Story By Teresa A. McLamb
“Jack be nimble, Jack be quick” may be a children’s rhyme, but it also appears to be the mantra of some of Brunswick County’s most successful builders and developers.
Over the past year in Brunswick County, new home sales and resales have steadily improved. Inventory (absorption rate) has decreased from 27.9 months in December 2011 to 17.7 percent in August 2012. Sales in August 2012 (297 units) were up 35 percent from August 2011 (220 units) and 10 percent from August 2007 (270 units). Sales for all of 2011 were 2,169 units, while sales through August of this year are already at 1,936 units, according to numbers from the Brunswick County Association of Realtors Multiple Listing Service Trends report.
Part of the reason for this growth appears to be the builders’ and developers’ rapid response to changing customer needs. Customers are more educated than in the past, relying heavily on the Internet to research locales and products before ever stepping foot in the county.
“We’ve learned to be more nimble,” says Shawn Horton of Trusst Builder Group, which builds in several neighborhoods including St. James, Brunswick Forest and Winding River and is also the developer of approximately 30 communities over the past few years. “Our company is building in more places than we had the opportunity to do before. In the past, we were locked in because of the market. We would buy land and camp out in one spot. Buyers are now looking for the best communities and the best land prices.”
Because of that, Trusst launched the HouseCalls program in which they build on a lot already owned by the customer or they assist the customer in finding a site and then building on it. They maintain inventory in St. James and Winding River. They’re also in Leland and Brunswick Forest.
Three of the top local builders and developers we surveyed — Trusst, St. James Plantation and Brunswick Forest — are significantly ahead of their sales goals for 2012 and ahead of last year’s sales. Trusst has sold more than 80 houses thus far this year, in prices ranging from $140,000 to $525,000 with a median price of $330,000, according to Horton.
St. James Plantation has sold 124 new lots and homes plus 63 resales thus far. The average lot price is $95,000 with a range of $55,000 to $245,000. Average home prices are $355,000 with a range of $125,000 to $1,500,000, according to Bob Duffy, real estate general manager at St. James Plantation.
Brunswick Forest has sold 140 homes and lots this year with a median price of $360,000 for the home/lot package, according to information provided by Brandy Marshall, marketing coordinator at Brunswick Forest.
St. James sales are 40 percent above their year-to-date goals.
“Our leads, tours and sales are outpacing last year,” Duffy says.
Duffy believes the improvement is due in part to the strength of the educated consumer. Buyers are better qualified and better informed and they have studied the market extensively. St. James also has acknowledged the strong role of the Internet.
“We’ve engaged folks in our social media–integrated website, which allows them to feel engaged with our active community even when they are from afar,” Duffy says.
Duffy says there are also retirees who are experiencing “frugal fatigue” in that they have waited and waited for their home to sell and have grown tired of waiting.
“They are pragmatic enough to know they’re not getting any younger,” says Duffy. “They know they need to make a move, whether they’ve sold their existing home or not.”
Duffy also has seen an increase in pre-retirees purchasing homes to use for vacation while they complete their careers.
“We’re still getting half-backs from Florida, and there is a resurgence of regional attention from Atlanta, Raleigh, Winston-Salem and folks from the mountains moving over here where the climate is much more moderate,” Duffy says.
Horton agrees that the Internet has a strong influence on the success of the market. Earlier this year, he aligned his company with Coldwell Banker Sea Coast Advantage in order to maximize the power of the Internet for sales.
“It made sense for us because I came from Sea Coast originally,” says Horton. “Sea Coast has taken advantage of the opportunities in this market to grow. Buyers are spending more time online and getting educated. They visit a few times online before they go in person, and Sea Coast has such a strong technology presence that they’re doing a good job of catching buyers.”
Brunswick Forest has seen an increase in purchases of homes and homesites.
“With the customers we talk to through the northeast and the region, their homes are selling,” says Jerry Helms, sales manager at Brunswick Forest. “They’re seeing themselves to have more of an appetite to get involved and purchase. Of course, we still get folks who tell us they want to move, but they have a house to sell. What we’re finding is that our lot sales have increased and a lot of those folks are purchasing homesites without selling their homes, whereas in 2009 and 2010, they were not going to do anything at all until they had sold their property. Now they’re doing home-equity loans and purchasing homesites they intend to build on two years from now.”
Additionally, Helms is finding that he and his agents are spending a lot of time with each individual customer and working with them to understand what best fits their needs.
“That means you really have to be in the relationship sales business,” says Helms.
Savvy builders and developers must continually evaluate their product lines and shift their products to meet consumer needs.
“We constantly listen to our clients, and if they say they want smaller square footage or they want a certain price point, we try to develop our product offering and our home styles based on what the customer wants,” Helms says.
St. James has responded to customers by diversifying their product offerings to include condos, twin villas, cottage homes and semi-custom homes in addition to lot sales.
“We’re seeing people buying cottages, townhomes and homes at an almost two to one margin over the lots,” says Duffy. “We’ve altered our product line by knowing what empty nesters are looking for. People want to be able to enjoy it. They’ve waited so long; they don’t want to buy a lot and sit on it.”
St. James has also taken advantage of its geography and size to offer amenities such as boating and fishing. Sales of dry-dock storage and wet slips for boats have increased, according to Duffy.
Horton’s company was able to purchase and repackage a subdivision, which it launched as Hearthstone. Full-scale promotion will begin shortly.
Another piece of the sales success is the level of infrastructure and amenities in these communities.
“Most of our customers are looking for highly amenitized communities,” says Helms.
From that standpoint, Brunswick Forest is in competition with St. James locally, but they are also in competition with Hilton Head and other resort locations nationally.
Horton predicts steady growth for the coming year.
“We are busy,” says Horton. “My biggest fear is a lack of inventory once everything gets bought up. What people are buying land for is ridiculous. I see home sites selling for less than I know it costs to develop it. What happens when all that goes away?”
At a recent homebuilders association conference, Charles Edsel, chairman of MarketGraphics Research Group, said that by 2017 demand will outpace supply by 2.9 million lots nationally. He also said single-family home prices will go up 6 to 8 percent in the next two years and that mortgage rates will increase in the same time period. A recent Wall Street Journal article stated that “economists are increasingly confident that home prices have bottomed out.” The article quoted CoreLogic’s chief economist Mark Fleming as saying, “we have a much better supply and demand dynamic” than in previous years.
Whether that plays out locally is still to be seen, and there are literally hundreds of developed or partially developed lots in the county, many of those in failed subdivisions that developers have pulled off the market to wait for a resurgence. Bringing those lots online could be a game changer, but it’s not likely to happen until the inventory of bank-owned and under-priced lots is gone.
Horton, Helms and Duffy are all optimistic.
“We expect to be an integral part of the expanded growth of the coastal Carolina region,” Duffy says. He expects consistent growth for the community and the club.
Horton expects steady growth for his company and the market, and Helms expects Brunswick Forest to remain ahead of pace for 2012 and to see an increase in sales again in 2013.