Regional raw land sales on the rebound

Sep 15, 2012

Story by: J. Elias O’Neal, posted on WilmingtonBiz.com

A byproduct of greater Wilmington’s current multi-family bonanza is gaining steam, particularly in New Hanover County.

Sales of raw, or undeveloped, land are on the rebound – a direct result of multi-family units and apartments planned across the region as well as cash investors taking advantage of low prices in high-growth locations, according to area brokers.

“There has been a noticeable increase in raw land sales in the area,” said Jack Kilbourne, a broker with Wilmington-based Maus, Warwick, Matthews & Co. “A lot of it has to do with the upward swing in apartment development.”

Since the start of the region’s economic recovery nearly two years ago, Kilbourne said he has closed on five tracts – all exclusively for various new multi-family developments and existing apartment expansions in Wilmington. That includes 11 acres near the intersection of Greenway Avenue and Lullwater Drive for Wilmington developer Adam Sosne’s Camden Forest, a student centered multi-family development near the University of North Carolina Wilmington that closed Sept. 4 for an undisclosed amount.

“People are encouraged by the market right now,” Kilbourne said. “They see the demand, and sellers have realized what the market price for their land is and are ready to price their property to move.”

The trend is especially ripe in New Hanover County, where property values have dropped more than 15 percent, according to the latest data released by the county appraiser’s office.

Other brokers point to improving housing sales in northern Brunswick County as having strong growth potential for future raw land sales. For example, the Ploof Road property in the Westgate development in Leland is seeing some activity for potential development.

But southern Brunswick County and most of Pender County may have a ways to go compared to the pace of the raw land sales of their surrounding neighbors.

“The days of buying large acreage for expansive subdivisions are not going to happen for a while until the region’s housing inventory starts to decrease,” Kilbourne said. “So the activity we’re seeing in the market is mostly in New Hanover County with some activity in north Brunswick.”

And while property values are not indicative of the sales price for land, they do give investors leverage and a better idea about an asking price.
That means in some cases the land in New Hanover County is now priced hundreds of dollars less per acre. And with the low prices come numerous investors looking for property – especially cash investors.

“The lion’s share of buyers have cash,” said Hill Rogers, principal broker with Wilmington-based Cameron Management Inc. “They have either raised the cash or are investing on behalf of a hedge fund.”

View original story at the Greater Wilmington Business Journal.