Last week I went to the annual economic outlook meeting put on by the Wilmington Business Journal, so I thought I would just focus on Wilmington this month. Thank you to my neighbor Maureen and the Blockade Runner for having me as a guest at their table.
There were no surprises in September. The first graph shows average and median home sale prices. You can see that the median sale price has been increasing overall since April 2020, when the effects of COVID were first beginning to be seen. In Wilmington in April 2020, the median home price was $260k and in September 2024 it was $445k.
The next graph showing active and closed listings helps us understand why many buyers still feel that it’s difficult to buy a home in Wilmington. While the number of active listings has gone up since February 2023, we are still far below where we were pre-COVID – September 2024 ha 29% less listings than September 2019.
Days on market have a gradual increasing trend line and have gone back to just about where they were pre-COVID, with an average of 49 days for September 2024. Inventory is close to where it was as well, just under 3 months.
The overall feeling I got from the economic overview was positive. The speakers were Tom Barkin, CEO of the Federal Reserve Bank of Richmond, Ben Shoesmith, Chief Economist for KPMG, and Mouchine Guettabi, Regional Economist with the UNCW Swain Center.
Mr. Shoesmith focuses on the global economy. He said that we are looking at 3.1% global growth for 2024, will see an estimated decline of 2.9% in 2025, and back up 3.6% in 2026. He expects the decline in 2025 to result from the lag time for reduced interest rates to have noticeable effects.
Mr. Barkin said that the broad based inflation decline we are beginning to experience is largely driven by consumers. This is a natural reaction to increasing prices, as consumers become pickier and change their spending habits to adapt to higher prices. He noted that the US economy has returned to its pre-COVID GDP growth trend line. Mr. Barkin said that the recent rate cut was a recalibration towards a less restrictive monetary policy, and we can expect another 50 basis points in rate cuts this year. Also, he noted that the unemployment rate is 4.2%, which is a natural rate of unemployment. All of these signs point to a strong economy.
Dr. Guettabi focuses on the Wilmington Metropolitan Statistical Area (“MSA”), which includes New Hanover, Pender, and Brunswick Counties. He said that our labor market is expected to return to pre-COVID growth rates of about 2%, versus the 5% we have been experiencing the past few years, which is unsustainable for the long-term. Wages have increased 53% since 2019. Average household income is $80k, about $10k over that average for the state, with average earnings of $34 per hour. This is largely due to migration from other areas, as well as the types of jobs available, in higher paying fields such as healthcare. He believes that migration to our area will continue, but at a slower rate.
According to Dr. Guettabi, Brunswick County is the fastest growing county in North Carolina, Pender is second, and New Hanover is 31st. In New Hanover County, 21% of the workforce is comprised of remote workers. The median age in Brunswick County is 57, 41 in New Hanover, and 40 in Pender. He said that Zillow projects a 2.5% housing price increase in New Hanover County over the next 12 months. In general, the area is wealthier now than it was pre-COVID.
The overall feeling is that the Wilmington area was one of the “winners” of the COVID years, as it experienced strong growth. That “easy” growth is over, and we must now work to sustain it by focusing on infrastructure and “more difficult issues” to keep our area the attractive place to live that it is, to individuals and businesses. The markets are “healing,” or correcting from the abnormal growth we have experienced, but overall our economy is strong and wealthier with shifted demographics, and no correction is projected.
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