‘The Morning After The Boom’ In North Carolina
A rare housing bubble report from North Carolina. “The morning after the big real estate boom is roughest in places like Carolina Beach where speculation pushed some prices up close to 100 percent over two years. But the giddiness of 2005 is a memory in a lot of places.”
“May marked the fourth month in a row that the number of homes sold declined from the same time last year, according to the Wilmington Regional Association of Realtors, which covers New Hanover and parts of Pender and Brunswick counties.”
“Last summer, real estate on Carolina Beach was so hot resident Vick Gore said he could mow his lawn and a Realtor would approach and offer to list his second-row home. Now the search is for buyers. Nearly 800 Carolina Beach properties are on the market, many of them new construction like the duplexes surrounding Gore’s 70-year-old cottage, one of them with a ‘reduced price’ sign in the front yard.”
“‘There’s nothing happening down here,’ Gore said, adding that another of his properties near Snow’s Cut has attracted barely a serious nibble in the six months since he put a sign on it.”
“From January to March this year, median price for an existing single family home in the county dropped to $198,000 from $235,000, according to a data-collection company.”
“Broker Martie Rice expects more decreases in prices on Pleasure Island, a boon for the person looking to keep the property for two or three years and use it. ‘Someone can get a terrific value on a really nice home,’ she said. ‘Just don’t plan to make a profit on it in the next 12 months.’”
“(Realtor) Justin Donaton in Carolina Beach said..people who bought before last year might not be able to sell for all they hoped, but they probably still can make money, he said.”
“It’s trickier if you bought last year. ‘Good properties and fair prices are going to sell,’ he said. ‘A fair price probably isn’t last July or August’s prices.’”
We spent summers in Pleasure Island and Carolina Beach when I was a kid. They were cool little beach towns then. I’ll bet they look like Atlantic City now. A shame.
Maybe comps from 2000 would be a “fair price”.
Be it North Carolina or wherever, yes the year 2000 would be a better starting point. If I were (and I’m not) actively looking for a property (home or investment) I’d be telling the agent “don’t show me anything built, bought or refinanced after 2002!” At the latest! If we’re going to be serious about this we need to go back to “pre-bubble” pricing and then factor back in “normal” appreciation.
Oh, you’re not willing to consider that? Well fine then, my daughters don’t graduate college for another three years. You see Mr. Seller, I have all the time in the world. Do you?
Sound advice! Add to that, no “investment” properties –period. “Owner-occupied” only, thank you.
try 2003 for a start
WHAT’s your hood priced at now ?
22151 N VA is may 2005 pricing
I would be cautious with using 2003. Many of us here thought that was when the (much smaller) bubble would/should have collapsed. Creative financing stalled it and made the eventual drop that much worse. If prices in 2003 were too high how will going back to them mean the end of the decline?
If you look at the specific sales numbers/DTI ratios/income ratios, etc., it looks like 2001 was a natural peak in San Diego. IMHO, we seamlessly transitioned from a housing bubble to a credit bubble in 2001/2002. It’s the credit bubble we need to collapse at this point.
“It’s trickier if you bought last year. ‘Good properties and fair prices are going to sell,’ he said. ‘A fair price probably isn’t last July or August’s prices.’”
What exactly were you telling your buyers last July and August? I doubt you mentioned that the price wasn’t “fair” value.
Woohoo! Carolina Beach condos for everyone!
From the other end of the state (in the mountains), the construction boom of condominiums continues unabated. There are several developments of “summer home” condos in our small community - one 50 unit structure is going on right across the hill from us. These are $500K priced units. They’re built on a hillside so steep that when the poor FLA retiree trips and stumbles, they’ll roll a long way down before they stop. Have no idea how many of the units are “spoken for”, but there aren’t too many people stopping by for the week-end open-houses….
Condo inventory in Asheville (a mountain town) is up over 50% over a year ago. House inventory is up about 15% over last year.
Meanwhile, this very low-density town (2.5 people per acre) has suddenly begun to embrace high-density development. Lots of new construction, even more planned.
My friend in Asheville rents a 3/2 for $950 a month. A SMALLER house in the same ‘hood recently listed for around $300K.
Standard developer claim across the country: wealthy individuals will clamor to buy one of their ‘luxury’ condos as a first or second home. Problem is, and none of these greedy developers will acknowledge it, there aren’t enough of those imaginary people to fill all the condos being built in this country under that assumption.
I visualize a phantom mob of elderly zombie middle-class millionaires summoned into brief existence whenever a developer claims there are hordes of people ready and waiting to occupy these units. But alas, they have no actual substance, much to the future dismay of the cities who approved building all these structures for imaginary buyers.
Yo, wait a minute…FLA retirees? I thought the Florida market was “different” because ALL of the baby boomer retirees were going to buy homes and condo’s in Florida.
Actually I agree with your statement (I live in South Florida right now, though temporarily). Most folks I talk to here (normal middle class folks) all want to sell and move to the hills in NC or GA. I laugh when Florida real estate promoters (liars) talk about all the retirees wanting to move to FL. They need to wake up. The retirees are leaving because it cost so much here and the weather SUCKS half of the year. It was attractive to a lot of people when it was cheap, but not now. Though I do have an analogy of the influx of population; Florida is the bottom of the sewer and most of the other Eastern state’s riff-raff all drain down to Florida as a place of last resort. Just watch the nightly news. Most child rapes, murders, heinous crimes, etc. are by some loser in Florida.
400k condos in downtown Asheville
downtown ?
WTF !
Holy Sh*t!
And, some of the condos in downtown asheville are really just stacked-up trailer homes. Like this new complex:
http://www.glazerarchitecture.com/lexingtonstation.html
Who would buy this crap, other than flippers?
There are some advantages to modular construction. I doubt that complex is any worse than the average frame built multifamily building.
I think the thing about modulars that makes them seem cheap is that it’s quite obvious that there’s nothing to construction, and yet they’re probably better built than a frame house. It’s just the “visual” of “That’s all there is to it?” Which makes it quite obvious that the builder spend $3,000 to make a stackable box and now he’s going to proceed to stack it and then sell it for $300k.
When a Korean agent referred to our nice, carpeted, windowed and well-furnished “portable buildings” on a wonderful California community-college campus as “containers,” I was offended.
Maybe she was right.
These were classrooms, not a place to live, invest, subsist, flip, invest, etc. At least, I hear the insulation is good!
she said. ‘Just don’t plan to make a profit on it in the next 12 months.’”
These clowns just pull statements like that right out of their butt’s. She has no idea what in the hell she is talking about, and some poor fool will follow right along. Lady 12 months from now it will be much worse!
What happened to the old days when you were advised not to buy a place if you didn’t plan to live in it for at least 3 years? These people nust be very young, or have a very short term memory.
What happened to living in a place a minimum of 5 years before break-even?
Yes, 5 years was the rule of thumb. Using inflation & cost of living increases as your basis for estimating future appreciation, it would take five years of appreciation to recoup your closing costs on both ends, realtor commission, maintenance, etc. It is never wise to overestimate the appreciation rate, unless of course you are a speculator. In that case you should be smart enough to know that in the short term, you could easily lose money by selling prematurely. All of these flippers are mere gamblers, but stupid enough to think they could keep rolling the dice and hitting their numbers indefinately, without rolling a 7 and loosing what they had left on the table. Those that were smart enough to know that a good thing doesn’t go on forever cashed their chips in long ago. Only the fools or desperate are still playing the flipper game. Only problem is that most all of these idiot flippers are using borrowed money to gamble with! HA, HA, HA.
Someone in San Fran recently matter-of-factly advised me that “2 years” is the generally recommended minimum to live in a place in order for it to be financially worthwhile.
I still remember the old 5-year rule. My version of it was a bit longer because I don’t care for maintenance and because I have a knack for uncovering good rental opportunities.
The Carolina coast was really an undiscovered treasure. Another example of a nice place spoiled by out of control housing price inflation.
Most of that is largely the movie industry’s fault. De Laurentiis set up his movie studio in Wilmington in the mid 80s. A lot of people came from California, saw the place, and started buying houses. Furthermore, as late 80s - early 90s were the hurricane lull, they also built a lot of stuff that no sane local would ever build on the beach.
Wrightsville beach is 10 minutes from my family’s house. I barely recognize the place anymore.
how is the asheville area of north carolina holding up.this area has had termendous appreciation and speculation in the last 4 years,mostly fueld by out of state buyers…..
see my comments above about increased inventory.
that said, the locals still feel confident about price increases continuing, and speculation is still going on. New housing starts continue to exceed growth in new households. A lot more rentals available now than in the past.
LOL! Great Info! (Gives a whole new meaning to “Trailer Trash”)
My mother still lives in Asheville - in one of the older condo complexes. Until last year or so , you would find 3″X5″ index cards taped on the bulletin boards advertising the condos for $85-95K. She said that the latest index cards were asking ~$150K for these units (10-15 years old, maybe 900sqft).
N.C. has long been a summer vacation spot for Floridians. But now they’re starting to realize that it doesn’t snow THAT much, has pleasant springs and autumns… is affordable (in most places)… and you can get home insurance…