While economic factors such as inflation and interest rate changes are expected to impact several sectors in the Wilmington area this year, some signs and local professionals in those industries show optimism about the possibility of continued growth.
The real estate market in New Hanover, Brunswick and Pender counties this year won’t look like the start of 2022, Realtors said.
Last year, real estate sales “were moving at a record-setting speed. Homes sold within hours with increased multiple offers, sometimes in the double-digits above asking price. Cash was king, and the low interest rate made it possible for many buyers to enter the market. Demand was at an all-time high while buyers rode the wave of working remotely and had the ability to change their geographic location to warmer climates,” stated Ea Ruth, the 2022 president of Wilmington-based Cape Fear Realtors, in a December email.
But the 2023 forecast suggests a 5% nationwide average decrease in homes sold compared to 2022.
“However, the demand in the greater Wilmington area continues to outpace the supply, which may continue to maintain the current prices,” Ruth said. “We may see some beach town prices adjusting to accommodate for the higher interest rates but most likely no more than 5% on average.”
Toward the end of December, Cape Fear Realtors shared its November numbers in a news release, which stated, “Compared to October, we are seeing a continuation of the cooling housing market. The effect of the higher interest rates can be seen in the heavy decrease of pending sales and the increase of months’ supply of inventory. Even though there is a smaller decrease in new listings, buyers are delaying their home purchases in hopes interest rates will drop.”
According to the release, the delay was causing many sellers to hold off on listing their homes because of weakening buyer demand.
Ruth said in the release, “According to the most recent Real Estate Forecast Summit, Raleigh came in second place for cities that are expected to outperform other metro areas. I believe the market in the Cape Fear region will remain somewhat competitive and favorable due to the tight inventory and high demand to live and visit southeastern NC. Based on the history of the Cape Fear community, we can expect to follow the trends of Raleigh’s performance based on our proximity.”
Higher interest rates and other economic factors are also expected to impact commercial development and the building of apartments this year in the Wilmington area.
“I think you will see fewer starts for new commercial development in 2023, as compared to the past four to five years,” said Hill Rogers, broker in charge of Wilmington-based real estate and development firm Cameron Management Inc. “This is primarily the result of higher interest rates, higher construction costs and a slowing economy. Until the Federal Reserve actually stops raising rates, bank lending for new projects will be a challenge.”
McKay Siegel, partner with River Place and The Range on Oleander developer East West Partners, said at the end of December, “It would be very difficult right now to start a new development.”
But those projects where work has started, such as The Range on Oleander apartment community, are already financed.
Rogers said on the bright side, real estate occupancy and supply and demand fundamentals “appear to be stable, with the exception of large office buildings in major cities.”
The impact of job losses in the tech sector “won’t be known until we get deeper into 2023, which will heavily weigh on the office sector. Demand for small office space appears to be robust, but I would expect that to slow down somewhat.”
He said the Wilmington area should continue to experience steady population growth and hopefully avoid significant job cuts, while some industries, such as energy, are expected to see job growth.
“A slowdown in 2023 is not unexpected,” Rogers said, “and I think everyone in our industry is prepared for it.”
Major infrastructure projects are either already underway or slated for planning progress in 2023. Arguably the most visible infrastructure project – sorting out a replacement for the Cape Fear Memorial Bridge – certainly won’t get built this year. However, as officials wrangle to track down funding for a project that could cost up to $900 million, engineering work is underway to consider the feasibility of combining the bridge replacement with the city’s plans for rail realignment.
Though still several years out, analytic work is also afoot for another massive infrastructure project: Wilmington Harbor Navigation Improvement Project. The estimated $846 million plan would deepen and extend the channel to give the Port of Wilmington a competitive advantage. U.S. Army Corps of Engineers officials are overseeing a study that’s key to moving the project forward that will wrap in 2026. An ongoing port project under construction, phase two of its refrigerated container yard, should open by August.
In December, the N.C. Department of Transportation announced the timeline for the second portion of the Hampstead Bypass would be accelerated. Construction on this leg of the project, from Interstate 140 to N.C. 210, has tentatively moved up from fall 2026 to summer 2025. Early last year, construction commenced on the first portion, from N.C. 210 to north of Hampstead, and should wrap up by 2026.
-Johanna F. Still
Last spring, the North Carolina economy regained all jobs lost during the pandemic. Job gains continued to climb throughout the remainder of 2022, with demand for workers prompting heightened labor market competition.
Job numbers in the Wilmington region steadfastly crept up, reaching 141,000 as of November 2022 – the latest data available as of press time – compared to 134,900 in February 2020.
Despite the Fed’s historic interest rate hikes last year, labor conditions have remained steadfast. “The labor market is just not cracking and has not shown any real sign of weakness,” said Mouhcine Guettabi, regional economist at the University of Wilmington North Carolina, in a Dec. 5 interview.
Guettabi predicts a cooling will be noticeable by mid-2023. Consumers will eventually slow spending and tighten up, which will prompt employers to react accordingly. But thus far, companies may be “hoarding” employees from fears of the difficulty in getting them back, should conditions improve.
Local hiring has not yet shown signs of slowing, Guettabi said. “At the local level, we’re not really seeing much evidence of that,” he said.
-Johanna F. Still
Local film leaders raised their glasses to a successful 2022 as they began to anticipate at least a moderate number of projects in the new year.
The year 2022 “was another good year for us,” said Johnny Griffin, director of the Wilmington Regional Film Commission. “Although we don’t have final numbers, [Wilmington-area project spending] should be just under $200 million.”
Although Griffin said he doesn’t know what’s on the horizon, he said any of the TV series that have shot here recently could be renewed for a further season and choose to return to the Port City area. Those series are Welcome to Flatch, Hightown and The Summer I Turned Pretty.
“We feel good about the likelihood of The Summer I Turned Pretty,” he added.
The first and second seasons, both shot in Wilmington, represent the first two books in a trilogy. It would make sense for the project to return here to film the third, but there’s no green light yet, Griffin said.
“Any one of these series shooting here again would be a sizeable chunk of money,” he added.
He and others have had conversations with studios about other possible TV series and feature films. One they’re keeping an eye on is a possible renewal of the Wilmington-shot Florida Man, which was filmed in 2021 and is scheduled to stream on Netflix in 2023.
As always, Griffin said, studios make their decisions as to where to film on how well a location fits their needs and their budget parameters.