New Septic Rules Effective January 1, 2024

December 12, 2023 By Ilona

New Septic Rules Effective January 1, 2024

New septic regulations adopted by the NC General Assembly become effective on January 1, 2024. These rules affect the repairs of existing systems and establish guidelines for new systems classified as high-capacity uses, such as restaurants, churches, and other similar uses. The information included below is from the Dare County Health Department, listing several concerns with the new rules:

  1. The applicability of the rules as it pertains to the installation of repair systems for systems permitted prior to January 1, 2024.  The new rules are not supposed to apply to systems that have an IP (Improvement Permit), EOP (Engineered Plan), NOI (Notice of Intent to Construct), etc. issued before January 1, 2024 except for when the repair system is to be installed.  This means homeowners will now be forced to contract with an engineer to design advanced pretreatment systems for the designated repair areas (see concern number 2 below as concerns 1 and 2 are closely linked).
  2. Loss of best professional judgment for EHSs.  The ability for local staff to use their experience working with local soils and environment has been severely restricted.  DEH staff will no longer be able to work with people on challenging repair situations.  Forces use of designated repair areas which often may involve use of some form of advanced pretreatment creating an exceptional financial burden on property owners.
  3. The labeling of all uses that fall into certain categories as high-strength wastewater.  Churches, schools, RV parks, restaurants/food service, etc. The rules force the use of advanced treatment equipment when designing systems to serve these uses. These systems cost more to install and require significant ongoing O&M costs.

Dare County officials are evaluating the potential for revisions to the rules in the 2024 legislation session. The Government Affairs Committee will be discussing these new rules at their December meeting, and additional information for OBAR members will be forthcoming following that meeting.
Filed Under: Outer Banks Good Living Tagged With: ,

December OBX Update

December 12, 2023 By Ilona

Outer Banks a Year in Review

The insanity of the Outer Banks market continues.  The almost full-year snapshot reveals some interesting things for sure!

Below, you’ll find each town broken down for SINGLE FAMILY HOME sales from January 1st to November 30th.

Area 2023 Sales Median Price 2022 Sales Median Price %Diff
Corolla 197 $930,000 310 $895,000 36%
Duck 60 $1,087,500 99 $1,050,000 39%
SShores 74 $743,000 105 $780,000 29.50%
Kitty Hawk 53 $690,000 91 $659,000 41%
KDH 167 $549,000 270 $530,000 38%
Nags Head 120 $712,000 174 $799,000 31%

The strangest thing I’ve ever seen is a decreased demand by this much and ZERO effect on pricing.  The only thing that is keeping it afloat is the continued lower inventory.  If next spring we get the typical 30% spike in inventory and demand stays low or lower, you can expect falling prices almost immediately.

Area Active 30% Increase New Active #Months Inventory
Corolla 88 26 114 6 months
Duck 21 6 27 5 months
SShores 17 5 22 4 months
Kitty Hawk 18 5 23 5 months
KDH 60 18 78 5 months
Nags Head 40 12 52 5 months

As you can see, it won’t take many listings in each market to push the inventory to 5 or 6 months.  And this is based on current demand numbers.  If demand weakens more, it could push the absorption rate higher, creating even weaker conditions.  Only time will tell, but we’ll be watching!

Filed Under: OBX Real Estate News & Data, Properties Tagged With: , , ,

November OBX Update

October 30, 2023 By Ilona

Image for November blog post

Let’s take a basic approach this month.

Here’s what we have:

Inventory is generally the highest in our spring market.  This year, we are seeing a 26% increase in inventory in fall versus spring.  That’s pretty unusual.

  • Spring Average Inventory – 280 homes
  • Fall Average Inventory – 380 homes

Similarly, sales are also at their highest in the spring market.  Here, we see a normal 14% drop so far for fall.

  • Spring 3-month average sold – 170
  • Fall 3-month average sold – 145

It’s still not taking long to get properties sold.

  • Median days on market is still pretty low at around 3 weeks.

Pricing hasn’t changed very much, despite seeing more price reductions.  We aren’t seeing a tangible change just yet.

  • Median price in spring vs fall is hovering right around $540,000
  • 59% of closed properties sold UNDER asking price
  • 22% sold AT asking price
  • 19% sold MORE than asking price

While mortgage applications are down, it’s not impacting us yet.

  • 30% of all sales in September were cash

Bottom line is for now, things are still moving along.  However, there are these subtle differences.  Markets don’t change all at once.  It happens little, by little, by little, then all at once!

I’ll be watching.

Filed Under: Home Buyers' Tips & Advice, Home Sellers' Tips & Advice, OBX Real Estate News & Data, Outer Banks Good Living Tagged With: , , , , , ,

For Last 90 days of 2023

October 2, 2023 By Ilona

What to expect?  Well, short of some financial event or credit crisis, probably more of the same.  The big challenge with resort markets, aka discretionary markets, is the lag time.  It generally takes about 18 months for economic factors in the real world to make their way to us.

Because we don’t have a large section of properties that “have to sell” to keep our market moving, as soon as buyers slow down, inventory piles up.  At least that’s how it normally is.  Truthfully, we are not that far from inventory pushing that market shift from “normal” to “soft.”

That being said, right now here are the main highlights of our current market for Single Family Homes.

Corolla, Duck, Southern Shores           
KDH, Kitty Hawk, Nags Head
Active – 110 Active – 110
Under Contract – 52 Under Contract – 44
Sold – 274 (30 buyers/month) Sold – 289 (32 buyers/month)
Absorption Rate – 3.6 months Absorption Rate – 3.4 months

I double-checkedhose numbers, and it is such a coincidence to have the same active for both north and south markets!  They are shockingly similar in all categories.

With 30 buyers a month, 180 active would make it a 6-month absorption rate.  That’s only 70 more listings to push us into a soft/declining market.  I don’t think it’s unrealistic to suggest we could be there by spring.

Real estate is long term investment.  You can time it right, or you can hold and enjoy.  If you have questions on what is the best strategy for you, call for an appointment.

Filed Under: Home Sellers' Tips & Advice, OBX Real Estate News & Data, Uncategorized Tagged With: , , , , ,

Beat the Rates!

October 2, 2023 By Ilona

There are two possible ways to get the best rate possible, even with Fannie Mae sticking it to second home buyers!

The first is a 2 part mortgage. 

One lender, Drew Wright has a program at FNB where you do a 60% first mortgage at an incentive rate similar to that of a first home buyer, and then a second mortgage (home equity loan) of 20% at an even lower rate, with a 15-year amortization.

What he found with his calculations is not only a cost savings on interest but also an increased equity position due to the 15-year amortization.  Click here for a quick recorded message about the process/savings or email me and I’ll forward to you a written version.

The second option is a delayed financing program.

In this scenario, the buyer pays cash for the property, which can potentially save you money in initial negotiations, and then within 6 months of closing you cash out with this loan.  Because it’s not considered a new purchase, they are offering advantaged rates.  And it allows for a 30-year amortization, which a home equity does not.

Either way, if you want to invest in a beach home now, here are two great ways to save some money!  Call me to set an appointment and discuss a strategy that works for you!

Filed Under: Home Buyers' Tips & Advice, OBX Real Estate News & Data Tagged With: , , , , , ,

The “Raw Truth” about the OBX market right now.

September 7, 2023 By Ilona

It’s no secret the real estate market is in very bad shape right now.  And in an effort to be as up-front as possible about the pros and cons, I wanted to create this quick list of the main things to consider before buying or selling.

One of the biggest questions I get as an agent is around timing.  When is the right time to buy or to sell?  Truthfully, there is not a one-size-fits-all answer to this.  The best time is when you want to.  Rarely do we have clients who HAVE to buy or sell out of some distress.  That’s just not the norm.  So, does it make sense for YOU to buy or sell right now?  Let’s look at the raw truth.

  1. Outer Banks homes have the ability to generate quite a nice rental income. If you want to insure your long-term capability to own the home, only look at homes with income that is enough to cover the mortgage.  If it’s not going to cover at least that part, it may not be the right house for you.
  2. OBX home purchases are primarily a lifestyle choice. It’s not the norm to make bank on rental income, so only buy a home you know you will get a lot of personal use from.  If it’s not really ideal for your family, you won’t use it.  That time spent is priceless.  Be sure it fits your future family, too.
  3. With banks failing as what seems to be a regular occurrence now, real estate is an actual tangible asset. While the prices do fluctuate, it will never go to zero.  The inflationary dollar is in real trouble.  Why not park some cash in real estate, especially with passive income and personal use on the table?
  4. However, real estate appreciation or value is NOT capable of instant liquidity. Unless you consider 30 days instant.  Pulling liquidity out of real estate takes some financial investment and, most importantly, time.  If you need liquid cash fast, this is not the right investment.
  5. MAINTENANCE IS MANDATORY. Let me say that again.    Do not become one of those lax owners who collects the money and does nothing to the house for 20 years.  It will only cost more later.  The environment here is harsh.  Annual maintenance to keep the home in top condition is expensive.  Be prepared for that, or just buy raw land instead.
  6. While we benefit from low taxes here, insurance is most definitely on the rise! It may soon be unaffordable for many.  And, there is talk of no longer offering coverage for natural disasters.  I can’t imagine they get away with that, but be aware it’s being talked about. To be properly insured could be pushing $15,000 for many homes these days.  It’s nothing to take lightly.  Make sure you aren’t currently under-insured.  Construction costs for a new build START at $300/sq.ft. now!  (I hope you were sitting when you read that)
  7. Interest rates aren’t forever; you can refinance! Granted, you will need equity in the home to do that, so be aware it does come with some risk if that is your plan.  You will need to refinance before the market price eats up your 20% down payment, or it will require more cash to make it happen.
  8. As a Long-term investment plan, real estate is actually very low risk – high reward. Even if someone bought in the last boom of 2005, just 16 years later, even they would have made a handsome profit.  Not to mention 15 or 20 years of someone else paying your mortgage…all that equity for you to capitalize on at the end.

If you would like to discuss your specific circumstances and find out the best timing to either buy or sell, just contact me and we will go through everything you need to know!

Filed Under: Home Buyers' Tips & Advice, Home Sellers' Tips & Advice, OBX Real Estate News & Data, Uncategorized Tagged With: , , , , ,

August Market Update 2023

August 4, 2023 By Ilona

August on the Outer Banks

We are closely watching the main stats on supply (up 33% since January) and demand (down 44% since January).  Part of that is watching more specific pockets of activity to glean a closer insight into future trends.  One of those trends I’ve noticed in my near 30 year career is that of high-end home sales.

Take a look at the numbers for Duck and Corolla.

Homes sold $2M and over:

2019 –              6

2020 –              26

2021 –              64

2022 –              51

2023 –              17 YTD  (Likely on track for 27 total)

    • Even if we end up at 27 sold, that will be a decline of 47% year over year.
    • Number of price reductions to get homes sold is going up; 60% of properties sold are under list price, compared to 51% last year.
    • Median days on market for the high-end sales has gone from 21 days to 93 days year over year.
    • There are currently 30 homes for sale in Duck and Corolla $2M and over. With basically 2.4 buyers a month this is over a year worth of inventory.

With interest rates rising, insurance costs rising, rents stabilizing to pre-pandemic times, it’s really clear that a shift in pricing has to take place.  The timing of this is what’s left to be seen.  This strange anomaly of still very low inventory (although is starting to slowly climb) is keeping us stuck in limbo.

If you’re thinking about selling, let’s talk about what your home’s value may look like in this market.

Filed Under: Home Buyers' Tips & Advice, Home Sellers' Tips & Advice, OBX Real Estate News & Data, Outer Banks Good Living, Uncategorized Tagged With: , , , , , , ,

Insurance Companies are Tightening Guidelines

July 14, 2023 By Ilona

Insurance companies are tightening their underwriting guidelines and limiting coastal exposure, in addition to jacking prices way up.

Here are the changes to note:

  • Markel – One of the more affordable companies will NOT insure any home built in the 1980’s or that is known to have or have had polybutylene plumbing. Even if it’s all been removed and replaced – NO.
  • Frontline – Another very affordable option will not insure anything built prior to 2005. Or give a homeowners policy on a roof more than 15 years old.  Most company’s limit is 20 years.  (You can still get a dwelling policy – but the coverage is nowhere as good, and the price is higher)
  • Farmers Insurance – They have pulled out of Florida completely. Who knows what other coastal community might be next?
  • NCIUA – This is becoming one of the better options but has a cap of $750,000. So additional riders are needed, which can get costly.
  • Under-insured – Most homes today are underinsured. At a meeting with our President and General Contractor recently, he quoted the base square footage price for building a new home today at a minimum of $300 per sqft!

With Nationwide pulling out of coastal markets, Farmer’s doing the same in FL, and many others really tightening their guidelines, we could really use a few years of very minimal hurricane activity!

If you need more information on the best insurance options for your OBX home, do please call Steve Bonday at 252-331-8233 or email at [email protected].

Filed Under: Home Buyers' Tips & Advice, Home Sellers' Tips & Advice, OBX Real Estate News & Data, Outer Banks Good Living Tagged With: , , , , , ,

July Market Update

July 3, 2023 By Ilona

Happy 4th of July on the Outer BanksMid-year is upon us and not much has changed since the last report.  I did notice an interesting trend regarding CASH in our marketplace.  Here’s the deal.  There have been 136 home sales in Duck and Corolla since January.

Of those 136 home sales:

  • 32 Cash
  • 13 Jumbo Loans
  • 91 Conventional Loans

A conventional loan amount is $726,200.  With the typical 20% down, that means a purchase price of around $875,000.

  • Only 53 of the 136 homes sold were under $900,000
  • 83 homes sold over $900,000 up to $6,300,000
  • 13 were jumbo loans
  • 22 were cash
  • The average price is $1,251,000
  • The median sales price is $992,500

A jumbo loan amount is anything over the $726,200.  There were only 13 of those reported.  There were 48 Conventional loans in the $900,000 and up price range.  This means that 48 buyers out of 83 brought enough cash to the table to get their mortgage at or under $726,200.

To paint a clear picture – 32 cash buyers, 48 mostly cash buyers.  That’s 80 buyers (60%) who brought a ton of cash to the closing table to buy a home on the Outer Banks.  Including the highest sale of the year so far – $6,300,000 ALL CASH!!!!  This just seems amazing to me. (Here’s a link Click Here to View Listings to that home if you want to see what $6.3M gets you)

This is a clear indication that buyers have no problem parking cash in a beach home right now.  I mean, why not?  Let’s look at the 3 main reasons this could be a good idea.

  1. Rental income – If you choose to rent, the income will at the very least cover your mortgage. That means, future equity you reap, all paid by SOMEONE ELSE.
  2. Bank Failures – With banks failing across the country, and the Dodd-Frank Bill legalizing, if not mandating, “bail-ins” a lot of people don’t feel safe keeping their cash susceptible. Rather, they are investing in a tangible asset, and one they can enjoy themselves and have others pay for!
  3. Inflationary Fiat Dollar – Let’s get real, the price of real estate will NEVER go to zero. As inflation spikes even more and more out of control, the dollar is tumbling closer and closer to zero.  It seems buyers are hedging their bets on the tangible asset of real estate versus the tumbling value of the dollar.

We haven’t even begun to see the effects of the commercial real estate crisis looming.  This is widely affecting regional banks who are holding the notes on these buildings that are sitting empty in record numbers across major cities.

Don’t get me wrong, my message is not of doom and gloom.  What’s going to happen is going to happen.  My point is, what is your best move?

If you are considering selling, there are cash buyers waiting for your home.  We do have investment vehicles where you can put your money and AVOID capital gains tax in the meantime.  Contact me for more information.

If you are thinking about buying, get off the fence and don’t let the interest rates deter you.  You won’t have much competition buying right now and there are some great opportunities out there!

Filed Under: Home Buyers' Tips & Advice, Home Sellers' Tips & Advice, OBX Real Estate News & Data, Outer Banks Good Living Tagged With: , , , , , , , , , , , , ,

Welcome Summer!

June 2, 2023 By Ilona

Welcome Summer! Now that Memorial Day is behind us, it’s officially our summer season. It started with some interesting weather! I read that June is predicted to be cooler than normal. Once again reinforcing my pick for September as the best month on the OBX.

Market Report – I have to say in 26 years of being in this business, the market we have right now is the most odd I’ve ever seen. We have a lack of buyers AND a lack of inventory. With two major banks pulling out of the resort markets, there’s a bit of uncertainty to come. Read June’s FULL Report Here!

Mid-Currituck Bridge – No real construction news, but a win in the fight. The SELC has decided NOT to appeal the recent court’s decision. This will certainly save some time. While the plan seems to intend on moving forward, the environmental studies will all have to be re-done since they are more than 3 years old. Full article here.

Tax Deferred Exchange – Did you know it’s possible to sell an investment property and defer capital gains tax, WITHOUT having to do a 1031 Tax Exchange and buying another property? I have a handy PDF document I can send with more information if you’re interested. Just email me back to request it.
Filed Under: OBX Real Estate News & Data, Outer Banks Good Living Tagged With: , , , ,