economic climate report 2016 - constant...

economic climate repor tCAPE FEAR AREA HOUSING

20162016

William W. (Woody) Hall, Jr., PhD, is Professor Emeritus of Economics, Department of Economics and Finance, Cameron School of Business, the University of North Carolina Wilmington.

Prior to his retirement in June 2015, he served as faculty member at UNCW for more than 40 years. He received his BA from Presbyterian College and his MS and PhD degrees from Clemson University. He specializes in the analysis of regional or sub-national economic activity and in the economic aspects of environmental pollution.

Cape Fear REALTORS® and the Wilmington - Cape Fear

Home Builders Association

C F R C H I E F E CO N O M I STW I L L I A M W. ( WO O DY ) H A L L , J R . , P h D

a c o l l a b o r a t i v e e f f o r t b y

1

MSA

RESIDENTIAL HOMES

RESIDENTIAL LOTS

HOUSING AFFORDABILITY

NEW HOMES

INTEREST RATE OUTLOOK

Definition.................................................................................... Map of Geographical Area of MSA................................................. MSA Unemployment Comparison .................................................Economic Growth Outlook............................................................

3 345-6

Existing Single Family Homes Sales ................................................ 3-County Comparison ................................................................. Average Sales Price Single Family Homes ...................................... 3-County Comparison .................................................................Days on Market Single Family Homes ...........................................M o n t h s o f S u p p l y Single Family Homes ................................Duplin County ............................ ................................................. S a m p s o n C o u n t y .....................................................................

Sales Units and Average Price by Year .......................................... 3-County comparison ..................................................................Land Distribution by 3-County Comparison ................................

Interest Rates & Outlook ..........................................................

Housing Affordability in Wilmington ..............................................

Permit Comparison State and Nation ............................................. 3-County Permit Comparison .......................................................Permit Distribution by 3-County Comparison .................................New Home Average Sales Price 3-County Comparison ....................

7 891011121314

15 1617

18

19-20

21222324

a c o l l a b o r a t i v e e f f o r t b y

TABLE OF CONTENTS

2

metropolitan statistical areaWILM INGTON

3

(also known as Metro)is defined as having at least one urbanized area with a population of 50,000 or more, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting patterns.

In early 2013, the Wilmington, NC MSA was redefined to include New Hanover and Pender Counties. Prior to that time, the MSA also included Brunswick County. Brunswick County is now part of the Myrtle Beach, SC MSA.

Preceding 2013, The Wilmington Metropolitan Statistical Area (MSA) included the following counties: Brunswick, New Hanover, and Pender.

New-WILM MSAPre-2013 WILM MSA

MSA

Unemployment RateThe United States added 2.4 million jobs over the past year. Since reaching a low of 127.8 million in January 2010, total non-farm payroll employment, 144.3 million, is currently 3.4% above its pre-recession peak level of 139.5 million. Meanwhile, the unemployment rate is currently 4.7%, 0.2 percentage points below its level one year ago and 5.3 percentage points below its recession-era peak of 10 percentage points.

The state of North Carolina added 80 thousand jobs over the past year. Since reaching a low of 3.79 million in January 2010, total non-farm payroll employment, 4.35 million, is currently 3.3 percentage points above its pre-recession peak level of 4.21 million. Meanwhile, the unemployment rate is currently 5.1%, 0.1 percentage points below its level one year ago and 6.2 percentage points below its recession-era peak of 11.3 percentage points.

Wilmington, NC added 3,300 jobs over the past year. An estimated 1,500 new construction jobs were added across the Wilmington area, this includes Brunswick County. Since reaching a low of 105.50 thousand in January 2011, total non-farm payroll employment, 123.20 thousand, is currently 2.8 percentage points above its pre-recession peak level of 119.90 thousand. Meanwhile, the unemployment rate is currently 4.7%, 0.5 percentage points below its level one year ago and 5.6 percentage points below its recession-era peak of 10.3 percentage points.

Over most of 2016 and through the first two months of 2017, unemployment rates have been relatively stable in the MSA (hovering between 4.4% & 5.2%), the state (hovering between 4.9% & 5.3%), and the nation (hovering between 4.6% & 5.0%).

3.7

5.0

6.5

5.8

4.5

4.2

3.8

3.8

5.3

9.6

10 9.9

9.0

7.8

6.1

5.5

4.8

5

5

6

5.2

4.7

4.4

4.8

4.6

4.8

4.6

4.5

4.5

4.7

20165.25.2

5.15.1

5.05.0

5.1

5.05.0

4.9 4.9 4.9 4.9

4.7

4.8

4.6

4.7

mar apr may jun jul aug sep oct nov dec

State

National

Wilmington

Wilmington

State

% unemployment rate

National

% u

nem

ploy

men

t rat

e

6

6

5

4

554

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

44

5

7666

5

66

5

11

10

11

10

10

9 9

88

7

55

55

data is from the Bureau of Labor Statistics in the US Department of Labor

5

6

Real gross domestic product (GDP) decreased in 292 metropolitan areas in 2016, led by growth in professional and business services; wholesale and retail trade; and finance, insurance, real estate, rental, and leasing, according to statistics on the geographic breakout of GDP released by the Bureau of Economic Analysis. Collectively, real GDP for U. S. metropolitan areas decreased to 1.6 percent in 2016 after increasing 2.6 percent in 2015.

Data from the Bureau of Economic Analysis in the US Department of Commerce indicate that growth in real (inflation-adjusted) output in the Wilmington, North Carolina Metropolitan Statistical Area (MSA), composed of New Hanover and Pender Counties, was highly volatile over the three-year period 2013 to 2016. The MSA economy grew 4.7% over 2013, 3.4% over 2014, 1.9% over 2015 and 2.1% over 2016.

The growth rates in real MSA, state, and national output since 2013. In both 2016 and 2017 growth in the MSA is forecast to be greater than that in both the state and nation. The historical data are from the Bureau of Economic Analysis. The state forecasts are from the Barings/UNC Charlotte economic forecasting project, and the national forecasts are from Wells Fargo Securities. The Wilmington MSA forecasts were developed by William W. Hall, Jr., PhD, professor emeritus of economics, UNC Wilmington.

E c o n o m i c G ro w t h O u t l o o k

5

4.7

2.1

3.4

1.9 2.

1 2.4

1.3

2.7

1.9 2.

0

2013 2014 2015 2016 2017 (f)

National GDP % IncreaseState GDP % IncreaseWILM-MSAGDP % Increase

2.4

1.7

2.6

1.6

2.2

2000

2

001

20

02

200

3

2004

20

05

200

6

2007

20

08

200

9

2010

2

011

201

2

2013

2

014

20

15

2016

The U.S. economy continued to expand, but at a subpar pace. Historically, the GDP grows by 3% each year, a figure that has not been reached for the past 11 straight years.

GDP ($ Trillions)

GDP % Year to Year

6

4.1

1.0

1.8

2.7

3.83.3

2.7

1.8

-.3

.3-2.8

2.5

1.6

2.2

1.7

2.4

2.6

1.6

12.6

12.7

12.9

13.3

13.8

14.2

14.6

14.9

14.8

14.4

14.6

15.0

15.4

15.6

16.0

16.4

16.7

data from the Bureau of Economic Analysis housed in the US Department of Commerce.

2013 2014 2015 2016 2017 (f)

E xisting Single-Family Homes Sales

12,0

55

9,38

7

7,44

5

5,45

0

5,00

6

5,43

9

5,54

5

7,05

7

8,08

9

8,45

9

9,81

9

10,2

30

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

7.1

6.5

5.0

4.14.3

4.24.3

4.7

5.1 4.95.3

5.5

136141

125

93

81 81 80

94

113118

128

140

# in National (millions)# in State (1000s)# in Wilmington Area

data source from Regional MLS, NCAR & NAR 2005 -2016

The following analysis is based on data on sales of existing single-family homes in Pender County, New Hanover County, and Brunswick County, NC (Wilmington Area), North Carolina (State) and the United States (National).

The United States added over 200,000 more sales over the 2015 level of 5.3 million. The 2016 sales level increased to 5.5 million units, 4% above its level one year ago. Since reaching a low of 4.1 in 2008, it is currently 23% below its 2005 peak level of 7.1 million sales and 32% higher than its recession-era bottom of 4.1 million units.

The state of North Carolina added 12,533 sales over the 2015 level of 127,942. The 2016 sales level was 140,475, 10% above its 2015 level. Since reaching a low of 80,600 sales in 2011, it is currently 0.5% below its 2006 peak level of 141,206 and 65% higher than its 2011 recession-era bottom of 80,600.

Total Wilmington area sales fell 58% from their 2005 peak level of 12,055 to their 2009 bottom level of 5,006. Sales grew continuously over 2010 to 2016. The 2016 sales level was 4% above its 2015 level of 9,819. Since reaching a low of 5,006 sales in 2009, it is currently 15% below its 2006 peak level of 12,055 and 104% higher than its 2009 recession-era bottom of 5,006.

Uni

ts S

old

7

Brunswick County 2016 sales level was 3,821, 1% above its level one year ago of 3,775. Since reaching a low of 2,034 sales in 2009, it is currently 15% below its high 2005 peak level of 4,500 and 88% higher than its 2009 recession-era bottom of 2,034.

New Hanover 2016 sales level was 4,981, 10% above its level one year ago of 4,545. Since reaching a low of 2,523 sales in 2009, it is currently 23% below its high 2005 peak level of 6,491 and 100% higher than its 2009 recession-era bottom of 2,523.

Pender County 2016 sales level was 1,428, 5% below its level one year ago of 1,499. Since reaching a low of 499 sales in 2009, it is currently 34% above its high 2005 peak level of 1,064 and 218% higher than its 2009 recession-era bottom of 449.

Brunswick County

New Hanover County

Pender County

Uni

ts S

old

8

1,06

4

947

708

510

449

523

612

843

1,12

91,

255

1,49

9

1,42

8

6,49

1

4,93

3

3,94

8

2,84

6

2,52

3

2,68

6

2,70

3

3,55

1

3,85

9

3,91

9

4,54

5

4,98

1

4,50

0

3,50

7

2,78

9

2,09

4

2,03

4

2,23

0

2,23

0

2,66

3

3,10

1

3,28

5

3,77

5

3,82

1

05 06 07 08 09 10 11 12 13 14 15 16 05 06 07 08 09 10 11 12 13 14 15 16

05 06 07 08 09 10 11 12 13 14 15 16

05 06 07 08 09 10 11 12 13 14 15 16

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

136 141

125

9381 81 80

94

113118

128

140

136 141

125

9381 81 80

94

113118

128140

136 141

125

9381 81 80

94

113118

128140

State (1000s)

County

Uni

ts S

old

data source from Regional MLS, NCAR & NAR 2005 -2016 data source from Regional MLS, NCAR & NAR 2005 -2016

Uni

ts S

old

The following analysis is based on data on an average sales price of existing single-family homes in Pender County, New Hanover County, and Brunswick County (Wilmington Area), North Carolina (State) and the United States (National).

The United States average home sales price increased $9,600 to $276,000 over the 2015 sales price of 266,400, an increase of 4%. Since reaching a low of $214,000 in 2011, it is currently 3% above its 2006 peak sales price of $268,2000, and 29% higher than its recession-era bottom of $214,000.

North Carolina 2016 average price increased to $234,624 over the 2015 sales price of $216,561, an increase of 8%. Since reaching a low sales price of $197,057 in 2011, it is currently 4% higher than its high 2007 peak level of $223,634 and 19% higher than its 2011 recession-era bottom of $197,057.

Wilmington’s average home sales price increased to $262,993 over the 2015 sales price of $258,350, an increase of 2%. Since reaching a low of $231,056 sales price in 2011, it is currently $34,284 less than its high 2007 peak price of $297,280 and $ 31,937 higher than its 2012 recession-era bottom of $231,936. Wilmington’s average home sales price is 12% greater than the North Carolina average home sales price and $13,007 less than the National average home sales price of $276,000 for 2016.

Average Sales Price Single-Family Homes27

4,17

6

284,

137

297,

280

274,

345

256,

347

236,

056

231,

056

238,

947

247,

804

258,

350

262,

993

245,

086

Ave

rage

Sal

es P

rice

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

266268 266

243

217 220214

225

246

255

266

276

211215

224

215

201 203197

203211

216 217

235

National ($1000s )State ($1000s)Wilmington Area ($)data source from Regional MLS, NCAR & NAR 2005 -20169

Average Sales Price Single-Family Homes

219

255

259

229

234

209

219

220

224

239

254

255

277

272

282

261

253

233

229

280

299

315

292

263

262

246

242

258

266

273

279

Brunswick County In 2016 the Brunswick County average home sales price increased $1,577 to $244,366 over the 2015 home price of $242,789, an increase of 0.6%. Since reaching a low home sales price of $219,315 in 2013, it is currently $37,712 below its 2007 peak price of $282,078 and $25,051 higher than its 2013 recession-era bottom. It is $9,742 above the NC State average home price and $31,633 below the national average home price for 2016.

In 2016 New Hanover County average home sales price increased $6,574 to $279,396 over the 2015 home price of $272,823, a 2% increase. Since reaching a low sales price of $241,568 in 2012, it is currently $35,560 below its 2007 peak price of $314,956 and $37,828 higher than its 2012 recession-era bottom of $241,568. It’s $44,772 above the North Carolina average home price and $3,996 greater than the National average home price for 2016.

Since 2005 the average price has decreased in only two years, viz., 2008 and 2010. Prices began rising in 2011, but the growth rate has fluctuated between 0.3% in 2012 and 7 % in 2014. Pender County average home sales price increased slightly $1,956 to $255,617 over the past years home price of $253,600. Since reaching a low home sales price of $209,205 in 2010, it is currently $2,982 below its 2007 peak price of $258,600 and $24,412 higher than its 2010 recession-era bottom of $209,205. It’s $20,993 above the NC State average home price and $20,382 below the national average home price for 2016.

New Hanover County

Pender County

State ($1000s)

County ($1000s)

227

243

244

219

223

National ($1000s)A

vera

ge S

ales

Pric

eA

vera

ge S

ales

Pric

eA

vera

ge S

ales

Pric

e

05 06 07 08 09 10 11 12 13 14 15 16

266 268 266

243

217 220 214 225246

255266

276

211 215224

215201 203 197 203 211 216 217

235

05 06 07 08 09 10 11 12 13 14 15 16

266 268 266

243

217 220 214225

246255

266276

211 215224

215201 203 197 203 211 216 217

235

05 06 07 08 09 10 11 12 13 14 15 16

266 268 266

243217 220 214

225246

255266

276

211 215224

215201 203 197 203 211 216 217

235

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

data source from Regional MLS, NCAR & NAR 2005 -2016 data source from Regional MLS, NCAR & NAR 2005 -201610

DOM Single-Family Homes

New Hanover National Brunswick Pender

105

110

113

106

101

74

78

56

50

43

101

75

64

68

65

72

68

52

36

34

51

53

2016

2015

2014

2013

2012

2011 131

97

One frequently used indicator of residential single-family housing market strength is median days on market (DOM), the number of days that a residential property “sits” on the market before a completed sale. In general, a fall suggests a strengthening market, while a rise suggests a weakening market.

For the most part, median DOM rose continuously in all three counties and the nation over 2005 to 2011, when they peaked. In 2011 the national median DOM was 97 days. It decreased down to 43 days in 2016, a reduction of 54 days or 55% from the 2011 peak, suggesting a very strong real estate market across the nation.

In 2011, Brunswick County median DOM was 131 days, 34 days higher than the Nation. In 2016 it decreased 57 days or 43% to 74 days from the 2011 peak. This trend suggests a strengthening real estate market.

In 2011, New Hanover County median DOM was 105 days, 7 days greater than the National. In 2016 it decreased 74 days or 68% to 34 days from its 2011 peak. This trend suggests a strengthening real estate market.

In 2011, Pender County median DOM was 101 days, lowest of the 3 counties for most of the recover years. In 2015 it decreased 65 days or 64% to 36 days from 2011, 14 less days than the national average. In 2016, Pender County lost a few weeks by adding 15 days. This trend suggests a strengthening real estate market.

data source from NC Regional MLS and NAR Survey 2009 to 201611

New Hanover12

Pender County hit a high in 2009 with a 20 months supply which was 130% or 11 months higher than the national supply average of 9 months. Pender County dropped to 7 month supply in 2016. This was a 65% drop from its 2009 peak. This suggests a balanced real estate market for 2016.

28

28 24 24 1914 6

Months of Supply Single-Family Homes

10

This chart shows the absorption rate per year, this depicts how many months it would take for all the current homes on the market to sell. Five to eight months of supply is considered a Balanced Market: if the number is less than five months, this suggests a Seller’s Market. If the number is greater than 8 months, this suggests a Buyer’s Market.

5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

6

National Brunswick

64 6 7 10 12

18

20

16 20 14 17 15 16 13 128 138

Seller’s Market5 months or less

BalancedMarket

Buyer’s Market 8 months or more

Pender

1614 1410 10

data source for NC Regional MLS and NAR 2005 to 2016data source from NC Regional MLS and NAR Survey 2009 to 2016

Brunswick County hit a high in 2007 with a 28 months supply which was 218% or 20 months higher than the National 9 months supply. Brunswick County months supply dropped to 8 months in 2016, a 71% drop from its 2006 peak. This suggests a balanced realestate market for 2016.

New Hanover hit a high in 2009 with a 18 months supply which was 100% or 9 months higher than the national supply average of 9 supply dropped to a 5 month supply in 2016, a 73% drop from its 2009 peak. This suggests a marginally balanced-seller’s real estate market for 2016.

7

9 910

98

65 5 55 4

8 5 7

13

The Duplin County average home sales price increased $5,244 to $116,812 or 5% over the 2015 home price of $111,577. Since reaching a low home sales price of $88,339 in 2011, it is currently 10% or $12,280 below its 2008 peak price of $129,101 and 33% or $28,482 higher than its 2011 recession-era bottom of $88,339. The average sales price for Duplin County is significantly below the State and local Wilmington Area. Duplin County is 56% or $146,171 below the 2016 average home sales price for the Wilmington Area and $117,803 or 50 % below North Carolina. Duplin County hit 173 sales for 2016 which was 10% higher than the past year level of 158. Since reaching a low level of 97 sales in 2010, it is currently 13% below its 2005 peak level of 199 sales and 78% higher than its 2010 recession-era bottom of 97 sales.

In 2011, Duplin County median days on market (DOM) was 119 days, this was 22 days higher than the National DOM of 97 days. In 2016 it decreased 35 days or 29% to 84 days from its 2011 peak of 119. Monthly supply dropped to 13 months in 2016 from its 2011 peak of 24 months. By most metrics, the local existing single-family real estate market is improving. This growth in Duplin County is supported by rising sales volume and average sales prices and declining average days on market and supply.This suggests a buyer’s real estate market thatis strengthening.

D u p l i n Co u n t y E xisting Single-Family Homes

198

10 9 11 14 16 22 24 23 21 16 16 13

91,7

62

104,

349

103,

116

129,

101

96,2

76

97,4

76

88,3

39

97,5

06

103,

400

107,

581

111,

577

116,

502

199

176

151

121

97

113 116

154 156 158173

198

05 06 07 08 09 10 11 12 13 14 15 16

05 06 07 08 09 10 11 12 13 14 15 16

93

77 80

111

84

120

100100

119110

103115

data source from Regional MLS 2005 - 2016

# of Sales

Average Sales Price

DOM

Month Supply

The Sampson County average home sales price increased $10,271 to $116,502 or 10 % over the 2015 home price of $106,231. Since reaching a low home sales price of $95,750 in 2013, it is currently 0.7% or $755 above its 2008 peak price of $115,727 and 21.7% or $20,752 higher than its 2013 recession-era bottom of $95,750. The average sales price in Sampson County is significantly below the State and Wilmington Area. Sampson County is 56% or $146,491 below the 2016 average home sales price for the Wilmington Area and $118,122 or 51 % below North Carolina. Sampson County hit 168 sales for 2016. This is 16% over the 2015 level of 145 sales. Since reaching a low level of 113 sales in 2008, it is currently equal to the 2005 peak level of 168 sales and 49% higher than its 2008 recession-era bottom of 113 sales.

In 2011, Sampson County median days on market (DOM) was 123 days, 26 days higher than the National DOM of 97 days. In 2016 it decreased 48 days to 75 days or 39% from its 2011 peak of 123 days. Monthly supply levels dropped to a 7 month level in 2016, which was 50% off its 2012 peak of 14 months. By mostmetrics, the local existing single-family realestate market is improving in SampsonCounty. This growth is supported by rising sales volume andaverage sales prices and declining average days onmarket and supply. This suggests that Sampson County is in a balanced real estate market that is strengthening.

S a m p s o n Co u n t y E xisting Single-Family Homes

6 6 8 10 12 13 14 14 11 10 10 7

99,6

61

97,9

51

102,

002

115,

727

113,

331

109,

812

105,

621

98,9

37

95,7

50

117,

894

106,

231

116,

502

05 06 07 08 09 10 11 12 13 14 15 16

05 06 07 08 09 10 11 12 13 14 15 16

168154

150

113119 122

130

162148 145

168

115

05 06 07 08 09 10 11 12 13 14 15 16

76

63

80

69

97

78

123

81

10191 91

75

data source from Regional MLS 2005 - 2016 data source from Regional MLS 2005 -2016 14

# of Sales

Average Sales Price

DOM

Month Supply DOM

Month Supply

15

The following analysis is based on data supplied by CFR on sales of residential lots of no more than one acre in size in Pender County, Brunswick County and Hanover County NC (Wilmington Area) over the 2005 to 2016 period.

Common to all three counties was a dramatic decline in sales over 2005 to 2009, when they reached their trough. As was the case with home sales, the average price fell beginning in 2006 but did not “bottom out” until 2012, three years following the year when sales reached their low point in 2009. Prices have recovered since 2012 but are still off the 2005 to 2009 prices.

Wilmington had 1,728 lot sales in 2016 which was 5% higher than the past year level of 1,653. Since reaching a low of 513 lot sales in 2009, it is currently 61% below its 2005 peak level of 4,437 sales and 237% higher than its 2009 recession- era bottom level of 513 lot sales.

Average sales price was $98,091 in 2016, 3% higher than the 2015 sales price of $95,091. It is currently 31% above its 2012 recession-era bottom of $74,814 and $48,716 less than its 2008 peak of $146,820.

By most metrics, the local market for residential lots continues to improve. This growth is supported by rising sales volume and average sales prices.

4,43

7

1,01

3

1,99

8

681

1,14

1

513

843

1,71

1

1,60

1

1,69

7

1,65

3

1,72

8

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

989589

87

75

82

95

138147

126

141146

Average Lot Sales Price for Wilmington Area ($1000) # Sold for Wilmington Area

Residential Lots

Lot S

ales

& P

rice

Average Sales Price ($1000s)

# Sold

From 2005 to 2009, lot sales fell 90% in Brunswick County to 358. Sales rebounded over 2010 to 2016. Brunswick County had 1,208 lot sales in 2016 which was 6% over the past year level of 1,138 sales. Since reaching a low of 358 lot sales in 2009, it is currently 65% below its 2005 peak level of 3,451 sales and 237% higher than its 2009 recession-era bottom of 358 lot sales. The average sales price was $79,269 in 2016, 2% less than the 2015 sales price of $80,762. It is currently 28% greater than its 2012 recession-era bottom of $62,017 and $66,137 less than its 2008 peak of $145,407.

3,45

1

1,52

6

762

464

358

558

707

1,16

7

1,09

7

1,20

9

1,13

8

1,20

8

654

283

217

131

108

188

215

378

284

279

289

345

332

189

160

86 47 97 91 266

220

209

226

175

Brunswick County

New Hanover County

Pender County

05 06 07 08 09 10 11 12 13 14 15 16

05 06 07 08 09 10 11 12 13 14 15 16

122

05 06 07 08 09 10 11 12 13 14 15 16

125

105

145

111

8977

6272 74

81 79

294

253

211

239

185

123106

118

161 156 150174

96

118112

99

113

74 7266

7385

99

78

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Lot S

ales

& P

rice

data source from Regional MLS 2005 to 2016

Lot S

ales

& P

rice

Lot S

ales

& P

rice

Sales rebounded over 2010 to 2016 with a surge spike in 2012. New Hanover County had 345 lot sales in 2016 which was 19% over the past year level of 289. Since reaching a low of 108 lot sales in 2009, it is currently 47% below its 2005 peak level of 654 sales and 219% higher than its 2009 recession-era bottom of 108 lot sales. New Hanover County lot prices have consistently exceeded those of both Brunswick and Pender Counties, in some years by more than 100%. The Average sales price was $174,208 in 2016, 16% higher than 2015 sales price of $149,931. It is currently 64% above its 2011 recession-era bottom of $106,252 and $120,160 less than its 2008 peak of $294,369.

In 2016, Pender County had 175 lot sales which were 23% lower then 2015 sales level of 226 sales. Since reaching a low of 47 lot sales in 2010, it is currently 47% below its 2006 peak level of 332 sales and 272% higher than its 2009 recession-era bottom of 47 sales. The average sales price in Pender County was $77,612 in 2016, 22% lower than 2015 sales price of $99,361. It is currently 17% above its 2012 recession-era bottom of $66,465 and $41,208 less than its 2008 peak of $118,828.

16

17

These charts have been developed to provide additional detail on the impact of the construction boom and succeeding recession on the residential real estate lot market in the Wilmington area. Data on lot sales for the three years of 2005 (three years before the onset of the 2007-2009 national recession), 2009 (the last year of that recession), and 2016 (more than seven years following the end of that recession) are shown in the respective pie charts. Between 2005 and 2009, both the absolute number of and the relative importance of Brunswick County lot sales in the region declined. There was no change in Brunswick County’s relative importance between 2009 and 2016. In sharp contrast, the relative importance of both New Hanover County and Pender County rose between 2005 and 2009. That importance did not change appreciably between 2009 and 2016.

2005

10%

20%

70%

9%

21%

7%15%

78%

2009

2016

70%

Land Distribution by County

New HanoverBrunswick

Pender

data source from Regional MLS 2005 -2016

Pender

Pender

Brunswick

New Hanover

New Hanover

Brunswick

Interest Rate Outlook

The US Federal Reserve System has begun raising interest rates. Following an average conventional 30-year mortgage interest rate of 3.65% over 2016, Wells Fargo Securities forecasts that this rate will rise to 4.38% and 4.53% in 2017 and 2018, respectively. These forecasts maintain the traditional differential of 160 to190 basis points between the mortgage interest rate and the yield on the 10-year US Treasury security.

200

0

200

1

2002

2

003

20

04

200

5

20

06

200

7

200

8

2009

2

010

2

011

2

012

2

013

2

014

2

015

2

016

2

017

20

18

8.05

6.64

5.83

5.84

5.87

6.34

5.04

4.69

4.45

3.66

3.98

4.17

3.85

3.65

6.03

6.41

6.97

18

4.38

4.53

19

The US Department of Housing and Urban Development (HUD) bases its definition of affordable housing on monthly payments to amortize debt and pay utility costs which do not exceed 30% of gross monthly income. In many communities, the people that provide vital services—teachers, firefighters, police officers, and health care workers and restaurant workers—often cannot themselves afford to live there. Locally, nearly 60% of all employed, are lower-income service workers. In 2016, in New Hanover County the average price of an existing home was $279,396. Based on this cost and the average area rental costs, 31% of homeowners and 47% of renters exceed 30% of their gross income. The average existing home price in Pender County was $255,617, with 31% of area homeowners and 43% of renters exceeding 30% of their gross income. In Brunswick County, the average price of existing home was $244,366, with 28% of area homeowners and 45% of area renters exceeding 30% of their gross income.

What is

Occupation approximate loan amount ($)

5% down payment ($)

30% of income ($)

monthlyincome ($)

yearly wage ($)

purchase price ($)

Childcare Nursing Assistant Retail Sale person Teacher Assistant Bank Teller Police officer Middle School Teacher Registered Nurse

19,301 1,609 488 67,195 3,360 63,835 23,320 1,943 583 81,148 4,057 77,091 24,700 2,058 618 81,653 4,083 77,57024,740 2,062 618 81,653 4,302 81,73929,470 2,456 737 102,548 5,127 97,42130,460 2,538 762 105,995 5,300 100,65640,290 3,358 1007 140,201 7,010 133,19156,800 4,733 1420 197,652 9,883 187,769

Median Household Income (Wilmington MSA): $48,700

Assuming a 95% conventional 30-year mortgage interest rate of 4.5%, the table above shows the monthly payment covering principal and interest only for various loan amounts. Data source from the ACS, the BLS, and the NLIHC 2016 Out of Reach report. 2016 to 2017 home data source NC Regional MLS as from Jan 1, 2016 to June 1, 2017.

for a Wilmington Worker ? HOUSING AFFORDABILITY

67,1

95

140,

201

81,1

48

81,6

53

81,6

53

102,

542

105,

995

197,

652

262,

993

296,

038

mid

dle

scho

ol te

ache

r

regi

ster

ed n

urse

polic

e of

ficer

child

care

nurs

e as

sist

ant

reta

il sa

les

teac

her a

ssis

tant

bank

telll

er

2016

ave

rage

exi

stin

g ho

me

pric

e

2016

ave

rage

new

hom

e pr

ice

maximum affordable home price not exceeding 30% gross income by occcuaption

approximate loan amount ($)

Assuming a 95% conventional 30-year mortgage interest rate of 4.5%, the table above shows the monthly payment covering principal and interest only for various loan amounts. Data source from the ACS, the BLS, and the NLIHC 2016 Out of Reach report. 2016 to 2017 home data source NC Regional MLS as from Jan 1, 2016 to June 1, 2017.

$75,000 to $125,000

$125,000 to $175,000

$175,000 to $225,000

Monthly Home Supply

# Sold

1,62

1

756

473

407

531

785

960

1,19

1

1333

1158

1157

959

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

2,75

6

2,11

5

1,57

0

1,28

4

1,32

1

1,34

9

1,31

4

1,63

0

1,90

5

1,93

6

2,18

7

2,09

7

2,02

7

1,83

5

1,47

7

1,06

2

1,01

5

930

881

1,16

5

1,37

2

1,45

8

1,71

3

1,77

8

1,37

3

1,45

6

1,59

2

1,76

7

2,23

7

5

97

64 3

6

11

97 7

53

2017 Monthly Supply

months

0.7

16

2018

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

2017 Monthly Supply

months

1.7

922

1,07

3

1,28

9

1,57

3

2,29

9

7

98

6

3 2

5

87 7

5

3

11

14 15 14

12

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

2017 Monthly Supply

months

2.4

391

450

552

698

1,27

4

7 7

4 3

7

1110

11

16 16 1513

98

76

4

14

# So

ld#

Sold

# So

ld

20

21

The following analysis is based on permit data of single-family homes in Pender County, New Hanover County, and Brunswick County, NC (Wilmington Area), North Carolina (State) and the United States (National).

The United States finished 2016 with 750,796 permits an increase of 8% above its level one year ago of 695,998 permits. It is currently 80% higher than its 2011 recession-era bottom of 418,498 permits and currently 55% below its 2005 peak permit level of 1,681,966.

The state of North Carolina 2016 permit level was 43,675 which was 4,738 more permits or 12% above its level one year ago. Since reaching a low of 24,863 permits in 2011, it is currently 49% below its 2005 peak permit level of 84,975 and 66% higher than its 2011 recession-era permit bottom level.

The Wilmington area 2016 permit level was 3,756 which was 5% or 178 permits below its level one year ago of 3,934. The Wilmington area is 131% higher than its 2010 recession-era permit bottom permit level of 1,571 and is 51% below its peak permit level in 2005 of 7,685.

New Construction

National Permit # (1000s)State Permit # (1000s)Wilmington Area Permit #

1036

Building Permits: A Possible Leading Indicator of Future Construction

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

3,93

4

3,75

6

3,40

7

3,51

3

3,61

3

1,66

2

1,57

1

1,84

4

2,97

1

4,99

8

6,20

5

7,68

5

6,86

1

5,52

7

4,29

0

3,55

5

2,73

6

751

696

663621

518

418473442

576

980

4439

3536

30252625

39

70

8385

77

676663

59

1236

1682

1613

1461

1333

1379

1198

data source from WCFHBA & U.S. Census Bureau

Perm

it Le

vel

96

96

96

96

96

96

State Permit # (1000s)

County Permit #

Brunswick County

New Hanover County

Pender County

A total of 1,226 permits, 33% of the Wilmington area total, were issued in New Hanover County, with the bulk of these (372 or 30%) being issued for construction in the City of Wilmington. The 2016 permit level is 9 percent or 103 permits greater than its level one year ago and 159% higher than its 2010 recession-era bottom of 473 permits.

A total of 2,005 residential building permits, 53% of the Wilmington area total, were issued in Brunswick County in 2016. The bulk of these (480 or 24%) were issued in Leland in northern Brunswick County. The 2016 permit level is 11% or 244 permits below its level one year ago and 125% higher than its 2010 recession-era bottom of 892 permits.

A total of 525 permits, 14% of the Wilmington area total, were issued in Pender County, with the bulk of these (98 or 22%) being issued for construction in Surf City. The 2016 permit level is 7% or 37 permits below its level one year ago and 323% higher than its 2009 recession-era bottom of 124 permits.

892

943

1,22

6

1,64

3

2,24

9

2,00

5

1,99

5

1,31

9

473

482

1,06

4

1,48

2

1,12

3

1,22

6

982

401

2009 2010 2011 2012 2013 2014 2015 2016

206

237

323

388

562

525

430

124

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

2009 2010 2011 2012 2013 2014 2015 2016

data source from WCFHBA & U.S. Census Bureau data source from WCFHBA & U.S. Census Bureau

Perm

it Le

vel

Perm

it Le

vel

Perm

it Le

vel

36

30

2526

3539

44

25

36

30

2526

3539

44

25

36

30

2526

3539

44

25

22

23

These charts depicts the percentage distribution of permits by county at three points in time, viz., 2009 (the last year of that recession), 2013 (early recovery year) and 2016 (more than seven years following the end of that recession) are shown in the respective pie charts. Brunswick County accounted for 72% of all Wilmington in 2009, 47% in 2013, and 53% in 2016. New Hanover County accounted for 22% of all Wilmington Area Permits in 2009, 42% in 2013, and 33% in 2016, while Pender County accounted for 7% of all Wilmington Area Permits in 2005 and 11% in 2009 and 14% in 2016. Thus, compared to both Brunswick and New Hanover Counties, Pender County gained market share between 2009 and 2016.

2016

2013

200947%

42%

11%

22%

7%

72%

14%

33%53%

Permit Distribution By County

Brunswick

Brunswick

Brunswick

New Hanover

New Hanover

New HanoverPender

Pender

Pender


Brunswick County In 2016 the Brunswick County average new home sales price increased $822 to $254,934 over the 2015 new home price of $254,112, an modest increase of 0.3%. Since reaching a low home sales price of $231,827 in 2012, it is currently $8,086 below its 2007 peak price of $246,848 and $23,107 higher than its 2012 recession-era bottom. It is $10,568 or 4% above the 2016 average existing home sales price of $244,366 for Brunswick County.

In 2016 New Hanover County average new home sales price increased $24,843 to $350,571 over the 2015 home price of $325,727, a 7% increase. Since reaching a low sales price of $268,473 in 2011, it is currently $36,043 below its 2007 peak price of $386,614 and $82,098 higher than its 2011 recession-era bottom of $268,473. It is $71,174 or 25% above the 2016 average existing home sales price of $279,396 for New Hanover County.

In 2016 Pender County average new home sales price increased $12,930 to $287,964 over the 2015 home price of $275,035, a 4% increase. Since reaching a low sales price of $239,498 in 2011, it is currently $30,823 below its 2007 peak price of $318,787 and $48,467 higher than its 2011 recession-era bottom of $239,498. It is $32,347 or 13% above the 2016 average existing home sales price of $255,617 for Pender County.

New Hanover County

Pender County

Exisiting Home Sale Price ($1000s)

New Home Sale Price ($)

Ave

rage

Sal

es P

rice

05 06 07 08 09 10 11 12 13 14 15 16

data source from Regional MLS 2005 -2016 24

300,

238

342,

826

386,

614

323,

657

301,

135

279,

961

313,

187

268,

472

325,

728

350,

570

307,

062

285,

375

Ave

rage

Sal

es P

rice

05 06 07 08 09 10 11 12 13 14 15 16

228,

582

287,

629

318,

787

293,

407

287,

194

250,

759

261,

212

239,

498

275,

035

287,

964

243,

149

242,

018

Ave

rage

Sal

es P

rice

05 06 07 08 09 10 11 12 13 14 15 16

203,

525

234,

715

246,

848

235,

858

239,

451

244,

671

258,

499

233,

279

254,

112

254,

934

241,

936

231,

827

218

255 259

229234

209219 220

224

240

254256

281

299

315

292

263 262247 242

258266

273279


New Home Average Sale Price

277272

282

261253

233227

223 219229

243244

Notes Thank You 2017 CFR Sponsors

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The Wi lmington – Cape Fear Home Bui lders Assoc iat ion (WCFHBA) i s the vo ice o f the bu i ld ing and deve lopment indust r ies in Southeas tern North Caro l ina . Chartered in 1965 and represent ing near ly 900 member- f i rms , the WCFHBA is the la rgest t rade assoc iat ion in Coasta l North Caro l ina and the th i rd la rgest Home Bui lder Assoc iat ion in the s tate . The Wi lmington-Cape Fear Home Bui lders Assoc iat ion represents an indust ry that cont r ibutes b i l l ions o f do l la rs to the economy of Southeastern North Caro l ina and supports thousands o f jobs in the greater Wi lmington area . For more than 50 years , the Wi lmington-Cape Fear Home Bui lders Assoc iat ion has been the vo ice o f the bu i ld ing indust ry, work ing to support not on ly our members invo lved in the home bui ld ing indust ry, but a l so be an in f luent ia l force for respons ib le growth by protect ing property r ights and the pr iv i lege of home ownersh ip.

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REALTORS® in the Cape Fear Region of NC are an effective voice for real estate,

protecting your right to own, transfer and use real property. Our effective legislative

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E C O N O M I C C L I M AT E R E P O R T

2016

economic climate report 2016 - constant...

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