February OBX Market Update

It’s almost Spring!

While the weather here is warming up, nothing is as hot as the real estate market.  In fact, 2005 called and said it wants to reminisce!
Market Update – Interest rates did tick up a bit (still holding at around 3%), but that doesn’t seem like it will slow down the activity right away.  We have 44% of our inventory under contract.  If you list it, it will sell.  If you are thinking about putting your home up for sale, here’s a checklist of readiness to look at to get prepared.
Vendor List Normally this time of year I post my list of trusted vendors.  Everyone is backed up for 6 to 8 weeks at the moment.  If you do have something that really needs to be done, contact me and let me see if I can find a fit for you.
Rental Market – We are once again experiencing a record year in vacation rentals.  If you do have a few weeks lagging to get booked, I will be happy to post your home on my business page for additional exposure.
Outer Banks Foodies – One of the top questions I get regularly is, where’s the best place to get…..  Here’s a quick peek at a few of my favorites around the area – CLICK HERE!

WHY DO YOU NEED A PROFESSIONAL REAL ESTATE AGENT, EVEN IN THIS MARKET?

Ilona Matteson, Beach Realty

Getting an offer on your home in an active market seems quite easy, and in most cases it is.  What do you need an agent for then?  Well, finding the buyer is just the first of dozens of steps in getting your home sold.

The question becomes, do you want to ensure you are getting maximum VALUE as well as maximum CONVENIENCE when selling?  It’s actually a pretty pain staking process to go through the entire 45 to 60 day process and requires many, many hours of time.

Many sellers think they can get an offer and then “let the attorney handle it”.  Yes, your attorney can manage the CLOSING.  That simply entails preparing your deed and handling the transfer of money AT THE END OF THE TRANSACTION.

Here’s what it doesn’t include:

  • Pre-Qualifying the buyer/agent/offer to make sure it’s a solid deal
  • Negotiating for the highest dollar
  • Choosing the best offer, in the case of multiple offers (it’s not always about the highest price)
  • Negotiating the home inspection, including finding contractors to give estimates, and meeting them at the home
  • Pest Inspection, Septic Inspection, Pool/Hot Tub, HVAC – knowing vendors and meeting them at the home
  • Prepping the appraiser or answering comparable questions – attorneys don’t have access to MLS, nor have been in the latest homes sold
  • Staying on top of the buyer’s loan process
  • Knowing which lenders and other vendors perform on time
  • Working with the rental company to transition buyer
  • Handling the dozens of calls from buyer/buyer’s agent throughout the process

Bottom line, we are experiencing an extreme number of homes selling per month.  All requiring an attorney to manage the closing.  The attorney is not available to answer calls throughout the day to deal with the day to day situations that come up during your closing process.  In addition to that, if they were available, they would be charging you per hour for that time.  Most attorneys charge around $200/hour.  On average an agent will spend 30 to 40 hours working on your transaction.

Even if you offer a commission to a Buyer’s Agent and think they can assist with these tasks, that’s true.  However, the Buyer’s Agent works for the buyer.  You are now essentially paying the buyer’s agent to work AGAINST you, without your own representation.

In the end, the best way to maximize VALUE and CONVENIENCE is to have a professional agent manage the ever challenging task of getting your home sale to a successful closing.

January 2021 Market Update

Supply and demand. That’s the basic economic principle driving markets for decades. Here we are! Finally experiencing some movement in the northern beaches market, after the slowest recovery ever from the 2008 market crash.

Sellers – if you want to cash in – now is the perfect time! Condition is still important to maximize profits, so contact me before any repair work so we can make the most of your investment.

Buyers – be pre-qualified, ready to sign an offer, prepare to offer virtually, and be prepared to offer over asking price in many cases. You need someone scanning the new listings daily. Now is not the time to go unrepresented. Let me know if you’re looking!

Corolla
57 Active listings 108 Under Contract

Duck
23 Active listings 22 Under Contract

Southern Shores
15 Active listings 19 Under Contract

Kitty Hawk
6 Active listings 17 Under Contract

Kill Devil Hills
24 Active listings 65 Under Contract

Nags Head
38 Active listings 38 Under Contract

Now you can see what we are working with. Contact me if you have any questions about our current market.

I do predict it will last this way through the year.

August 2020 OBX Market Report

How does inventory truly affect the real estate market? In a big way!!

Take a look at these two charts outlining the absorption rate for each location. FYI – absorption rate is a breakdown of how many months it would take to sell out the current inventory based on number of homes selling each month. This is important because it is the primary factor in determining if there is a rising, stable, stagnant or declining market (see graph below for more explanation).

 

As you can see, every location has experienced a decline in the amount of available inventory, some a very dramatic and sharp decline.  This is the precursor to the next step, rising prices.  It’s important we see prices rise gradually, over time, or we will experience another cycle like we saw in 2005.  I don’t think anyone wants to do that over again.

Bottom line, if you are on the fence about buying or selling, jump!  The market is ready for you.  To strategize to your specific needs, please contact me.

 

July 2020 OBX Market Report

A lot of people have been asking me why the market has suddenly taken a turn. Fortunately this time, it’s a really good turn! The answer is quite simple if we take a look at the history of these real estate cycles.

I’ve been saying for over a decade now that these cycles, in recorded history, generally take about 20 years each turn. This is proven true over and over for the last 80 plus years. So, if we take a look at the last few cycle timelines, it just makes sense for this to be happening right now.

1985/6 – Real estate was booming – then – stock market issues, S&L crisis began
1988/9 – Things really fell apart – prices were at an all time high.
1998 – Prices started to return to the pre-boom spot (I specifically remember an oceanfront lot in Sanderling that we couldn’t give away for $250,000)
2000 – Activity went through the roof – the 10% ratio was introduced – property was selling fast, but no discernible increase in pricing, as the recovery was still in place.
2003 – 2005 – All hell broke loose. Prices soared, inventory was low, multiple offers on almost everything. We all remember those years.
2008/2009 – Once again, 20 years later another mortgage crisis and the whole thing fell apart.
2010 – 2019 – Very volatile times, especially for the northern beaches.
2020 – Once again, 20 years later we have another BOOM in activity, some areas are seeing a little boost in price, but overall no real trackable difference. It’s coming though!

All that being said, if you are thinking about buying – rates and prices are still quite reasonable. Income is high. I wouldn’t wait.

If you have been wanting to sell, get this…as of this week there are 850 properties under contract and only 792 single family homes active for sale. This is what anyone watching would call the “tipping point”.

I have seen in the last couple of weeks, multiple homes that have been for sale for YEARS, finally going under contract. Pay attention friends, it’s about to be another wild ride!

Here are some weekly stats to consider: (I’ve always said who needs a crystal ball when you track the statistics. This tells us everything we need to know.)

A new strategy is now needed to meet your real estate goals. If you would like to discuss the best strategy for you, please contact me right away!

COVID-19 & the OBX Real Estate Market

The real estate market is adapting quite well to the current restrictions and Stay at Home order that is in place for North Carolina. While we are doing some things the same, since our market is largely based on out of town property owners, many things have changed to keep things going smoothly.

Here’s what’s new:
1. Virtual Showings – While my listings always feature high end professional photography, this week I’m also getting them all set up with 3D Virtual Tours. This will give prospective buyers the feeling of actually being in the room. We are doing FaceTime and Zoom showings for buyers as well.

2. Virtual Open House – Our local MLS is implementing a new feature to promote and hold and Open House virtually. The details of this feature are still being released. This is an exciting update to a market like ours. I can see this being a great new tool used on the regular after this event is over. I’ll be setting up a few of these in the next week. Contact me if you’d like to participate.

3. Appraisals – Local lenders have assured me that when it makes sense, underwriters are giving appraisers the green light to perform desktop appraisals. This way, properties with high risk inhabitants don’t have to be exposed, yet we can still make progress on the sale of the home.

4. Lenders – With the IRS unable to process any transcript requests before closing, our local lenders have been authorized to skip that requirement for the time being. It will no longer be needed to receive a clear to close. This is showing great versatility and willingness to keep transactions moving.

5. Virtual Closings – While NC does not currently support virtual notaries, you may be in a state that does. We have been doing out of town closings as long as I’ve been in the business, so that part of it is nothing new. Virtual notaries are approved in 35 states. So if you have a closing coming up and need documents notarized check and see if they can do it online instead.

6. COVID-19 Addendum – NC Realtors did quickly create and distribute a special addendum regarding this pandemic that allows buyers and sellers to have a little more time to close if delays occur related to the shutdowns. It also allows the buyer to cancel if they get laid off and become unable to close due to not obtaining loan approval. Lenders will still be verifying employment 5 days before closing.

7. Some not so welcome news – minimum credit scores have been raised to 640 or 680, depending on lender. This is up from 580 minimum. We are also seeing some lenders no longer locking in Jumbo rates. So we may see Jumbo loan guidelines get an overhaul and be much stricter (anything over $510,400), and some no longer doing these loans at all for a while.

Overall, it’s all about adapting. Which we are doing. If you are thinking about buying or selling, we can still make that happen for you.

In fact, of the 112 properties that have gone under contract in the last 30 days, more than 50% of them were also just listed in the same 30 days. Some will be more comfortable moving forward at this time, and some won’t. Either way, please let me know how I can help.

Vendor List

It’s that time of year again!  Time to start planning those spring cleans and updates to get the house ready for the season.  Below is a list of vendors I can personally verify to do a good job, show up and charge a reasonable fee. Be sure to give them my name!!!

If you need a vendor not listed below, let me know!

Small Construction & Repair:

Daniel A. Lee
252-599-3904

Landscaping:

Chase Patterson
Albemarle Landscapes
252-256-1883
[email protected]

Jason Woodard
Green Gator Lawn Care
252-204-1537
[email protected]

Carpet Care/Upholstery Cleaning:

Steve Howard
Howards Flooring & Upholstery
252-305-2293

Painting:

John Lifsey 
Kitty Hawk Painting
252-261-1146 office, 252-207-3366 cell

Roofing:

Marion Gee
252-267-5110

Redecorating/Organizing/Staging:

Amy Hilliker Klebitz
Certified Interior Design
910-297-8566
[email protected]
www.amyklebitz.com

Shearl Bell
252-202-3200

Mortgage/Refinance:

Drew Wright
Citizens One
252-256-2018                                                                                                                [email protected]

Kelly Bergenstock
252-619-9037
Shane Cook
Guaranteed Rate
252-207-2665

February 2020 OBX Market Update

For 2020, it looks like good news for the OBX market finally!  Some spots are really on fire right now.  My prediction is we should see some pretty steady growth in the area for the next 3 to more likely 5 years.  This is right in line with the 20 year cycle I’ve mentioned before.  If you remember 2000, we had the big building boom, we started seeing inventory levels drop and noticed a feeling of something big happening.

This is the same feeling we have right now.  Inventory levels are low, interest rates are super low and activity is on the rise.  Here are the specifics:

  • January residential sales were up 22% over January 2019
  • January 2020 had the highest January sales numbers since 2005
  • Under contract numbers for January are up 18% from Jan 2019 and are even up 17% just compared to December 2019
  • Residential inventory is down 11%

Let’s now look at how each area is performing:

Corolla

306 Active Listings      36 Under Contract      10.5% of inventory selling

Duck

68 Active Listings        21 Under Contract      24% of inventory selling

Southern Shores

47 Active Listings           9 Under Contract      17% of inventory selling

Kitty Hawk

35 Active Listings        18 Under Contract      35% of inventory selling

Kill Devil Hills

101 Active Listings      44 Under Contract      31% of inventory selling

Nags Head

121 Active Listings      44 Under Contract      27% of inventory selling

While Corolla is still behind the curve, I do feel like this may be the last year it’s struggling.  It’s about time for a turn around.

If you are thinking of selling now, or in the next year or two, please give me a call so we can discuss what needs to be done to get your home ready for the market.  Buyers needs have changed quite a bit.  To ensure a fast sale for the most money, you’ll need to put your home through my proven checklist of readiness.

2019 OBX Market Report

Being a Listing Specialist requires a certain level of understanding of the local market statistics. Taking an in depth look at the trends causing homes to sell is critical to knowing the big picture.

In the chart presented below, I’ve broken down the relationship between the following:

  • The number of days a home took to sell – which means receive a ratified contract
  • The percentage of final sales price to the original listing price
  • The percentage of final sales price to the listing price at the time of sale

Each of these figures on its own tells a lot, and when combined into a complete picture, tells us many more things. Here are the basic takeaways from this particular data:

  • Out of 2,142 total sales, 32% sold in 30 days or less
  • The homes selling in the fastest amount of time receive the highest percentage of asking price as the final selling price – 97%
  • Properties sold in 31 to 60 days make up 15% of all sold
  • Yet, it seems even these quick sales a small adjustment in price was needed
  • 47% of all properties sold last year did so in 60 days or less

With nearly half of all sales taking place in 2 months time, it presents a clear picture that buyers are ready and willing to take action when they find the right property. Selling at 97% and 95 of asking price, this tells us that price is the main attraction to their fast action. They see value and move quickly.

What does overpricing your home actually cost? Notice the bottom 20% of properties sold, took 6 months to over 1 year to sell.

  • Final sales price was 12% to 17% lower than the original asking price
  • Continue paying monthly for a home they no longer want to own
  • Any repair issues that may have popped up
  • Additional repairs requested from buyer during the sale from inspections
  • Missed opportunity cost from waiting it out

Overall what we can take away from this kind of detailed analysis is, pricing your home to fit the current market conditions will actually net you more in the end. This is why as a highly skilled agent, I’ve learned to always ask you the question – Is it more important to get your price, or to get the home sold?

I’ve studied the data and know, you’ll net more by approaching the market with a value-based price than by “leaving room to negotiate.” That is an outdated strategy that just doesn’t work anymore.

December 2019 OBX Market Report

This month I want to take some time out to go over from a linear perspective, why the Outer Banks market is still experiencing some challenges.  Below you’ll find a snapshot review from 2005 in three year increments to show how things have transitioned during this particular market cycle.

Year                Units sold      Average Price sold

2005                   2104               $555,973

2008                   1045               $427,718

2011                     1333               $370,569

2014                     1611               $370,351

2017                     1995               $385,774

2019                     1959               $401,186

Here’s what this tells us:

  • 2005 was considered the peak
  • 2008 was the beginning of the decline, starting with a 50% drop in units sold
  • 2011 – 2014 was the lowest point for price, showing a 32% drop for the overall OBX market (some areas it was a higher percentage)
  • Units sold has made an incredible rebound from the peak in 2005 with only a 7% difference in the number of homes sold from then to 2019
  • Average price has only recovered by 5% since 2011
  • Average price is still 28% less than the peak in 2005
  • In 8 years, the pricing has changed by only 5% for the entire market

You can see here that while we are selling almost as many homes as before, the appreciation has been extremely slow.  Thus, expecting the price of your home to change drastically in a short period of time on the Outer Banks has proven to be non-existent.

This can also explain why if you purchased a home on the Outer Banks between 2009 and 2017, there may not be much, if any change to the market value of your home.  This is more amplified on the Northern Beaches (Corolla, Duck, 4 Wheel Area) as those pockets of our market are still experiencing an excess of 14 months of inventory.

Without strategic timing, real estate still remains a long-term investment for maximum return.  If you have been thinking about selling your home, consider the following:  If this cycle mimics the last century of recorded history, we are right about year 11 of a 20 year cycle.  Based on that, we should start to see prices really making changes around 2023 – 2025.

Keep in mind though, buyers’ demands have changed.  They no longer want to put in sweat equity, they want homes move-in ready with updates already done.  If you want to wait out the market for the next up cycle, now is the time to start planning any maintenance and upgrades to make your home more valuable and saleable.  If you would like a list of where to best spend your remodeling dollars, send me an email and I will get that to you.  Construction costs have changed drastically since I first began my career in 1997.  Most projects have nearly doubled in cost.  It is prudent to get a trained professional to give you some guidance on how to get the most out of your home projects.