Anne Gardner became CEO of Wilmington-based Cape Fear Realtors in July, head of an organization that includes more than 2,800 Realtors in Southeastern North Carolina and is on track to hit 3,000 by May. Gardner, who came to Wilmington after serving nine years as CEO of the Charlottesville Area Association of Realtors in Virginia, talks about the area’s current housing market and what might be on the horizon.
Home sales really jumped up in January – 37% more than a year earlier for the three-county region and the steepest increase for the month of January since 2006. What’s fueling all this activity?
“There are a few external factors contributing to the robust activity at the start of 2020, specifically low unemployment and declining mortgage rates. Combining 3.6% unemployment, which is a 0.5% drop from this time in 2018, and mortgage rates below 3.5%, there has been significant demand in housing across all segments and counties in our region.
January’s performance shared markers typically found in March and April, however, with our area’s mild weather and a surge in end-of-year buyer traffic and pending sales, it resulted in a record month.
The largest percentage of total sales increases for January were in the townhome/condo segment, with a 45.2% increase over 2019. With a median sales price 40% lower than area single-family homes, this uptick bodes well for housing affordability and are often first-time buyers entering the market.”
Nationally, housing inventory has dropped, and that seems to be the case locally. How much of a concern is that for the area?
“As the fastest-growing region in the state, housing demand extended beyond the tri-county area in earnest the past year, and buyers are absorbing available inventory in the surrounding areas. Inventory drops each month, and existing homes remain on the market an average of just 18 days in New Hanover County.
With regard to new inventory creation by developers and builders, the national inventory shortage is driven by a shortage of ‘land, lumber or labor,’ or any combination of the three. Nationally, labor is the biggest issue, and while the local labor market remains tight, the scarcity of land is impacting both prices and home choice most acutely in the city of Wilmington and New Hanover County.
Since we are not able to create new land, Cape Fear REALTORS is actively engaged in supporting work underway in several localities to address land use, density and housing affordability. Coupled with addressing housing shortages is the needed infrastructure improvements to support the demand for housing. We encourage policies which improve our community's ability to foster growth benefitting businesses, housing and consumers.
The region’s anticipated population boom in the next two decades is expected to double our population.
The challenges in meeting future demands are already upon us, and we are active in partnerships working to prepare the region for this growth.”
What other trends are you keeping an eye on for potential housing market impacts?
“I have frequent conversations in the community where I am asked about the impact of retirees and other demographics on our housing market. Interestingly, it is less the influx of new retirees that will impact the housing supply for the region but instead the consumers who are choosing to age in place.
The impact of this behavior is the housing stock, which would normally come onto the market as individuals are expected to downsize and leave their homes of 20 or more years are not coming into the existing home sales inventory. This exacerbates the already tight inventory and furthers the need for new housing to address capacity.
Another trend that will impact our communities is the delayed impact of millennials purchasing homes later than prior generations, due to flat wage growth and the impact of student loan debts. There is a concern that as purchasing power is impacted for this group, they remain renters longer than previous generations, or they will purchase with friends and family to combine resources. The style of home for this type of housemate need would be a twist on the most common property types presently sold in our market, a 3-bedroom, 2-bath single-family home.
The most immediate impact to our region will be the rising costs of insurance and risk to property from natural disasters. While we are encouraged by recent changes to the National Flood Insurance Program’s (NFIP) risk assessment model, which determines risk factors on a parcel by parcel basis instead of zones, insufficient coverage and uneven claim payouts are putting a strain on the flood insurance market.
The N.C. Rate Bureau (NCRB) has proposed a new private flood insurance plan for North Carolina that we are watching very closely.”
There’s a lot of ways technology is changing the real estate industry, either enhancing the home selling and buying process or disrupting how Realtors fit into the process. What kinds of things do you talk about with members about how to keep ahead of those areas?
"While every industry is now immersed in technology, there are few that approach the degree of complexity and frequent addition of new elements as that of real estate. Every element of a Realtors' business is now a technology intensive element; from lead generation and client management, property marketing -- virtual home tours, staging and drone-enabled videography -- contract and transaction management are undergoing constant evolution.
We serve the professional interests of nearly 3,000 members across the region, and each member is an independent contractor, a small business owner who is navigating these technologies in real time. We offer access to training and best practices to keep them up to date on the elements of our services, the Multiple Listing Service, property showing services, data feeds and market statistics and analysis.
Even the most up to date technology and algorithms are still only tools, and they will never replace the value of a trusted advisor and local expert. While the elements of how a client views a property may change to include artificial intelligence through augmented reality, i.e, virtual showings and drone videos only aid clients in the purchase decision or enhance the presentation of a seller’s home ..."
For you personally, you came on as Cape Fear Realtors CEO last year. What are some of your goals for the group?
"Realtors are champions of community and our work plan this year underscores our role in building strong communities. Our members are professionals who live and work in the communities we serve, and we are focused on topics impacting our members and their clients, such as: land use, transportation, housing affordability, environmental stewardship and economic development.
In each of these initiatives, we are building diverse and inclusive alliances across a broad coalition of organizations to amplify our impact. When a community of our size has several organizations approaching the same concern, it makes sense to leverage these common interests to achieve greater progress together.
While much of this work is built incrementally over many months, some initiatives just fall into place. An example is the recent collaboration with the Wilmington chamber, Business for a Sound Economy (BASE) and the Wilmington-Cape Fear Home Builders Association to host a forum of our members to meet the candidates for New Hanover County commissioners."
