Tucked away on the Cape Fear coast, Wilmington, North Carolina boasts a beautiful historic district, stunning beaches, and one of the most popular tourist areas on North Carolina’s coastline.
One of the south’s best kept secrets, Wilmington has something for everyone. While Wilmington, NC is popular for its live music, festivals, and food, the Port City has become a widely popular destination because of its Hollywood appeal.
Known as Wilmywood and Hollywood East, Wilmington has become a mecca for film and TV productions, blockbusters and indie films, and cult teen dramas, with filming dating back to the early 1980s when Stephen King’s “Firestarter” became the first film shot in Wilmington.
Wilmington’s film industry attracts visitors from across the country. Film and TV buffs flock to the Port City to search for the filming locations of their favorite TV shows and films. Even in the face of the COVID pandemic, tourists in New Hanover County where Wilmington is located spent nearly $600 million in 2020 – a 23% decrease from previous years.
The 23% decrease ended nine consecutive years of record-breaking spending by visitors. Despite the decrease, New Hanover County ranked higher in spending compared to other urban tourist destinations. The city came in ahead of other North Carolina counties like Durham, Forsyth, and Cherokee that also play host to vibrant tourist locations.
The town’s thriving film industry is just one reason real estate investors should consider buying or building investment property in Wilmington, NC. Movie professionals – actors, directors, techs, writers, etc. – are always in need of long-term rentals during shooting. On the flip side, short-term rentals are a great way to profit off the city’s vibrant tourism industry. Either way, Wilmington is a city prime for build to rent investment.
Wilmington, NC Real Estate Market Overview
Wilmington, NC’s housing market is still very much a seller’s market, as home prices are still trending upward. The median sold price for homes in Wilmington saw a sharp increase of 13% from 2020 to 2021.
Like many other U.S. cities, Wilmington’s housing market saw a decrease of available homes and a 15% YOY decrease in the average time it took to sell a property.
Supply and demand have plagued Wilmington’s housing market for the past 18 months. Would-be homebuyers are competing with real estate investors and other buyers, and inflated cash offers are making it difficult for people to buy homes.
North Carolina’s housing market has been red hot, which has spread into all of the state’s largest cities. So, what’s driving that demand? Some of the state’s most popular cities – Charlotte, Raleigh, and Wilmington – routinely show up on best places to live lists.
The 2020 United Van Lines National Migration Study shows that Wilmington ranked no. 1 among U.S. for inbound movers. One reason: people who have transitioned to permanent work from home status have gained the freedom to ditch high rents in densely populated cities for more affordable cities like Wilmington.
The city appeals to a range of would-be homebuyers because of its diversity. This region offers luxurious waterfront, oceanfront, and golf course real estate ranging from $400,000 into the millions. However, first-time buyers still find plenty of affordable listings under $200,000.
Real Estate Investing in Wilmington NC
Wilmington’s real estate market ranks at the top of the list for real estate investors looking for North Carolina investment properties. Almost half of Wilmington’s population are renters, average monthly rents are on the rise, and individuals and families alike keep moving to the area – all good signs for a real estate investor.
Rents have skyrocketed nearly 16% in Wilmington over the past year due to high demand and a very high occupancy rate of 96%. The multifamily sector is also performing well. There are currently 2,246 multifamily units under construction, with an additional 2,182 planned for the area.
Real estate investing in Wilmington, NC has left no shortage of opportunities for investors. Here’s a good example: a California investment group purchased the Budgetel Inn on Market Street, a motel known for its seedy reputation, with plans to turn it into a cheap long-term rental option.
Investors plan to turn the 224-room motel into a 234-unit apartment complex. It will require rezoning the 7.7-acre tract from the regional business district to the high-density multifamily residential district.
The City of Wilmington planning staff recommended approval of the rezoning so the motel could be turned into tiny apartments. The existing motel rooms will be renovated into efficiency-style apartments between 278 and 352-square feet. The units are expected to attract a young workforce, under 30, and retirees on a tight budget. The investment group also agreed to designate 10% of the complex as workforce housing.
Investors looking for rental property loans in North Carolina have several investment options to choose from.
Several Wilmington neighborhoods have proven to be popular choices for real estate investors looking to buy up available homes in the city. As the available inventory dwindles, investors have started turning to construction as a way to create the needed inventory.
Wilmington is a great city for both new and seasoned real estate investors because, overall, it’s a city with continuous demand and appeal.
With a big-city vibe and a small-town feel, Wilmington is home to upstart millennials, growing families and retirees alike. Additionally, the Port City has a well-balanced market — even with the seasonal market fluctuations that are quite common in the South — and a number of up-and-coming neighborhoods rife for investment.
Wilmington’s Build to Rent Market is King
Because of the national housing shortage in the United States, it isn’t uncommon for real estate investors to turn to unused office space and hotels as a solution to creating more housing options. Investors are also turning to build to rent communities as a solution to the SFR housing shortage.
The build to rent niche has become a popular option for renters, homebuilders, and investors, but now lenders are starting to become more competitive to fund these deals.
The Homebuilders’ Local Opportunity Index, created by the National Association of Realtors, ranked Wilmington fourth out of 130 national real estate markets because of its ability to provide the best short- and long-term opportunities for homebuilders to invest in constructing new homes and build to rent investment properties.
Wilmington, North Carolina has seen more construction activity in both single-family and multifamily properties due to a housing availability crunch in the area. The city’s housing bind has created a great market for build to rent homes and ample opportunity for real estate investors.
Investment Opportunities in Wilmington, NC
Despite low inventory, increasing rents, and increasing home prices, North Carolina real estate investors with strong investment strategies can still profit. Investors have plenty of options considering Wilmington’s single-family rental, build to rent, and new construction markets are booming.
Wilmington continues to grow – both in population and industry – and real estate investors are creating strategic investing solutions to combat the low inventory with new construction homes and built to rent communities.
Don’t miss out on Wilmington’s real estate market because of funding. Lima One Capital is the nation’s premier lender for real estate investors, and we’re the clear choice for investors interested in construction loans in North Carolina or rental portfolio loans.
You have several options when it comes to construction loan lenders, but when you choose Lima One, you get some of the industry’s most competitive rates and terms. If you’re interested in new construction loans in Wilmington, North Carolina, contact Lima One to learn more.
We’re different from other hard money lenders in North Carolina. We have one of the most diverse product suites in the industry, which allows us to help investors reach success no matter their investment strategy. From the initial application to the loan payoff, our lending experts will be there every step of the way.
Get started today and scale your rental property portfolio with Lima One, the nation’s premier lender for real estate investors.
Wilmington By the Numbers
Since October 2020, the median sold price of homes in Wilmington increased nearly 13% to $33,804.
From Sept. 2021 to Oct. 2021, the number of homes for sale in Wilmington dropped from 646 to 587.
The average sale time of homes in Wilmington dropped from 35 days in Oct. 2020 to 29 days in Oct. 2021 – a 15% decrease.