Residential inventories have never been this low (not even in the “Silly Season”) but the fundamentals are better this time ’round…
Greetings & Happy Memorial Week!
With the real estate market in record territory (again!), I felt compelled to write a brief “blurb” on the residential inventory levels we are currently seeing.
The Port City Daily recently published this well written article (May 24).
Two things I need to point out off the top: Brunswick County, NC, the county just to the south of Wilmington (which sits in awesome New Hanover County) has actually officially been part of the Myrtle Beach MSA for quite some time now – this “gripes” me but it is what it is. The article also may lead one to believe that the “national home developers are just now wandering back in” to southeastern, NC. They were of course here prior to us going “bust” in 2007-2008 and they have been here since, with varying degrees of activity.
2003-2006 (aka ‘the Silly Season’) in Brunswick County was like picking gold up off the streets. In the real estate market, we couldn’t miss.
Fast forward to 2007-2008. The Great Financial Crisis was the earthquake that set off the ensuing tsunami. 2008-2011 was the tsunami we were all swimming in and many of us didn’t realize we were swimming in it. I have a saying: If you are standing on the beach, and you look out and see the tsunami coming, the time to run has long since passed so you better be a darn good swimmer…
From 2006-2008 I spent most of my time running hard from the top of BrunsCo to the bottom making significant offers on land tracts, some for a very active regional developer, one of the largest pad developers in the Carolinas at the time, based out of Charlotte who is no longer with us. This group as I understand it had 27 projects across the Carolinas and when their main regional home builder stopped building, well, the dominos hit and all 27 projects across the Carolinas vanished…
If one of the national developers mentioned in this Port City Daily article put $25,000/acre down we would put $50,000/acre down and so it went until the merry-go-round stopped, the light switch flipped. Most nationals either had stopped or packed their bags and left seeing the storm (the tsunami) on the horizon.
After the defecation had hit the oscillator, one of my good colleagues mentioned in this article represented a group out of Atlanta who plucked up many defunct developments, some along the NC 211 corridor.
The Wilmington Star News put together a series of well written articles chronicling the impact, some I still have in my archive. A few were about the ‘Zombie Developments’. If you do a search you will find the article titles.
With my appraisal hat on, some of these land tracts that once sold in the $3 to $6 million range we were now putting liquidation values on for the banks in the $400,000 to $600,000 range.
In 2011, I was fortunate to be installed as President of our awesome Brunswick County Association of Realtors. I told my colleagues in the room that day if they were there and standing they had made it, the light at the end of the tunnel was no longer a train and that everyone in the room was an endurance athlete, whether they knew it or not…
Historic not just for our region and our state, but our country for sure. It’s as true today as it was then: if you’re in our awesome industry, you’re an endurance athlete. I know its true for any business, any industry, but it certainly applies to our real estate industry.
I admit my bias but Southeastern NC, heck our entire state, is a no brainer for quality of life. Thankfully, the fundamentals are in much better shape this time around. I’m grateful BrunsCo has been doing so well for quite some time now (set a ‘forever record’ last year in units sold) and feel very lucky it is where we raised our sons.
I do have concerns about our inventory levels. In my 19 +/- years in the business, I’ve never seen resi inventory this low across our state… the pandemic has super charged things for sure.
The in-migration to NC is nothing short of breath taking. But it makes sense: from the mountains to the sea, we have one of the best pieces of land in the country, if not the world, in our great state!
Wishing you and yours a great and safe Memorial Weekend ahead! Thank you to our Military Veterans – to you we owe a debt which can never be repaid!
Peter A. Frandano, CCIM, GRI, MBA
Author, Endurance Real Estate
