellers: Don't get too excited just yet. You don't have a viselike grip on this market either. Indeed, for many, it still makes sense to wait to get better prices. This is especially true if you know that you won't be able to break even on your investment by unloading your house now, once you factor in the sales commission and other costs.

That said, don't assume that prices will be off to the races again in a year or two.

Fiserv forecasts that between now and 2017, homes will gain 3.3% a year in value. That's hardly red-hot. But at least the market isn't frozen anymore.

THE ACTION PLAN

Sellers

The price still has to be right

Homes in many markets are selling in a matter of weeks, often attracting multiple bids -- but only the ones that are properly priced. Take San Francisco. Although the city is one of the strongest sellers' markets right now, the average home there goes for 103% of list price, not 120%.

"Buyers aren't going down the road that got so many people in trouble during the bubble," says Dallas real estate agent Mary Beth Harrison.

Focus on the appraisal

Whoever bids on your home will probably finance the purchase. That means any deal is still beholden to a third party.

"You can take the highest offer, but at the end of the day the appraiser has the final say on the value of the home," says David Howell, chief information officer at McEnearney Associates, a real estate agency in the D.C. metro area.

Related: 25 Best Places to Retire

With so much riding on the appraisal -- it can kill an agreement or require renegotiation -- your agent should be present. Harrison has a tip for making sure this happens: "The minute we have an offer, we take the keys off the door to make sure the appraiser has to meet us to get in."

Your agent should also prep a package of pertinent information for the appraiser, says Chicago real estate agent Fran Bailey. That includes the latest comparable sales data and documents detailing any upgrades or renovations to help the seller's cause. "It's part of my job to make sure the appraiser has the correct information," she says.

Buyers

Be ready to deal

With competition heating up, casual house shopping isn't going to cut it anymore. If you are serious about making a move, be prepared:

Three months out. Despite housing's green shoots, getting a mortgage remains incredibly tough. The average FICO credit score for recently denied applications on conventional purchase loans was 729. The score on approved mortgages was 762, with a 21% down payment, monthly payments equal to 21% of household income, and total debt that did not exceed 33% of income.

Related: 10 most affordable cities for homebuying

On the bubble with any of those requirements? Now's the time to burnish your finances. And if you plan to house hunt in the spring, watch your holiday spending.

Deal time. "If you want to buy, you have to be ready to make an offer," says Howell. Plus, your first offer should be very close to your best. "If the house has been on the market for three months or longer, you can be more aggressive," says Bailey. "But if it's a new listing, a low-ball bid will get you ignored."

The Money tracker: What can upset the forecast in the year ahead...

Ben runs out of ammo. Fed chairman Ben Bernanke is lifting housing by buying bonds to keep mortgage rates low. How much longer can he keep that going?

The loss of mortgage deductions. Should the tax break on mortgage interest get cut, that would throw cold water on the real estate recovery.

Sellers sit on the fence. Homeowners could remain on the sidelines as the ranks of buyers grow. In that case, the inventory of homes would shrink even more, lifting prices faster than expected.

Homeowners get bullish. A spate of home construction is already taking place in several major markets. In those regions, the housing stock is likely to stabilize, keeping price gains modest.

Banks loosen their grip. If tight lending standards return to historical norms, realtors argue, the market could see an additional 500,000 to 700,000 home sales next year.

Employer confidence rises. Since jobs are the engine of the housing market, a pickup in hiring later in the year, which economists are predicting, could accelerate a real estate rebound in the second half of 2013.

Original Article

Ken Keegan Real Estate Broker
(910) 523-0903 mobileEmail Mewww.KenKeegan.com Click here for more information on Brunswick, County Real Estate St. James Plantation