Development looks at change

From the State Port Pilot: Home construction will be taking a different approach in St. James Plantation, new real estate general manager Bobby Masters told members of the town planning board at their Thursday meeting. New construction will focus on single-family houses and lower-density construction, with an emphasis on raising property values in St. James, Masters said. Masters has replaced Bob Duffy, whose plans for the development, which makes up the vast majority of the Town of St. James, had included more semiattached homes, townhomes and similar structures, as well as clusters of smaller detached homes.Duffy resigned in February, saying at the time that the move was amicable and due to different visions about how to proceed. Bill deBruin, director of development and construction for St. James Plantation, recently announced that he was leaving as well. Masters will oversee both areas for the immediate future, he told the planning board Thursday, and will focus on inishing plans for development in the Seaside area, while focusing more on single-family homes. “I think in the immediate future, we’ll probably trend more toward lower density. I know there was a lot of talk about condos, townhomes, et cetera, but I think in the immediate future it’ll probably go the other way,” he said. He noted that construction at Harbor Walk had just inished, with 12 units on the market in what was probably the best area in the development to locate condos. “Smaller, single-family building is well-received, and the way those are priced, we would be hard-pressed to build a condo and put it on the market for cheaper than small single-family buildings.” “We don’t want to build a product that’s purely price-point,” he continued. “Everyone got killed in the crash, but prices are starting to come back and they will come back irst in places like St. James, with the amenities complete, sewer complete, et cetera. It’s a livable, viable, breathing town. “What we’re going to be trying to do is push those values back up to, quite frankly, where they need to be. We’re not interested in producing a cheaper product where someone comes to look just for the prices,” Masters said. “We’d rather sell less for more than more for less. Our goal is to provide a diversity of product and pricing so we can hit various niches of the market; we want to position ourselves where our prices are above the rest of the market, because we’re above the rest of the market.” Development in Seaside will likely continue as it is now, he said, with smaller but detached homes. If development does return to multi-family at some point in the future, he added, it would be more likely in the areas closer to the Midway Road bridge corridor or N.C. 211. One of the largest markets of buyers in St. James Plantation right now are what Masters called “pre-retiree,” or people who are not quite to the point of retiring and moving yet, and are often wanting to buy a lot and come later to build a home. Keeping an inventory of vacant lots as well as completed homes will help the development appeal to both markets, he said, adding that he envisioned a cooperation between the development ofice and building companies, possibly offering model streets in areas of new development mixed among the vacant lots. “People are starting to see prices going back up again,” he said. “People who have been trying to decide if the market has bottomed out start seeing it tick up, and that gets a lot of people to make that decision.” The development ofice has been “slammed” with tours for prospective buyers, he added, with numbers up from previous years. Town of St. James assistant zoning administrator Judy Hughes said she had approved ive building permits that day, and that total permits were up to 62 for the quarter; in the same quarter of 2012 the town issued 35 building permits, and 141 for the year. “It’s amazing to think that this pace can continue, but it’s very positive,” she said. Ken Keegan Real Estate Broker

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Boomerang buyers return to market after foreclosure

Interesting Article from CNN Real Estate: Borrowers who lost homes to foreclosure during the housing bust are starting to buy again. Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another 2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back -- and they are looking for a new place to call home. Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan's severe arthritis made it impossible for her to work her medical device sales job. The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home's value had plunged 40% below the $325,000 mortgage balance. "We were living under such pressure," she said. "We looked at the numbers and knew we had to default." After the foreclosure, Susan's credit score had taken a 70-point hit; Dave's score fell even further. Continued Ken Keegan Real Estate Broker

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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.

 

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