Real Estate Q&A: Dave Spetrino
Real Estate Q&A
with Dave Spetrino, 2018 Executive Officer of the Wilmington-Cape Fear Home Builders Association
How did 2017 compare to 2016?
At the end of May, the Wilmington-Cape Fear Home Builders Association and the Cape Fear REALTORS® released the 2017 Cape Fear Area Housing Economic Climate Report. This marks the third year that both Associations have worked collaboratively to bring such an invaluable report of data and information together for our collective memberships.
Key Facts & Figures
From a National perspective, we saw a total of 817,319 permits, which is 9% higher than what we saw in 2016. On a statewide perspective, North Carolina saw a total of 46,850 permits, which is 9% higher than what we saw in 2016.
Looking locally, in Brunswick County a total number of 2,491 permits were issued in 2017. These numbers represented a 25% increase from 2016. This was expected as Brunswick County is still seeing a tremendous amount of investment and growth within the County, and the overall market has expanded greatly. In New Hanover County 1,909 permits were issued in 2017. These numbers represented a 10% increase from 2016. These trends were expected as we are seeing more and more infill development projects and smaller developments come out of the ground. At the same time, 2017 marked the first full YTD where construction numbers were captured in Riverlights™. In Pender County, 499 permits were issued in 2017. These numbers represented a 5% decrease from 2016. This slight downward trend was expected as in 2016 and early 2017 much of the supply side of buildable lots transitioned over to housing starts. As we moved into the latter part of 2017 and early 2018, we are witnessed many of the developments that were working through the permitting stage now beginning to break ground. Over the course of the fall, we should see some of the inventory pressures ease.
One new item that we put together to highlight this year was “Heat Maps” for each County that show the overall construction activity represented in a geographical format for each County.
On page 23 & 24 of the report, you can view these maps and get a true sense of where most of the construction activity is happening. The major key within many of these concentration areas is the availability of water and sewer, and location to services, as it is the consistent driving factor for development.
From the Homebuilder’s perspective in , we will see the Wilmington area experiencing modest gains for single-family construction. We will see the markets continue to expand outward along with water and sewer infrastructure projects. We are also seeing stronger wage growth, which in return is good for consumer spending and housing demand. However, at the same time, we will continue to see some of the same constraints carry over from 2017 such as supply-side bottlenecks in the form of labor and rising building material prices. For example, tariff increases on Canadian softwood lumber have been enough to drive up the price of an average new single-family home by more than $6,000 and the market value of an average new multifamily housing unit increase by roughly $2,400. Preserving the affordability of housing is our top priority, but with labor gaps and regulatory overreach at all levels, housing must consistently be on the defensive side. While the overall outlook is positive for housing, these issues will continue to provide challenges for our members in 2018 and more than likely as we enter 2019.
What do you see 5 years from now?
In our industry it is hard to predict what is going to happen in 5 years – But I think the Key Take Away statement above holds true for a while, particularly as we move into 2019.
Below are some things that we believe we still hold true in any economic state.
Location, Location, Location still reigns king when it comes to the local real estate market. When you look at what is selling quickly much of it is due to its location within the area. Sellers who understand their product and their likely buyer, coupled with buyers who understand their own needs and have done their research are efficiently finding one another. Access to information either through real estate professionals or internet-based applications further support the overall buying process.
We have also seen buyers being more patient when entering into the market. We are seeing more and more buyers that have done their homework, know exactly what they want and are willing to wait for that perfect house – perfect location. This may change once prices or interest rates rise.
Looking at the purchase decision – buyers really want “convenience.” They want to be in or around easy-to-get-to neighborhood services like restaurants, shopping, movies, or just have convenient access to the places they spend the bulk of their time when they are not at home.
Retirees will continue to be the dominant factor in our market, and those buyers will continue to abandon formal spaces while maintaining an open floor plan between the kitchen, living room and more casual eating areas. Today’s buyer is savvy and very critical in terms of a home’s layout and the use of space. They want to get the most out of the price of the home and are looking to utilize every nook and cranny with minimal waste.
How many members are part of your organization? Has your organization seen growth this past year?
The WCFHBA has seen steady growth since the beginning of 2016 and into 2017. In November of last year the HBA hit a major milestone reaching 1000 members, thus putting us as the 2nd largest HBA in the State. From a YTD 2017 perspective we saw a 13.2% increase in our overall membership, with a retention rate of 84.8%. As with any membership based organization this has somewhat fluctuated as we moved into 2018, but overall we are still seeing a lot of interest in HBA, as I believe we provide a good product and show a positive value to our members.
What are the benefits of being a part of your organization?
Here is a direct link to our overall member benefits – http://www.wcfhba.com/membership-benefits/