Ivester Jackson Christie's Coastal Luxury Market Report
Q1 2022
Q1 Market Report
contents April 2022
EMERGING MARKET REPORT The Region’s Outlying Areas Emerge as Luxury Enclaves
COMMUNITY UPDATES Atlantic Beach & Emerald Isle Bald Head & Southport Carolina & Kure Beach Figure Eight Island, Porter's Neck, & Hampstead Holden Beach & Oak Island Topsail Island & Surf City Wrightsville Beach & Landfall Wilmington
FORECAST The Coastal markets continued to show explosive growth surrounding Wilmington and Wrightsville Beach.
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3rd Quarter Luxury Market Report
The Region’s Outlying Areas Emerge as Luxury Enclaves The Southeastern coastal region of North Carolina has been a hidden gem of vacationers for decades due to affordability, a smalltown feel, and immaculate beaches. In recent years, Wilmington and Wrightsville Beach have seen a dramatic increase in population with both baby boomers and young families attracted to the coastal lifestyle. Additional interest from second home buyers has increased as well, with both phenomenon putting upwards pressure on prices while decreasing supply.
This trend skyrocketed with the introduction of COVID-19 dynamics, such as remote work, with homebuyers flocking to communities with access to the outdoor activities afforded by the beaches, water, and great climate. As the stock market recovered and turned bullish, affluent home buyers emerged in record numbers with the ability to purchase second homes and investment rentals, further impacting declining inventories, first in historically popular areas like Wrightsville Beach, then spreading to more remote barrier islands over the past 24 months. Home sales on the North Carolina barrier islands north and south of Wilmington saw a near doubling in sell through from 2019 to 2020, with emerging areas such as Oak Island, Holden Beach, Surf City, Southport, and Emerald Isle seeing increasing levels of interest.
SURROUNDING AREAS & EMERGING MARKETS
The long history of high demand of the Wilmington and Wrightsville Beach area has led many people to turn to other markets for luxury inventory. The steady increase of development and money moving to these areas has flagged them as emerging markets that will continue to grow in the next few years. To read our full report on coastal North Carolina's emerging markets, please visit the link below. https://issuu.com/ivesterjackson/docs/emerging_markets_email
ATLANTIC BEACH & EMERALD ISLE One of the most popular destinations for vacationers, Atlantic Beach and Emerald Isle rest on North Carolina's northern barrier islands below the Outer Banks. Emerald Isle has seen an increase in growth and development in the last few years since COVID and is known for its uncrowded pristine beaches. Atlantic Beach is north of Emerald Isle and across from popular historic port town Beaufort, NC. While there is continual steady growth in demand in both of these areas, we see a slight drop in sell through from last year's Q1 due to the inventory shortage that has disrupted the market in 2022. While inventory has declined, sell through in the luxury price points, particularly the ultra-luxury segment above $2 million in list price, as increased year over year, as higher priced high demand areas push home seekers further up and down the Carolina Coast.
LAST 90 DAYS
ATLANTIC BEACH & EMERALD ISLE Q1 HOMES SOLD
BALD HEAD & SOUTHPORT The southeastern tip of North Carolina has historically been a popular vacation spot for decades. Bald Head's flourishing luxury market has steadily grown over the years, as opposed to less discovered areas like Southport and Oak Island. The secret was no more as we moved into 2021, with sales in all 3 areas skyrocketing in the luxury price points. As we move into 2022, sales in the lower end of the luxury market were fairly similar to last year’s robust numbers, although results from this quarter were a little lower due to low inventory. Like other areas of the coast, we see an increase in the higher end ultra-luxury homes selling this quarter compared to last year’s same quarter.
LAST 90 DAYS
BALD HEAD & SOUTHPORT Q1 HOMES SOLD
CAROLINA & KURE BEACH Carolina and Kure Beaches are south of Wilmington and Wrightsville Beach and are known for their eclectic historic aesthetic and small town charm, which has made it a popular choice among consumers looking for a unique beach town experience. Carolina & Kure had previously maintained a small beach town vibe, dotted with older family beach homes, the historic boardwalk and pier areas, along with a smattering of high rise condos. Over the past 24 months, this area’s proximity to inventory-constrained Wrightsville Beach has driven both infill developers and buyers to these southern beach towns and their popularity, along with neighboring Oak Island, has skyrocketed. New construction waterfront options now routinely exceed $2 million dollars in list price while popular planned communities like Seawatch, have seen values soar to prices in excess of $2 million for waterfront homes, and as much as $1.4 million for off water offerings with beach access.
LAST 90 DAYS
CAROLINA & KURE BEACH Q1 HOMES SOLD
FIGURE 8, PORTER'S NECK, & HAMPSTEAD Figure Eight Island, Porter's Neck, and Hampstead are north of Wilmington. Porter's Neck and Hampstead are two emerging markets that are developing a robust luxury market as well, while Figure Eight remains one of the region’s flagship upscale communities with some of the most significant coastal estate homes in the Carolinas. The sell through in this area (mainly Porter's Neck and Hampstead) have skyrocketed since last year due to the growth in development over the past couple of years, jumping from 31 to 54 sold homes in the lower end of the luxury market while the million to two million range spiked from 2 sales to 9 closings in this year's Q1 when compared to last year’s same quarter.
LAST 90 DAYS
FIGURE 8, PORTER'S NECK & HAMPSTEAD Q1 HOMES SOLD
HOLDEN BEACH & OAK ISLAND Holden Beach & Oak Island are along the far south edge of North Carolina and southwest of Wilmington. Both of these markets have grown tremendously throughout COVID but saw unprecedented activity moving into late 2020 and throughout 2021. In Q1 ‘21, there were 75 homes sold in the midmarket/lower luxury range followed by a 24% increase to 99 homes sold this past quarter. The segment between $1M-2M market saw an impressive upward spike between last year and this year of an additional 10 homes sold. What used to be the exception, a million dollar closing, is now routine, with numerous homes closing in the $1.3-1.7 million range with the quarter seeing one sale over $2 million in price.
LAST 90 DAYS
HOLDEN BEACH & OAK ISLAND Q1 HOMES SOLD
TOPSAIL ISLAND & SURF CITY Topsail Island is a barrier island 45 minutes to an hour north of Wilmington that includes the beach town of Surf City as well as North Topsail Beach. Topsail Island has long been a vacation spot favorite and Surf City is one of the most popular cities on Topsail Island. There was a 7% increase in sales in the midmarket range from last year's first quarter to this year’s first quarter. In the $1-2M range, there was a 250% increase from 4 to 10 houses and a 200% increase in the ultra-luxury range from no sales in last year’s first quarter, to 2 closings this year. This market has been identified as an emerging luxury market in terms of price appreciation, so even with the inventory shortage, it's continuing to grow draw heavy interest in the higher price points.
LAST 90 DAYS
TOPSAIL ISLAND & SURF CITY Q1 HOMES SOLD
WRIGHTSVILLE BEACH & LANDFALL Wrightsville Beach is the furthest eastern part of Wilmington and one of the most popular beaches on the East Coast, known for pristine beaches and a great atmosphere. Landfall is a flagship gated golf course community in Wilmington, situated between Wrightsville Beach and the intracoastal waterway. There was a 50% drop in sales from 2021 to 2022 in quarter 1 in the midmarket range, primarily due to acutely tight inventory conditions and the sudden rise of prices in Landfall. There was a slight drop in the 2M+ range, but the $1M-2M range stayed roughly flat from year to year for the first quarter. With prices rising significantly, the inventory of luxury houses at the top end has increased, which is atypical considering most areas have seen declines.
LAST 90 DAYS
WRIGHTSVILLE BEACH & LANDFALL Q1 HOMES SOLD
WILMINGTON Wilmington is in the southeastern corner of North Carolina and is a prominent historic port city with it’s thriving riverfront dining and shopping scene. Known for it's well-preserved historic downtown and being the hub to the region’s popular beaches, Wilmington has been a popular vacation spot since the 1700s. The midmarket price segment stayed roughly the same from last year with sell through flat on limited inventory, but the $1M-2M ranged doubled in the first quarter from last year. There was also a 50% decrease in 2M+ homes sold as compared to last year (albeit on a small sample size), leaving 10 active homes on the market over $2M.
LAST 90 DAYS
WILMINGTON Q1 SOLD
COASTAL MARKET FORECAST With historically low interest rates driving investment and second home vacation activity near the beaches, its likely that demand in that price segment may finally cool as we crest 5% mortgage rates. With limited inventory likely propping up home prices well into 2022, this dynamic may have some impact in returning the lower price ranges to feature more inventory selection. The luxury and ultra luxury segments continue to be driven by high relative equity market valuations, as well as continued strength in the remote work dynamic, something that looks like it is here to stay. Businesses have become accustomed to their professional staffs and executives working remotely, and given the attractiveness of the lifestyle, its likely this trend will continue to drive demand for luxury coastal properties. Approximately 50-60% of these transactions are funded with cash, which makes them less interest rate sensitive than the ranges below $1 million in price. The Carolina coast also remains relatively attractive in terms of relative home pricing in comparison to places like southeast and southwest Florida.
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