7 Things To Know About Buying Real Estate on the Outer Banks

Here is a list of the top 7 items I discuss with any new buyer who is looking for their vacation or investment home on the Outer Banks.

  1. Be prepared for 20% or more down. Depending on your situation, the bank may require more (like when buying a condo) because it’s not your primary residence.
  2. You can use up to 75% of the rental income the home generates in order to help qualify you for the mortgage. You will need at least a three-year history.  Keep in mind, this will mean you have to apply for an Investor loan which does carry a slightly higher interest rate.
  3. The entire Outer Banks is in a flood zone. Some areas are in flood zone X which means no insurance is required.  Most of our area will qualify for the National Flood Insurance Program, which usually runs less than $800 a year.  (Assuming Congress passes the extension this year)
  4. If you buy a foreclosure, you’ll have to re-furnish the home and buy it as-is. For some reason, the banks just haven’t figured out that the furniture in these vacation homes is valuable and needs to stay.
  5. The local county and city taxes are very low here. We generate so much revenue from the weekly guests in Occupancy Tax and in Transfer Tax on the sale of a home, that the annual taxes can stay very reasonable.
  6. Property Management fees vary based on the services you select from the Manager. It’s sort of an a-la-carte situation these days.  How much you want the Property Manager to do for you will determine the percentage you’ll pay.
  7. The Median Sales Price for a home on the Outer Banks in June 2005 was $507,000. In December 2016, it was $315,000. NOW is a GREAT time to buy your vacation home!

For more information on how to get a home of your own on the Outer Banks, call today!

Mid-Currituck Bridge Update

Reprinted with permission from the Outer Banks Association of Realtors

Mid-Currituck Bridge Update

As of last week, “October 2016”was listed on NCDOT’s Mid-Currituck Bridge web page as the month that that the Record of Decision was supposed to be released. The project timeline on the site has now been updated and states that the Record of Decision is expected Spring 2017. As noted below, the Record of Decision is typically a huge hurdle for large-scale transportation projects and is extremely significant because it closes the chapter on the environmental study process.

NCDOT Update – at ncdot.gov

Project planning and implementation of the Mid-Currituck Bridge was placed on hold in 2013 while NCDOT reviewed state, regional and local transportation improvement funding priorities using the Strategic Mobility Formula. 

The project has since been approved for inclusion in the 2016-2025 State Transportation Improvement Program (STIP), and now, work toward a Record of Decision (ROD) is underway. An amendment to the STIP calls for NCDOT to start the dedication of state transportation funding in fiscal year 2017 (which starts July 2016) that will be used for bridge construction. The STIP originally called for the dedication of funding to begin in fiscal year 2019. 

As part of working toward a Record of Decision, the Environmental Impact Statement (EIS) is being re-evaluated to determine if a supplemental EIS is required. Because it has been more than three years since the approval of the Final EIS in 2012, this re-evaluation will consider changes regarding the project, its surroundings, impacts and any new issues, circumstances or information that was not considered in the original document. The re-evaluation will also look at any changes in laws or regulations that apply to the project. 

If the re-evaluation process concludes that the information presented in the Final EIS is an accurate analysis of anticipated project impacts, the Record of Decision will be published signifying the completion of the environmental study process. 

Additional activities to take place before any construction begins include: developing a new traffic and revenue study and toll financing plan, selecting a builder, preparing final design plans, acquiring right of way, and obtaining environmental agency permits.

Outer Banks Fall Market

What can you expect from the fall real estate market on the Outer Banks?  One thing is for sure…activity!  So far this year, the number of properties going under contract for the area is up by 7%.  That means we have buyers!

While inventory levels still continue to drop, we do have over a year of inventory still plaguing us (13.5 months).  So, even with the number of sales up and number of listings down, it would still take over one year to sell off all the property currently on the market.

So, why list your home this fall?  Because it can sell!  Yes, it means you have to price it right to compete in today’s market.  The truth is, with more buyers than last year, if the property hasn’t sold, it’s likely over priced.  In a market full of options for buyers, only two things really matter…price and condition.

We’ve noticed that buyers today don’t want to put up the large down payment, and then immediately dump a bunch of money into the home to bring it into the 21st century.  If your home still screams 80’s or 90’s, it will go to the bottom of the list, unless the price is super attractive.  I’ve personally seen buyers bypass a home with better location that hasn’t been updated, to go further back to a home that has.  Please don’t shoot the messenger!  I don’t make the rules, I just report them.

Here’s what can be expected between now and the end of the year:

  • Buyers want a discount because the rental income is basically over.
  • The number of sales will increase over summer by about 18% to 20%.
  • Many buyers will need to buy something before the end of the year.
  • Listing inventory will go up about 12% to 15%, so your home will have a bit more competition. Price it right, so you sell first.
  • Buyers who got the itch to buy this summer will be back to take a closer look now that homes are available to show.
  • Many buyers like to take the time between now and next spring to make changes to the home and personalize it.

If you’re thinking about selling your Outer Banks home, give me a call to discuss it.  I will do a free market analysis for you.  If you’ll likely be here in the next 60 days, let’s meet!

Dare County Flood Maps

Dare County’s preliminary flood maps were officially released on Thursday, June 30th and info on the maps can be found on Dare County’s website at www.darenc.com or directly through the FRIS website.

A presentation on the preliminary maps was given by Steve Garrett from the NC Floodplain Mapping office at the last Dare Board of Commissioners meeting. Base flood elevations throughout Dare County are going down in most areas. Some base flood elevations are going down in areas like Wanchese by as much as 5 feet and many properties currently in an AE zone are now mapped into an X zone.

Mr. Garrett’s presentation can be found at around the 33 minute mark. Mr. Garrett presents information on how to access the web site and shows you how to find the current effective map information as well as the preliminary map data. The base flood elevation changes will impact flood insurance rates and building requirements when the preliminary maps become effective in 18 to 24 months. Properties showing reduced base flood elevations and /or a change to a lesser risk flood zone may find that garages that are not covered by insurance under current maps will be covered under the updated maps; bathrooms and other rooms that are not allowed now due to an area being below base flood elevation will be allowed under the updated maps.

For example, Mr. Garrett showed 12,875 properties in unincorporated Dare County currently in an AE zone. Under the revised preliminary maps, only 8,493 properties are in an AE zone. That number drops dramatically in Kill Devil Hills too, with 4,389 properties currently in an AE zone but under the revised maps, only 182 properties will be in an AE zone. The same scenario holds true for Dare County’s five other towns.

When going to the fris.gov site, select the state of NC; click OK when the Welcome box appears. Then select Dare County from the map or from the drop down menu. You can click on a particular structure by searching by address; however, if you do not enter the address exactly the way appears in the system, then the address will be invalid. All Southern Shores addresses are entered as Kitty Hawk. The box in the right top corner will show “Effective” or current map info. Once a property is clicked on then you can see the current elevation and zone. Click on the top right corner box and change “Effective” to “Preliminary” to see the revised map information. Click on the “Flood Information” box to see the new base flood information and zone information. There are two new zones – “AH” and “AO” which represent shallow flooding areas. AH zone applies strictly to Kitty Hawk. AO represents areas of shallow flooding of 1 to 3 feet.

The preliminary maps were developed by the NC Floodplain Mapping office using grant funds from the Federal Emergency Management Agency and were developed over a period of years using the latest GPS and Lidar technology as well as historical storm data up to Hurricanes Dennis and Floyd.

While the new maps may show a lower base flood elevation or a change to a lesser risk flood zone, it is important to maintain coverage and discuss flood insurance coverage options with your insurance agent. After all, the Outer Banks is surrounded by water! Also, while a property may be coming out the Special Flood Hazard Area altogether(X zone) and not be required to maintain flood insurance therefore eligible for Preferred Risk coverage when new maps become effective; the premium may actually be higher than what a policyholder is currently paying. Since it is going to take some time before new maps become effective, we will be keeping you updated and informed on the progress!

5 Reasons to List Your Home in the Summer

 

Although it sounds reasonable to think with all the guests coming, it would be better to just sell the home in the fall or spring, take a look at these 5 reasons you could be missing out by waiting.

  1. Inventory has been our biggest challenge in terms of pricing. June, July and August are historically the time of year when our inventory is the lowest.  Why not take advantage of that incredible opportunity?  Lower inventory means higher prices.
  1. The Outer Banks will have over 3 million visitors each year. Obviously the majority of those folks visit during the summer months.  We cannot get that kind of exposure any other time of year!
  1. The home is fully open and operational. Buyers will have inspections done before closing.  When the house is winterized during the fall/winter, there are extra costs to open the house back up for those inspections.  Right now, everything is up and running and easy to inspect to assure the buyer the home is in good condition.
  1. It’s a beach house! When does the beach look the best?  Summer time of course.  Your beach house will show the best with sun shining, deck chairs out, pool open, hot tub running!  Buyers get excited about these things and it helps to sell your home.
  1. Buyers this time of year are serious about buying! If a potential buyer is going to take time out of their much anticipated vacation to look at your home, it means they are serious about buying.  They’re here with all decision makers too.

If you would like to know what your home is worth in today’s market, or want to see my marketing plan, call or email me today!

2016 Rental Report

I recently attended a meeting where a report was given from the Outer Banks Tourism Board.  There is a reported decline in bookings of about 8% across the board.  What they’re finding is two fold:

  • More Americans are traveling abroad/overseas this year as our dollar exchange is good in Europe and some other locations.
  • More and more visitors are waiting to reserve their homes until the specials come out, hoping to get deeper discounts.

Apparently some rental companies on the coast of South Carolina are experiencing the same occurrence.

If your home is lacking a few weeks, I would like to extend an offer to promote the house for you on my Facebook Business Pages and Twitter account, where I have nearly 2,000 followers collectively.   I can’t guarantee any results, but more exposure certainly can’t hurt.  Send an email to my Marketing Assistant Michelle at [email protected] with your house information and a link to it and we will get you in the rotation.

Average Sales Price Versus Reality

So I was reading the latest statistics prepared by our Association, which is an amazing service they provide, and I started to get a little excited!  The report is that Average and Median Sales Price are up!  I looked deeper into each Town and area, and noticed a few really bright spots in our market…according to the Median sales price.

One challenge with the data is the comparison is for the entire year of 2015, to just the first 4 months of the year.  Not exactly apples to apples.  However, a few locales are showing significant increases in Median Sales Price.

Does that mean prices are finally starting to go up?   Sadly, not really.  What it does mean is that consumer confidence is strong, so there are more homes selling in the upper price ranges than the previous time period.  That is still a very good sign.  If that continues, and inventory levels have a chance to straighten out, we could then see prices rising again.

The bottom line truth is the basic principle of supply and demand will always dictate our pricing structure.  There is no way around it, I’m afraid.  So if you see reports of our market prices rising…just remember it means more homes in the higher price ranges are selling, not necessarily that prices are going up.  When our area still has 17 months of inventory, it’s hard to imagine that environment producing rising prices.

One other item I considered was, are there fewer homes for sale in the lower price ranges, causing people to buy in the higher price range?  Take a look at a few of the examples below.

For example:

Duck reporting a 13% increase in Median Sales Price

2015               2016

13                       8                      Homes sold under $500,000

7                       11                      $501,000 – $900,000

4                        3                      Over $901,000

Currently 167 homes for sale, 7 sales a month = 24 month supply of homes for sale

Currently 71 homes for sale $500,000 and under

Corolla reporting only a 2% increase in Median Sales Price

2015               2016

33                   30                      Homes sold under $500,000

22                   15                       $501,000 – $900,000

10                   14                       Over $901,000

Currently 370 homes for sale, 17 sales a month = 22 month supply of homes for sale

Currently 147 homes for sale $500,000 and under

*Also important to note the difference in pricing of the over $901,000 – in 2016, there were 6 sales over $1,200,000 versus 2015, only 2.

In 2015 the lowest home sale was $218,000 and 6 under $300,000.  In 2016 the lowest sale was $102,000 and there were 8 under $300,000.  Hard to make a case for a 2% increase in price with that data.

Kill Devil Hills reporting a 14% increase in Median Sales Price

2015               2016

49                   38                       Homes sold under $300,000

8                     15                       $301,000 – $500,000

6                      3                        Over $501,000

Currently 180 homes for sale, 18 sales a month = 10 month supply of homes for sale

Currently 80 homes for sale $300,000 and under

So…As you can see from the numbers above, the higher end sales are seeing a nice surge.  I promise, as soon as prices start to rise, you’ll be the first to know!  Meanwhile, I’m still very excited that consumer confidence is increasing, and Jumbo loans are clearly not an issue.  Rates are still under 4%, which is amazing.  The bottom line is, as always, if you want to sell your home, we can do it!  If you’re thinking of investing, the time is right!

 

March Outer Banks Market Report

True to history, we are already seeing a spike in sales for this month.  In just the first 17 days we already have 20% more homes under contract than last March.  That’s very exciting news.  On the other hand, what we also have is over a year of inventory.

The basic principle of supply and demand just simply will not allow prices to rise.  Inventory is too high for the number of buyers in the market.  Prices will continue to be affected.

I’ve been saying for 5 years, that if you want to wait for prices to go up to sell your home, you’ll be waiting at least 3 to 5 years.  Well, after 5 years, prices still haven’t gone up.  So now, I’m saying 7 to 10 more years.  Sadly, it’s just going to take that long based on the statistics.

Real estate is a long-term investment. If you’re in the market to buy now and plan to own the home for 10 to 20 years, don’t worry.  You’ll be fine.

If you’re still on the fence about selling, just consider the cost to own your home for the next 10 years, versus pricing it to sell now.  Then ask yourself a very serious question…Is it more important to get your price, or to get the home sold?  Exactly how much longer do you want to own this home?  If you’re waiting on price, it could be a while.

If I can help you answer any questions about buying or selling, please let me know.

Southern Shores Flat Top Cottage Tour 2016

The following is reprinted from the Town of Southern Shores:

After a hiatus for 2015, the Southern Shores Historic Flat Top Cottage tour is back, and will be held on Saturday, April 23, 2016 from 1:00 PM to 5:00 PM.  Tour tickets ($5.00) will be available on the day of the tour at 156 Wax Myrtle Trail or 13 Skyline Road.  The $5.00 donation covers visiting all the cottages on the tour. Proceeds will benefit the Flat Top Preservation Fund of the Outer Banks Community Foundation.  This fund was established to provide maintenance funds for the flat top located at 13 Skyline Road, which was donated to the Outer Banks Community Foundation and which serves as its office.

Frank Stick, (1884-1966), beloved Outer Banks artist and developer, obtained an option on the land that is now Southern Shores, and supervised the platting of lots, the installation of roads, and the design and erection of the first flat top cottages.   These now quaint architectural houses were reminiscent of the cottages he had seen in Florida, and were of cement block construction, with wide overhanging soffits, propped up shutters, and flat tar and gravel roofs.

These historic cottages that once dominated the town’s architectural landscape, will be featured in an afternoon of open houses. We are proud to offer more than ten of these gems of varying sizes, locations, styles, and finishes for a self guided open house tour.  Approximately 30 examples of this original architectural style still remain as flat tops in Southern Shores.  The attached photo is of the Mackey cottage, nestled on the oceanfront at 218 Ocean Blvd.

There are two headquarter cottages where tour tickets will be sold: 156 Wax Myrtle Trail (facing Porpoise Run) or 13 Skyline Road (Outer Banks Community Foundation). Maps will be available at headquarter cottages, detailing the addresses of each open house.   Brief histories of the cottages will also be provided.

Red and blue balloons will mark cottages that are open on the day of the event.  Parking will be available at the intersection of Wax Myrtle and Porpoise Run. From here, several cottages participating in the tour will be within walking distance of each other.

In addition to the two headquarter flat tops (Clarke Cottage and Outer Banks Community Foundation), the following cottages are on the tour:  69 Ocean Blvd (Sea Spray), 113 Ocean Blvd (Knight),120 Ocean Blvd (4 Gulls), 157 Ocean Blvd (Sea Breezes), 159 Wax Myrtle Trail (Falconer) 169 Ocean Blvd (Atlantic Breezes), 172 Ocean Blvd (Pink Perfection), 18 E. Dogwood Trail (Oh So Sandy), and 218 Ocean Blvd (Mackey).

Information is also available at the Facebook page for Southern Shores Historic Flat Top Cottages:  https://www.facebook.com/Southern-Shores-Historic-Flat-Top-Cottages-421136131314749/ .

The day before the Flat Top tour, the Kill Devil Hills Historic Landmark Tour will take place on Friday, April 22nd from 1-5 PM. Information is available from the Town of Kill Devil Hills at 252-449-5318.

For additional information about the Southern Shores Flat Top Cottage Tour, please contact Sally and Steve Gudas at 804-399-8342 or [email protected].

 

2015 Outer Banks Market in Review by Area

2015 was a good year for real estate.  Overall the market finished with an 11% increase in the number of homes sold.  While we still have some work to do, there are very good signs for a lot of the area.

Northern Beaches – Corolla & Duck

Leading the category of still in much need for improvement is Corolla.  Not far behind is the Town of Duck.  The main reason these markets are still showing huge inventory levels and decreasing prices is the lack of a primary market.  In these two locations, 99% of sales are discretionary.  These sellers don’t HAVE to sell and the buyers don’t HAVE to buy.  They are secondary homes.  Without a primary market to stabilize things, the inventory in both areas has remained out of control.

It will be interesting to see how long it will take to get inventory levels to a normal absorption rate of 6 months or less.  It certainly won’t happen quickly.  I think the most notable stat to recognize is the 25% increase in the number of homes sold for Corolla last year.  That’s interesting because in most of 2015 there was a 20 to 21 month supply of homes for sale.  Even AFTER a 25% increase in homes sold, there is STILL TODAY a 19 month supply of homes for sale.  Let that sink in for a minute.

201320142015
Corolla
Total Sold17115819725%
Avg Days on Mkt267271250
Avg List Price $667,649 $728,310 $737,4501%
Avg Sold Price $621,037 $683,375 $698,1222%
Currently Available291
Average Price$849,894

You’ll notice a slight increase in average sold price above.  Yet, I mentioned that prices are still dropping.  How can that be?  If we look a the breakdown below, you’ll notice there were fewer homes sold under $500,000 and more homes sold over $500,000.  That can skew the average price.  What we do know is the average home in Corolla goes through 3 price reductions before selling, as well as over 200 days on the market.  Both are signs of continued price decline.

20142015
Under $350,0002818%3518%
$350,001 – $500,0005032%5729%
$500,001 – $700,0003623%5126%
$700,001 – $1M2214%2915%
$1M – up2214%2513%

 

201320142015
Duck
Total Sold827675-1%
Avg Days on Mkt254218251
Avg List Price $776,662 $781,055 $661,670-15%
Avg Sold Price $714,076 $728,505 $619,861-15%
Currently Available150
Average Price $687,000.00

What’s interesting for Duck is the very clear shift in lower priced homes selling.  The jump in homes sold from $350,000 to $500,000 was massive!  Notice also, the drop in homes sold in the higher priced categories.

20142015
Under $350,0001317%1216%
$350,001 – $500,0001520%2533%
$500,001 – $700,0001824%1317%
$700,001 – $1M2026%1824%
$1M – up1013%79%

 

Southern Shores

Going into 2015, Southern Shores was showing great numbers.  I’m not sure what changed throughout the year, but they didn’t end as strongly as they started.

201320142015
Southern Shores
Total Sold7096971%
Avg Days on Mkt202192235
Avg List Price $541,660 $519,143 $470,721-9%
Avg Sold Price $511,185 $487,978 $444,475-9%
Currently Available78
Average Price $653,286.00

Another Town with a huge increase in homes selling under $350,000 and a drop in sales of those higher priced.  Very interesting to see what will take place in 2016 for Southern Shores as it’s still a very sought after location.

20142015
Under $350,0002930%4445%
$350,001 – $500,0003638%2829%
$500,001 – $700,0001920%1515%
$700,001 – $1M77%88%
$1M – up55%22%

 

Southern Beaches – Kitty Hawk, Kill Devil Hills and Nags Head

You’ll notice quite a few differences with these Town stats than the northern beaches.  Once again we go back to having a primary market.  These areas have been largely helped and stabilized for that reason.

201320142015
Southern Beaches
Total Sold41138444015%
Avg Days on Mkt211175170
Avg List Price $343,527 $368,743 $361,164-2%
Avg Sold Price $324,716 $353,107 $345,177-2%
Currently Available394
Average Price $497,639.00

The major news in the southern beaches for price range stats is the increase in homes selling from $350,000 to $500,000.  The rest remained fairly unchanged.

20142015
Under $350,00027872%30369%
$350,001 – $500,0004913%7918%
$500,001 – $700,000308%399%
$700,001 – $1M174%102%
$1M – up103%92%

It’s my expectation that we will see similar numbers in 2016.  I’m not predicting another year with double digit increases in number of homes sold.  However, it would be lovely to see some serious stabilization in pricing for the northern beaches.  I’m not sure that’s possible with the oversupply of inventory, but it’s on my wish list!

If I can help you with buying or selling on the Outer Banks, let me know!

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