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Tax Credit Helps Wilmington Housing Market Rebound

Tuesday, February 9th, 2010

By Christine Dugas, USA TODAY

The Wilmington, N.C., housing market ended the year on a good note, despite the region’s tough economic times. Home sales rebounded from a slow start when a boost from the first-time home buyer tax credit kicked in. The buyers who took advantage of it accounted for 34% of home sales last year, says Mary Martin, president of the Wilmington Regional Association of Realtors.

Now that the tax credit has been extended and expanded to include repeat home buyers, agents hope it will keep sales moving. But beach property sales are still lagging: Loans are much stricter for vacation-home buyers and investors, Martin says.

HOUSING MARKET: Track the rise, fall and … rebound?

Sales status. Last year, Wilmington home sales were down 16.2% compared with the previous year. But in the last quarter of the year, sales reversed. In December, sales were up 19.8% from December 2008. The improvement has raised hopes that the market has hit bottom and may be turning around, Martin says.

Price points. The median price of houses sold was 5.6% less than a year earlier. Home foreclosures are declining. “Prices seem to be stabilizing, which is good,” Martin says.

New homes are being concentrated in the $200,000-to-$250,000 range, because those are selling, Martin says. The price range is not just desired by first-time home buyers: Older empty-nester couples are moving into such smaller homes, too.

Local economy. The unemployment rate was 10.2% in November, slightly higher than the national rate of 10% at the time.

“We’ve been more hard hit with this downturn than any of the five that I’ve experienced as an economist,” says William Hall, professor of economics at University of North Carolina-Wilmington.

The real estate development industry in particular is suffering.

“That is more than just construction. It includes finance, insurance, real estate leasing, architects and others,” Hall says.

About three years ago, economic analysts estimated that one out of five people in southeastern North Carolina had a job related to real estate development. The numbers are closer to one in 10 now, Hall says.

Hot ‘hoods. Wilmington is a historic port city. The downtown area has cobblestone streets, boutiques, restaurants and the Cape Fear Riverwalk. Many people love the historic charm, Martin says. And of late, more of them can afford to live downtown because condominiums have been built there.

The new buildings are not modern-looking on the outside, because the city requires them to fit in downtown. The price for a one-bedroom condo ranges from about $160,000 to $180,000, while a two-bedroom starts at about $200,000, Martin says.

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