Ivester Jackson Christie's Coastal Luxury Market Report
Q2 2022
contents Q2 Market Report | July 2022
EMERGING MARKET REPORT Emerging Luxury Encaves
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 Market is Slowing- And Here's Why
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3rd Quarter Luxury Market Report
Million Dollar Luxury Range Remains Active as Ultra Luxury Segment Shows Signs of Cooling After 2 years of an extraordinary seller’s market due to the mass relocation of families working remotely and historically low interest rates, the coastal luxury market is beginning to show signs of a shift. Despite some signs of lowered demand in the upper segment of the market, Wilmington and the NC Coast remain transformed as emerging areas such as Carolina Beach, Kure Beach, Topsail Island, and the southern barrier islands, continue to show strong demand in the $1 million to $2 million range in list price.
Entering Q3, days on market, which had narrowed to less than 30 days in many ranges and areas, have now edged back up in some areas, while a substantial number of price reductions have manifested on homes that may have been listed at peak prices which now attract buyers at slightly more reasonable levels. Mansion Global recognized Wilmington as the #1 emerging luxury market in the country. Wilmington grew exponentially during the pandemic and continues to draw people from across the country, particularly from the West Coast and Northeast. As the Wilmington and Wrightsville Beach luxury market saw scarce supply conditions, buyers migrated up and down the coast, causing booms in the nearby barrier islands. As such, home sales on these nearby 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 is famous for its pristine, emeraldcolored beaches and Atlantic Beach, north of Emerald Isle, is near popular Morehead City and across from the famous historic port town of Beaufort, NC. Even as interest continues to grow in the emerging luxury market here, conditions moving into quarter 3 have leveled off but still show relatively low inventory (55 active listings after a quarter which saw 102 closing in the luxury segment).
LAST 90 DAYS
ATLANTIC BEACH & EMERALD ISLE
Q2 Homes Sold
BALD HEAD & SOUTHPORT The southeastern tip of North Carolina has historically been a popular vacation spot for decades, but its luxury market showed mixed results. Southport and Bald Head Island showed declining sell through in the $500-999k range, yet the million dollar range jumped, mirroring much of the coast with 19 homes closing vs just 9 in Q2 last year. The ultra luxury segment showed a slight decline from 5 homes closed over $2 million to 3 in the just completed Q2.
LAST 90 DAYS
BALD HEAD & SOUTHPORT
Q2 Homes Sold
CAROLINA & KURE BEACH With its close proximity to Wilmington and Wrightsville Beach’s escalating property values, the Pleasure Island area of Carolina and Kure Beach may have benefitted more from the pandemic than any nearby coastal destination. Long known for it’s relaxed vibe and small town beach atmosphere, this area’s real estate market has seen major jumps in property values as well as unit sell through. The area saw a jump from 62 homes sold to 92 in the midmarket range just below $1 million in list price, and the luxury market sell through between $1 million and $2 million in list price doubled in sales from last year’s Q2 to this year’s. New construction waterfront options now routinely exceed $2 million dollars in list price while significant infill redevelopment is occurring in both Carolina and Kure Beach’s, with some off water offerings topping the $1.5 million range.
LAST 90 DAYS
CAROLINA & KURE BEACH
Q2 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, 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 activity in this area skyrocketed this year, with sales jumping from 51 in 2021 to 63 in 2022, with under contract and active listings significantly higher than 2021 quarter 2. Growing inventory inland in both Hampstead and Porter’s Neck, contrast what have been tight inventory conditions on exclusive Figure 8 Island. There are currently 5 ultra-luxury homes on the market above $2 million.
LAST 90 DAYS
FIGURE 8, PORTER'S NECK & HAMPSTEAD
Q2 Homes Sold
HOLDEN BEACH & OAK ISLAND Holden Beach & Oak Island comprise the South Brunswick Islands southwest of Wilmington. Both markets have grown tremendously throughout COVID, with unprecedented activity moving into late 2020 and throughout 2021. The upward sell through trend in units and appreciation in sales price continue to climb in the just completed Q2, as we see a 13% increase in the midmarket homes sold and 4% increase in the luxury segment. Inventory has climbed to 51 homes over $1 million in list price, yet 27 closed in the second quarter, equating to roughly 5 months in inventory, one of the key reasons prices still remain relatively affordable compared to Wrightsville Beach.
LAST 90 DAYS
HOLDEN BEACH & OAK ISLAND
Q2 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. In the mid-market and lower luxury range, there was a 24% increase in unit sell through, with 96 homes closing in the range just below $1 million, and another 25 closing over $1 million (compared to 20 in last year’s Q2). Topsail’s conditions continue to mirror the South Brunswick islands, with both areas seeing significant piggy back appreciation from proximity to Wilmington yet offering values in the million dollar range.
LAST 90 DAYS
TOPSAIL ISLAND & SURF CITY
Q2 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. In close proximity just inland, Landfall is a flagship gated golf course community in Wilmington, situated between Wrightsville Beach and the intracoastal waterway. There was a 33% drop in sales from 2021 to 2022 in quarter two in the midmarket range, mostly due to just a scarcity of inventory in this range under $1 million. Like the balance of the coast, the range just above $1 million and between $2 million in list price, remained the sweet spot in this area as 26 homes closed in Q2 vs 20 last year. The ultru-luxury range led the region with 8 sales over $2 million, yet saw a drop from 12 sales in last year’s Q2.
LAST 90 DAYS
WRIGHTSVILLE BEACH & LANDFALL
Q2 Homes Sold
WILMINGTON Wilmington saw a robust second quarter in both the mid-market segment below $1 million as well as the sizzling range just above $1 million in list price. 47 homes closed in that price range vs 32 last year, and increase of almost 50% year over year. The midmarket segment saw an increase of roughly 40%. Both price segments ended Q2 with less than 90 days inventory available, despite the recent uptick in mortgage rates.
LAST 90 DAYS
WILMINGTON
Q2 Homes Sold
COASTAL MARKET FORECAST Million Dollar Range Remains Active While Overall Luxury Market Heads Towards More Balanced Conditions After two historically robust selling years at the coast, rising mortgage rates and financial market volatility have finally brought a small degree of cooling to the sizzling coastal real estate market. That said, several segments continued to attract heavy activity, namely the high demand areas in the price ranges between $600,000 and $2 million in list price. In six of our eight coastal communities covered in this newsletter, this price range saw increases in sell through vs last year, at a time when much of the country is cooling down. Inventory has finally ticked upwards, albeit in some areas, there still remain less than 30 days’ supply. Price decreases have become a more visible trend, yet this is not necessarily a reflection of a downward trend in closed prices but rather a reduction in what was already a premium priced offering to begin with. This return to more normal conditions will ultimately impact even the still hot segments of the luxury market, yet demand continues to support the appreciation that has occurred the past two years, it just may temper continued double digit appreciation for the remainder of this year to a more balanced single digit level.
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