LUXURY MARKET REPORT
Coastal | Q3 2023
contents Q3 Market Report | October 2023
COMMUNITY UPDATES - Atlantic Beach & Emerald Isle - Bald Head & Southport - Carolina & Kure Beach - Figure Eight Island, Porter's Neck, & - Hampstead - Holden Beach & Oak Island - Onslow County - Topsail Island & Surf City - Wrightsville Beach & Landfall - Wilmington
FORECAST The Slowing Market Still Facing Tight Inventory
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3rd Quarter Luxury Market Report
New Hanover County Statistics
In the first graph, we compared the percentage of conventional loan financing versus cash (other categories were minimal) and the mid market segment saw a 50/50 percentage split between cash and conventional purchases, as investors can often park cash in investment properties. The ultra luxury ($2M+) was predominantly cash, more often than not due to out of state buyers coming from higher value property areas who can usually pay cash for properties here at the coast. Examples of this were the transactions above 10 million this quarter, which both closed as cash transactions. In the second graph, we see the rate of showings over the last 90 days and the peak of showings was in August, with a final spike in the end of September as the summer market came to a close. The trend line for the last 90 days in New Hanover County is fairly flat despite the week to week fluctuations, which indicates that demand is still there, albeit likely to taper as we head toward year end.
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. There is a significant jump in the closed transactions from last year to this year’s summer quarter in the midmarket. $1 million to 2 million market as market trends stabilize and experience a slight decrease following the frothiness seen during Covid’s housing burst. However, ultra-luxury market above $2 million in value experienced a 33% increase in the second quarter.
LAST 90 DAYS
ATLANTIC BEACH & EMERALD ISLE
Q3 Homes Sold
BALD HEAD & SOUTHPORT The southeastern tip of North Carolina has historically been a popular vacation spot for decades. The mix of historical significance and coastal beauty has made this area highly desirable. The mid-market remained exactly the same from 2022 to 2023, with the luxury market experiencing a slight increase in the summer quarter of 2023 and the ultra luxury market having a slight decrease. Inventory continues to be tight in these areas, as with many other regions as it struggles to match normal market rates.
LAST 90 DAYS
BALD HEAD ISLAND & SOUTHPORT
Q3 Homes Sold
CAROLINA & KURE BEACH With its proximity to Wilmington, the ferry to Southport, and the limited inventory and price appreciation of Wrightsville Beach, the Pleasure Island areas of Carolina and Kure Beach have become a highly sought after coastal destination. Long known for its 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 $600,000-$1 million, more interest rate sensitive, segment showed an 11% decrease in the third quarter of 2023 when compared to that of 2022. The $1 million-$2 million category showed a 8% decrease in closed transactions, and the ultra-luxury segment also experienced a slight decrease in sold transactions from 2022 third quarter to 2023 third quarter.
LAST 90 DAYS
CAROLINA BEACH & KURE BEACH
Q3 Homes Sold
FIGURE EIGHT, 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 Island remains one of the region’s flagship upscale communities with some of the most significant coastal estate homes in the Carolinas. Inventory continues to remain tight in the third quarter as the active listings went from 57 in the second quarter of 2023 to 30 active listings in the midmarket segment. All three areas saw substantial growth over the past year, with a 16% increase in $600,000-$1 million market from 2022 to 2023, a 50% increase in the $1 million-$2 million segment and a 50% increase in the ultra-luxury segment.
LAST 90 DAYS
FIGURE 8 ISLAND, PORTER'S NECK & HAMPSTEAD
Q3 Homes Sold
HOLDEN BEACH & OAK ISLAND Holden Beach & Oak Island comprise the South Brunswick Islands southwest of Wilmington. Holden Beach was voted number one family-friendly beach several years in a row and remains one of the more restful and residential islands. Oak Island became inhabited in the early 19th century after Fort Caswell was constructed in 1838. It grew slowly, but by the 1930s, it had become a popular beach and hunting destination. Both markets have grown tremendously throughout the last few years. These coastal islands experienced a very slight increase in the $600,000-$1 million market segment, but a minimal decrease in the $1 million-$2 million and $2 million market segments, as inventory diminishes and struggles to keep up with the demand.
LAST 90 DAYS
HOLDEN BEACH & OAK ISLAND
Q3 Homes Sold
ONSLOW COUNTY Located north of Wilmington, Onslow County was first created as Onslow Precinct in 1734 and then became a county in 1739. Jacksonville sits at the country seat and features a large military population due to Camp Lejeune, a large military base. Onslow County experienced a similar second quarter from 2022 to 2023, with a 2% increase in the $600,000-$1 million segment and a 7% increase in the $1 million-$1.99 million segment. The $2 million plus segment went from 0 sales in 2022 to 1 sale in 2023 as the luxury market slowly but steadily expands in Jacksonville.
LAST 90 DAYS
ONSLOW COUNTY
Q3 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. Interestingly, all price points in these areas experienced a decline in closed transactions except for the ultra luxury market. The $600,000 to $1 million saw a 20% decrease and the $1 million-$2 million saw a 22% decrease, while the smaller market above $2 million remained exactly the same in closings.
LAST 90 DAYS
TOPSAIL & SURF CITY
Q3 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. Just a few minutes inland sits the prestigious Landfall community. This is a flagship gated golf course community in Wilmington, situated between Wrightsville Beach and the intracoastal waterway. In the $600,000 and $1 million market segment, there was a 75% decrease from the third quarter of 2022 and the third quarter of 2023. The $1 million-$2 million market saw a slight decrease in 2023, going from 24 to 21 and the $2 million plus segment saw a 17% increase in 2023.
LAST 90 DAYS
WRIGHTSVILLE BEACH & LANDFALL
Q3 Homes Sold
WILMINGTON Wilmington is a historic port city along the Cape Fear River that features three gorgeous islands. The historic artistic culture is complemented by the small beach town aesthetic offered by toprated pristine beaches at Wrightsville Beach, historic Carolina Beach, and Kure Beach. The art, music, food, architecture, history, and natural beauty of Wilmington make it the #1 emerging market in the US (Mansion Global, 2022). The $600,000 and $1 million market segment saw a 5% decrease in the third quarter of 2023 from the third quarter of 2022. The $1 million-$2 million market increased by 7%, going from 41 to 44 and the $2 million plus segment saw a 9% decrease in 2023.
LAST 90 DAYS
WILMINGTON
Q3 Homes Sold
COASTAL MARKET FORECAST The Slowing Market Still Facing Tight Inventory As in previous reports, limited inventory and volatile interest rates remained relevant factors in the third quarter’s market trends. However, the market is beginning to see a shift that is resulting in higher days on market and more price reductions along the way. The Wrightsville Beach, Landfall and Wilmington markets remain desirable to buyers, particularly in the $600k-$1m price range. The most recent reports show inflation at 3.7%, with sights set on 2.4% as a 2024 average. Achieving favorable inflation numbers should help interest rates stabilize. The Dow Jones Industrial remained relatively consistent throughout the quarter despite a handful of volatile trading days. Interest rates linger in the 7.25%-8% range for now and many consumers seem to have reached a point where they are taking their time, resulting in the aforementioned increased days on market. At the conclusion of the third quarter, many of the key markets represented in this report have more active inventory than pending transactions. In most price segments, this represents a rebalancing of the market to what are overall considered healthy market conditions, with many price segments representing less than 90 days of inventory. While price decreases are beginning to take place, many of these are occurring with properties that came to market at historically high price points, often above trailing comps, and thus decreases may not reflect a decline in sold values so much as a mere lessening of appreciation. These results are similar to what is happening elsewhere in North Carolina. Financial markets continue to see levels that are three times greater than ten years ago, and luxury real estate continues to not only remain a stable investment, but one in which owners have multiple options in the case of secondary and investment properties.
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CHECK OUT OUR EMERGING MARKET REPORT! 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. To read our 2023 report on coastal North Carolina's emerging markets, please visit the link below. https://bit.ly/3rps3PT
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