Thousands of lots, entire subdivisions
Aug 13, 2012
Story by: Wayne Faulkner, posted on StarNewsOnline.com
Whole subdivisions and hundreds of lots from failed or stalled developments have come up for sale recently in a sign that a highly depressed sector of the housing market is starting a slow recovery.
Cape Fear Commercial last week listed more than 1,500 lots in 27 subdivisions, most of them in the Wilmington area, as more than 15 financial institutions dispose of their distressed assets.
“It’s a sign that we are finally working through the system and the market is resetting itself,” said the brokerage’s Brian Eckel, who is partnering with colleagues Paul Loukas and Hank Miller in the sales.
Absorption of the distressed subdivisions is one of the first steps in order for a market to rebound and to ultimately reach a point that demand surpasses supply. And that would bring about new development, the company said.
Land of the zombies
When the real estate market collapsed here in the last half of the past decade, thousands of lots that were priced to reflect a hot market were left unsold.
Brunswick County was especially hard hit as weeds took over so-called zombie subdivisions that were stopped in their tracks. There often were few if any homes constructed in those developments when the market went south.
“These subdivisions have been distressed for several years,” Eckel said.
Over the past 12 months, some of these properties are finally selling and getting interest, he said, adding that the firm already has been selling subdivisions.
For instance, the brokerage said it recently completed the sale for BB&T of 25 lots, one home and 2.39 acres for future town homes in the Andrew’s Reach subdivision off Masonboro Loop Road.
First Bank last week listed more than 700 lots in 11 subdivisions with Cape Fear Commercial, the brokerage said.
One of those subdivisions is Hawkeswater, adjacent to Belville Elementary School, and includes 79 developed lots, 320 approved lots and town homes, and an undeveloped waterfront component on the Brunswick River.
In Wilmington, the 97-lot Clarendon Park subdivision on the north side is for sale.
Cape Fear Commercial said that the vast majority of its sales have been bulk transactions – that is, an entire subdivision is sold. But the brokerage is also negotiating lot sales to builders on several projects.
Some of the subdivisions already sold and some of those in the latest 1,500-lot listing are partially developed, while some are completely developed – meaning that sewer, water and roads already have been installed.
A few are undeveloped. For instance, a development’s plans may have been approved several years ago by government entities, but there are no improvements on them, Loukas said.
Eckel emphasized that none of the properties most recently listed by the brokerage will actually be ready for sale until the end of August.
Despite the number of lots his firm is handling, Eckel said he is not concerned the market will become glutted.
“While we believe the supply will continue to grow, it won’t be at the rate of the last few months,” Loukas said.
The majority of Cape Fear Commercial’s buyers are local and regional home builders. Some national builders also have moved into the Southeastern North Carolina market, Loukas said.
The demand for lots is not even, however, the properties in New Hanover, Pender and northern Brunswick counties likely will go first, Loukas said.
“In the last two years, there’s been a lot more interest in New Hanover County. The decreasing inventory has forced people to look in Brunswick, which they were not doing three years ago,” Eckel said.
“There is a demand for lots in New Hanover,” said Donna Girardot, executive officer of the Wilmington-Cape Fear Home Builders Association. “There’s been a shortage of lots that are priced appropriately for the current market.”
More lots on the market in New Hanover is good news, she said, because developers who weren’t able to find them were going into Pender for projects.
In Wilmington, “developers are working with a lot of in-fill developments and they are finding lots anyway they can,” Girardot said.
But there are still markets, like along N.C. 211 in Brunswick, “that are littered with projects, and there are no drivers for buyers in that area,” Eckel said.
New Hanover is “starting to see people who are developing houses under $300,000 buying inventory land,” said Hector Ingram, owner of the Ingram & Co. appraisal firm in Wilmington. “There’s not much left unless you get into the northern part of the county.”
“Northern Brunswick has firmed up,” he said. “There’s a lot of activity in the $200,000 to $250,000 price range in home construction, and it’s drawing down available lots.”
He cited specifically action at Compass Pointe and Brunswick Forest.
“That residential housing under $250,000 in Brunswick County, Ingram said, “is the basis of the market coming back.”
Facts: Subdivisions for sale
Cape Fear Commercial has recently listed these subdivisions – or lots in them – for sale.
Laurenbridge – Wilmington
Seabrooke – Leland
Andrew’s Reach – Wilmington
Stone’s Edge – Wilmington
Southwynde – Southport
Ridgefield – Wilmington
River Oaks – Wilmington
Summit Ridge – Burgaw
Diamond Point – Surf City
Arrowhead – Fayetteville
Magnolia Place – Navassa
Lighthouse Cove – Carolina Shores
Shadow Creek – Swansboro
Trenney Lea – Hampstead
Sunset Reach – Castle Hayne
Richmond Hills – Supply
Olde Georgetown – Bolivia
Mill Creek Cove – Bolivia
Hawkeswater – Leland
Clarendon Park – Wilmington
Lanvale Forest – Leland
Brookstone – Bolivia
Bluewater Beach – Leland Brick
Landing – Ocean Isle Beach
Rivergate – Bolivia
Sandstone – Bolivia
Shallotte River Village – Shallotte
View original story at Star News.