Thu, Jan 15, 2015 at 12:50 pm
Eric Fritz
To Jim English
RE: Open letter to the Fairfield Harbour Residents regarding future pricing and development
From: Eric E. Fritz, President; Fritz Appraisal Services, Inc. Date: 01/15/2015
I have been appraising property in Faifield Harbour “FFH” since 2002. I have been appraising since 2000 and my geographic area covers Craven, Pitt, and Jones Counties. Each has a distinct and unique real estate history despite being adjacent to Craven County.
It was a real challenge to keep apprised of the accelerated price rise from 2003- 2006 and the subsequent plateauing and fall as a result of the bursting of the real estate bubble after 2006, the financial recession in 2008, the closing of the golf course, and the various HOA disputes and law suits. Due to its unique circumstances FFH is a unique neighborhood unto itself, not really comparable to any other.
Most of Craven county followed the roller coaster with accelerated price appreciation from 2003-2006. Some of that was due to easy credit and some was due to additional national exposure crowning New Bern as one of the best places to retire in the country. After that most neighborhoods, areas, and subdivisions have seen prices falling and plateauing. My observation of MLS reports over the years indicated that prices in Craven County generally stabilized in 2012 and thus far have plateaued up to the current 2015. However, this has not been the case in FFH. Prices are still clearly falling which can only be attributed to its recent history and uncertainty around its future course.
To illustrate let me provide a snap shot of lot prices in 2006 and now. I had to dust off my old 2006 MLS books, which are a handy reference. When I say “regular” lots I mean lots that are not water front or golf front. In 2006 FFH regular lots were selling from $15,000 – $35,000. Golf lots were selling from $40,000 – $60,000. Waterfront lots were selling from $170,000 – $285,000+. Regular lots are now selling from $1,000 – $4.000 a drop of 88% to 93%. Golf lots are selling from $3,000 – $5,000 an approximate 93% drop, though one superior golf lot sold for $11,000. Only 4 waterfront lots that have sold over the past 2 years from $27,500 – $80,000 a drop of 72% – 82%. No other areas that I cover have seen such a precipitous fall in prices. No areas have experienced sustained price increases since 2006. The only neighborhoods I am aware of that have regular lots at that price are in the Five Points and Duffyfield areas in New Bern. The price of a regular lot in an average Craven County subdivision is $20,000 – $25,000. An average lot in say Taberna or Carolina Colours is valued at around $60,000; some of the smaller patio home lots around $40,000 – $50,000. Regular lots in Riverbend can range from about $20,000 to $35,000 with canal front and water front from $60,000 to the upper $100,000s.
It’s not hard to see that if the HOA doesn’t get a hold of their community assets and amenities the future can be quite bleak. That’s the bad news, the good news is that the infrastructure is still intact and the neighborhood still shows well. The current pricing is a poor indicator of the quality of the neighborhood. However, if permanent and solid plans are not put in place, specifically for the golf course and open areas of the former Shoreline Golf course, things can get a whole lot worse. The marketing appeal can plummet and foreclosures and abandon houses could ruin the neighborhood. FFH is in competition with other surrounding areas which are not tied down with the same problems. The cost differential directly relates to market appeal. Developers, builders, and buyers have other options. No one wants to take on increased risk with a purchase as important as a house.
I have read the proposed resolution and acquisition plan for the Mid South bankruptcy. This seems like an excellent plan to take control of FFH by the residents again. It is not my place to analyze any of the specifics of the plan. I cannot predict any particular rate of decline or appreciation. What I will say is that FFH is in competition with other neighborhoods. The objective data above shows just how far behind FFH has become in relation to other, what were once similar neighborhoods in the area. In my opinion it would be a severe mistake not to take control now and all of the homeowners should be involved. If the owners take control of the assets and amenities they have a chance for the neighborhood to begin to recover. Even with the successful implementation of the plan, it’s going to take many years to be on par with competing subdivisions in the area. If the situation languishes things can get much worse with more precious equity disappearing, foreclosures and vacancies increasing, and a drop in the quality of life for the homeowners.
Eric Fritz
252-229-0009
Fritz Appraisal Services, Inc 314 Channel Run Drive New Bern, NC 28562