Crystal Ball for Current, Local Real Estate Trends

Every week, the team of Brokers at Carolina Plantations is asked if this is an excellent time to buy or sell. Since timing is just about everything in life, here are some crucial factors about our market here in Coastal North Carolina (Wilmington & Brunswick County). What we need to know about the market here by no means should or could be relatable to any other market, for we know our market and only our market.

crystal ball showing 2022/2023 Real Estate Trends with hands of a woman gypsy

What We’re Seeing

Doug spoke with two builders recently, and both said that the increased costs in building products have hardly come down. Yes, it was expected to drop; however, demands remain incredibly high for new homes in our area. In the spring of 2021, our region saw a surge of buyers coming here and scrooping up homes left and right. It was similar (from what we heard) to the Western Land Grab of 1889. This unexpected tidal wave of buyers just depleted our usual level of homes on the market. Most of the demand was fueled by COVID-19; however, one should keep in mind that Coastal NC is still one of the Top 3 Retirement destinations on the East Coast. With little to no inventory of homes to sell, buyers turned to builders despite the increased pricing of lumber and virtually all building materials.

Good Examples

  • Our firm helped launch the building career of a local builder in our area in 2019. Doug spoke with David last week, and in early 2020 (pre-COVID), he was in the process of building ten homes, which is excellent for a small builder. Today, he and his team have 30+ homes under construction, and the demand has not slowed for them as we still have very little inventory of any kind of home to sell.
  • One of our long trusted regional builders, who we have worked with on over 100 homes being built for our clients over the past 12 years, is now quoting an 18-month turnaround on the completion of their homes. Two years ago, they were quoting 8-9 months for delivery of a home after breaking ground. Shortages of skilled labor and never-ending supply issues are the two caustic factors contributing to the delay.
  • With the Fed doing its jobs to slow down the economy, reports that it is affecting the real estate markets in major cities are actual, as inventories are climbing.
  • We still see multiple offers on homes and condos if the product is in good condition and reasonably priced. Bargains are not yet on the table here as we are still in a Sellers’ market along the coast.
  • We had a team meeting recently with a prominent builder in the area, and they have 17 rooftops for sale. A couple of townhomes are complete, but the homes are all under construction with a completion date of September to December. This is GREAT news as we have many buyers who have sold their homes elsewhere and need a home ASAP.
Picture on left has builders on a home and picture on right has a house with green grass and a for sale sign

Much of what we have shared with you regarding our current conditions in Coastal NC can be found in a recent Forbes article on 2022 Housing Market Predictions. This article focuses on macro while our thoughts are micro. Click Here for a good read from Forbes.

Warnings for Buyers & Sellers in our Market

Buyers

  • We do not see prices for new homes going down anytime soon. Perhaps, mid-late next year, if our country can get a grip on supply issues, but we can’t guarantee it.
  • Resales prices are already leveling off, and many knuckle-headed Sellers are finding out that their asking prices are simply ridiculous.
  • You still need to act quickly on a new or resale home. You might not have as many offers to contend with, but don’t get lazy or too confident that your green money is greener than others.

Sellers

  • Listen to your Realtor. Don’t ignore them. We provide you with real numbers, history, and statistics, so don’t toss those out and list your place at a price it will not sell.
  • Prices are declining nationwide, so don’t sit back and wait too long.
  • Know where you are going. Just don’t list and sell unless you have somewhere to move to. Rentals are almost non-existent, and prices for rentals have increased significantly.

We have shared with you some significant trends in our market, so now it is up to you to consider this information if you’re buying or selling soon. And as always, please contact our team at Carolina Plantations at 910-755-7557 for friendly, informative, and timely conversations.

To Sea or Not to Sea…

The three most common types of areas Americans like retiring to are (and not in any order):

  • Lake
  • Mountains
  • Ocean

Please note that two of the three retirement destinations focus on water – lake & ocean. Let’s see if we can delve into the subject and uncover why moving to water, particularly the sea, is such a popular move for many seeking to retire.

First, Doug’s good friends at PrivateCommunities.com, who promote retirement communities throughout the USA on their website, recently completed a survey of homebuyers who are performing research on where they plan to retire to. This first slide corroborates his insight as to the top three geographic destinations that our clientele is seeking out retirement destinations:

  • Beach/Ocean
  • Lake (generally inland)
  • Mountains

In their survey, PCR included golf as a destination; however, golf is available at the beach, the lake, and mountains. So, for the sake of this discussion, we will stick with the top three destinations. We found it interesting that 76% of those who responded to the survey indicated that they plan to depart their current state. That means 24% are intended to stay in their current state, and you can probably break that down as follows:

  • The majority, 24%, will continue to live in their current home for retirement.
  • The minority will sell their existing home and purchase another home in their current state.

But hello? Three out of four surveyed indicate they are ready to leave dodge and find a warmer, friendlier, and more economical state to dwell in during their retirement years. Guess as the old saying goes, “Last one to leave New Jersey – Please turn the lights off!

So, just what is it about the ocean that draws so many? Here is a very un-scientific assessment as to why:

  • MEMORIES – did anyone NOT go to the beach as a kid or young adolescent? Some of the world’s most incredible family vacations are spent frolicking and thrashing along America’s coastlines. Be it renting a home, staying at a friend’s house, or securing a hotel for a week. It didn’t matter where you visited if you could run and jump into the ocean, right?
  • CASUAL WEAR – You could put your trunks on at 7 am and not take them off until 10 pm. Nobody cares what you wear or don’t wear at the beach. No one cares how your hair looks or whether you shaved or not. Who cares if your shorts or jeans have a hole in them? Being at the beach means you can relax. You don’t need to press your shorts, roll your hair, spend 33 or0 minutes applying make-up, or shave. Why? Because you’re at the beach!
  • FAMILY/FRIEND TIME – Just about 100% of all families get along well when enjoying a fun vacation. Whose kids don’t like Pop-Tarts and oranges for breakfast, peanut butter & jelly sandwiches for lunch, and cheeseburgers for dinner? Mom has more time to relax as everyone is close by; Dads spend quality time playing with the kids, and the kids play nicely together.
  • WEATHER – One goes to the beach in anticipation of sunshine, which means lots of suns. And beaches, often, provide just that – sunlight. But with the sunshine comes working on your tan, boogie boarding, surfing, fishing, biking, boating, and much more.
  • MAJOR ATTRACTIONS – One of Doug’s best friends growing up in NJ was Christopher L. His family owned an amazing (yet simple) beach house in Normandy Beach, NJ (the shore). On Friday & Saturday nights, they’d looked to his older brothers Peter & Johnny to see if they would drive them to the boardwalk at either Point Pleasant or Seaside Heights. Doug & Christopher would save up their nickels and dimes so they could ride the Ferris wheel, play Skee Ball or buy some cotton candy. Was there anything better at the age of 14? And you can’t forget that beaches usually indicate you are not far from miniature golf, go-karts & more.
  • FRESH SEAFOOD – Have you ever been to Chicago and had fresh seafood? We think not. Fresh to us is being brought to the surface at 11 am and on our plates at 6 pm. Do we need to continue steamed shrimp, crab cakes, blackened Mahi Mahi, or fresh lobster?
family playing on the beach with people in the background and family posing for a family portrait on the beach

For adults looking to retire, a number of these still come into play. Perhaps one of the most significant benefits for retirees moving to the beach is if they have grandchildren. Whose grandkids wouldn’t want to visit Grandma & Grandpa at the beach? We know plenty of kids will want to visit just to be able to have that free vacation with the family at the beach.

We aren’t sure that with all the information in the following graph, but it shows that 6 of the ten most popular states to retire has an ocean. Doug guesses that Tennessee is the most popular because it offers lakes & mountains and is a shorter drive from many Midwestern states.

graph showing of where retirees retire to

If you are considering retiring near the sea, then come down soon and visit the greater Wilmington/Brunswick County area – also known as Coastal North Carolina. Here you’ll find many fantastic retirement communities and all the fun and excitement of a city (Wilmington). Plus, miles and miles of sandy beaches at Wrightsville Beach, Carolina Beach, Kure Beach, Ft. Fisher, Oak Island, and more.

picture showing coastal north carolina

No wonder Coastal North Carolina is one of America’s top retirement destinations!

Building Boom in Full Stride

home on left is only the frame of a new home and the home on the right is one that is finished and ready to move in.

If anyone says that they predicted our current real estate market correctly two years ago when Covid was spreading faster than a forest fire, we’d love to meet them. If we can go back to April/May of 2020 and be objective, we must be able to recall our country’s state, rightfully? Everything was closed, and scientists were scrambling to understand this virus. Our red-hot economy was tumbling, and nobody had any conclusive answers on the pandemic.

As people began leaving significant cities in droves, the burbs became hot hot hot – with many Baby Boomers deciding to take advantage of the prices increases and retire a bit early. This created a significant trickle-down effect on real estate in Coastal North Carolina. We were already experiencing a voracious retirement market here, but our inventory of new and resale homes was depleted in no time at all.

Carolina Plantations opened in March of 2007, and for years Doug has been touting that probably 60-70% of our client’s “build” their dream home down here. Why, you ask? Because our clients have the time and want their homes to build to their specifications, not someone else. However, when the pandemic struck, and home building prices shot through the roof (get it?), we figured that home building would slow down. Au contraire, it didn’t.

Even with the building costs up 20-30%, give or take, people are still opting to build as much today as they were two years ago. What is driving this is the lack of inventory of resale and new spec homes on the market. What we do have, though, is a supply of homesites that are just sitting there waiting for our clients to come along and place a home on them. Mind you, some of the communities are void of new or resale homesites while other communities are flush.

Let Us Help You

The team at Carolina Plantations has been working hand in hand with a myriad of builders in Coastal North Carolina for 15 years. We know where the homesites are and which builders might be the best to help you build your dream retirement home. Contact us today, and let’s get this party started!

Call us at 910-755-7557 or send an email over to Doug at Doug@carolinaplantations.com. We have long-standing relationships with the following leading builders in Coastal North Carolina. Don’t get outbid on a home or ten, BUILD your retirement home!!

Different builders in the area

Choose Your Neighbors

As we cruise through life, most adults accumulate an inner circle of friends and family. We know that this is hard to believe for some of you, but on occasion, the wife’s inner circle doesn’t always coincide with her husband’s. Wait, how is that even possible?

two couples sharing fun outdoors in their neighborhood

When and if you decide to leave the tundra of New England or the overcrowded and expensive suburbs of cities like Baltimore, Philadelphia, NYC, Boston, DC, etc. You can choose some of your future neighbors. How about that?

First, to properly engage in this conversation, we think we all should have a common platform of understanding on levels of friendship. We’d like to provide you with an example. Sally and Bob live in New Jersey, and Bob’s best friend Jeff & his wife, Sarah, live just down the street. For years, Sally has placated Bob and agreed to socialize on many occasions with this couple; however, Sally is not a fan of Jeff and cannot wait to move somewhere warm and sunny sans Jeff.

Therefore, let’s have a little fun and see if we can determine a rating system for friends and family members that you both can agree on (and please keep in mind that this works for single people).

BFF

For a couple to be given the prestigious BFF classification (this is Best Friend/Family Forever), both the wife and the husband must be classified as BFFs. This probably narrows the playing field considerably as most couples probably have only 1-3 BFFs in their lives. These are couples you have vacationed with before, supported during a crisis, dined with often, etc.

GF

Good Friends are people you currently see less often than BFFs, which could be due to geographic constrictions, jobs, or other restrictions. Many couples have considerable people that fall into the GF category, be it from work, the neighborhood, church, college, golf, tennis, etc.

F

Each of you has accumulated lists of friends over the years. You probably only see them occasionally, either by running into them at the store or large functions.

A

From time to time, Acquaintances could be synonymous with Annoying, for we all have a category of people that you try to avoid in life. This could be from people you work with to those you went to school with and knowledge of them but don’t hang out with often.

OK, so back to Sally and Bob, the couple from Jersey who has decided to retire to Coastal North Carolina. Sally has two BFFs, Barbara and Lisa. Barb is married to Kevin, and Lisa is single. Bob likes all three of them and has no trouble if any or all of them move to Coastal NC. On the other hand, Bob’s best buddy (BFF) is Kevin, who unfortunately annoys the ever-living doo-doo out of Sally. In essence, they are NOT welcome to move to Coastal NC, but if they must, it will NOT be in the same community as Sally and Bob – not if Sally has anything to do about it.

Two different families enjoying time together

Sally and Bob also each have one brother, and because they are family, they both agree that they would be fine if either brother or their respective wives moved to Coastal NC. Oh, and Bob’s mother, Ruth is still alive and living in an assisted living facility; however, she is not welcome to move in with Bob and Sally. However, it is possible that Ruth could move into an assisted living facility in Wilmington to be closer to family.

So, if you are thinking of moving or you’re finding the perfect place to retire to, keep in mind that you have a lot of options with who your future neighbors will be. We at Carolina Plantations are ready to assist you in your search for your dream retirement home today!

Retirement: Don’t Overdo It

A few weeks ago, Doug did an online search for “top retirement issues.” The results were not surprising and rising to the top of every list was financial issues. In essence, make sure that you have enough to retire on comfortably.

stacks of money all over the picture.

He took away from those articles a plan to expect the unexpected, as many surprises can occur in our 60s and beyond. The following is a quick snapshot of actual numbers for a person retiring.

  • Let’s say that Sally is about to retire and currently earns $100,000 a year
  • Assume Sally does not have any kind of pension
  • The rule of thumb says Sally will need 80% of her pre-retirement income
  • So, how does Sally get to $80,000 a year in retirement income?
  • Let’s assume her Social Security is $3,000 a month or $36,000 a year
  • That leaves a shortfall of $44,000
  • If Sally has $1,000,000 in stocks, she will need a 55% return annually or $50,000
  • This equation stipulates that Sally does not touch the principle
  • This would provide Sally with $86,000 a year

Here are the significant variables that could influence the above scenario:

  • Sally will need to receive a 5% return annually. More is better, however, if the market tanks. Sally will have to dig into her principle probably. That means Sally will have to rebuild that principle soon.
  • Sally’s most significant variable is her health, as her insurance and Medicaid do not cover 100% of her bills. A couple of unexpected hospital or doctor visits can quickly cause Sally to dig into her principle.
  • Children, siblings, parents, and grandchildren can also easily add to Sally’s financial obligations, as family issues can come out of nowhere and cause significant short-term and long-term financial constraints.
  • Managing debt can also be a silent killer for many. Piling up credit card debt, in particular, is more common than most of us think. Plus, the costs associated with purchasing a new home or car can also increase debt dramatically.
  • Gifts. It is pretty standard for grandparents to want to support their children and grandchildren. This could be money for a house down payment, a car, college tuition, and more. Plus, many people like supporting their church, alma mater, civic organization, etc.

In essence, most retirees live on a fixed income. There are no more overtime hours to count on, quarterly or annual bonuses, pay raises and promotions, etc. And while inheritances from parents or other relatives can happen, it is wise not to count too much on them for unexpected expenses can severely curtail your possible windfall.

Over the years, Doug has seen some retired people forced to make tough decisions regarding their finances. He guesses that they did not invest enough time and effort into laying out their expected and unexpected costs – aka budget. The results ran the gamut of selling their Dream Home and downsizing, moving back home, and getting back in the job market.

You’ve worked hard for 30-40 years, building up a nest egg so that you can retire comfortably. One last variable that can affect your financial stability is managing your ego.

yellow expensive car on left, white boat on right on the water speeding

Let’s fast forward to your retirement day, and you have $3.5M with a stockbroker, half a million in your savings, and your $475,000 is paid off. You’re rich, rich beyond your wildest dreams, and it’s time to pound your chest a little bit and let the world know so that you can go on a bit of a spending spree. Sure, you may only spend $40,000 (or more) on a new car, boat, jewelry, artwork, or a trip around the world. But for the most part, that was an expense that is either gone or probably severely devalued the minute you laid down your American Express Platinum Card.

We’ve seen professional athletes for decades sign multi-million-dollar contracts only to find out years later that they have nothing left. Be careful not to allow your ego to ruin your retirement because it can and will. Don’t become a statistic of poor judgment.

When we look back at the slide of 2008/2009, many people said that their retirement planning was sound and they were safe from unknown variables. Let those who suffered so mightily be our guiding lights to live a long and prosperous future! If you’re ready to sit down and find your dream retirement home here on the beautiful coast of North Carolina, we’re here for you.

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