Outer Banks, NC Real Estate Resource
While there isn’t much change to report this month, I predict by October/November there will be more inventory and the beginning of a quantifiable shift in pricing. You know I’ll keep you posted! To see the full effect of the logarithmic path, I’m comparing January 2024 to July 2024.
| Jan 2024 | Jul 2024 | |
| Months of Inventory | 4.8 | 5.9 |
| Active Homes | 492 | 700 |
| % Under Contract | 24% | 21% |
| Price Changes/Month | 171 | 232 |
You may have heard in the news about the NAR Settlement, and there was a lot of bad information floating around. Having been licensed in NC since 1997, teaching the real estate license law for 15 years, and a member of the Board of Directors for the Outer Banks Association of Realtors, I’m bringing a snapshot of what to expect as we approach the implementation date on August 17th.
Firstly, be aware that NC has had buyer agency in place since 1995. Secondly, sellers in NC have never paid the buyer’s agent. Our listing agreement has a section where sellers “acknowledge” the listing firm may split the compensation the seller pays the Listing Firm, and a disclosure of what that split will be. Our local MLS then served as a binding and blanket offer of compensation from the listing firm to the selling firm. So, in this state, we’ve really been doing it right the whole time.
*Special Note: Compensation has ALWAYS been negotiable and based on the services provided as established by each individual Firm. As of this blog, we truly have seen only a handful of sellers choose to not offer or authorize a compensation to a cooperating firm. We don’t expect there to be a big change in this. Most sellers realize it is in their best interest to cooperate with buyers agents.
The purpose of the non-exclusive agreement is to establish an agency relationship, with limited duties. Buyers can sign this agreement with more than one agent as they conduct their search. Beware this type of searching can result in the agents ending up in a procuring cause dispute. So always be up front and honest with agents to avoid this situation.
If you are out with an agent touring multiple homes and have no written agreement, most likely the agent is not operating in compliance with the Settlement. There are two exceptions: they are not a REALTOR member subject to the settlement agreement, or all homes viewed are listed with the agent’s firm and you are unrepresented.
There are multiple benefits to interviewing and hiring a good Buyer’s Agent, especially in the Outer Banks market where the average price is $800,000. That’s a big investment! Here are some of the reasons:
There’s a reason it takes 45 to 60 days from offer writing to closing a real estate transaction. It is a full time job! I have prepared a full presentation with valuable information. If you are thinking of interviewing a great agent to find your perfect OBX home, give me a call!
As we approach the second half of the year, it’s important to notice the little shifts happening along the way. Remember, real estate markets don’t crash overnight. It happens slowly at first, then all of a sudden. We are in the slowly at first phase.
Our market here gets insulated because it’s not a primary market. Being a discretionary sale and discretionary purchase for the majority of transactions, it provides a lag time from when we start to see primary markets destabilize.
If you are thinking about what to do with your OBX investment home, you need to look big picture. Consider first and foremost, just because you don’t HAVE to sell, does not automatically mean that keeping the home is in the best financial interest for your family. Always consult your financial adviser for guidance.
Let’s now take a look at the two options, sell or keep. Regardless of what you choose, this information will help you set up the best expectations for either choice.
If you employ a listing strategy with this in mind, you will maximize your return and get the home sold in a reasonable amount of time.
If you do decide to keep the home through the next cycle, let’s at least put together a plan to get your home updated and where to best spend the money. I also have a list of trusted vendors who can help you get things done.
Now that you have the big picture, let me know if I can be of any help as we navigate this next market shift.
In a nutshell, the market here is changing…slowly…but surely. These types of cycle shifts don’t happen all at once. Fortunately, because I study the market every day, I can help you see it coming. After all, you can get out of the way of what you don’t see!
Inventory
Total Everything – up 27% since January (currently over 1,000 listings)
Homes, Single Family and Condos/Townhomes – up 24%
Activity
Absorption Rate has gone from 4.8 months to 5.5 months since January
This means it would take longer to sell the homes we currently have on the market. Once this goes over 6 months, we enter a Slow Market
Price
53.5% of homes are still selling within 0-30 days, of those…
97% of asking price is what they are selling for
67% of homes are now selling under asking price
Basic supply and demand economics tell us that when supply is inching up, demand is inching down that prices will start to waiver. How long will this current market last? We just have to keep watching. We are noticing more price reductions coming in and fewer multiple offers. This is an active situation. Stay tuned for next month’s report!
If you have thought about buying or selling, let me know so we can plan your strategy.
What a difference a year makes! Long story short, there are some BIG moves that are happening. I’ve talked before about algorithmic decay. This chart here is exactly that! Little, by little, by little, then bang. That’s how markets change. Tale as old as time, song as old as rhyme, it’s almost as good as a crystal ball.
Anyone saying the real estate market on the Outer Banks is not changing is just not paying attention.
We are on the cusp of a price shift potentially starting this fall. Here are the facts about our market:
If you are on the fence about selling your home, your window is closing before we start to see quantifiable price shifts. Call me today to discuss the best strategy for selling in today’s changing market.
A lot of agents will do presentations on how they came up with a price for your home. It is a task that does require some skill. The challenge of course is getting the seller to agree to the pricing suggestions.
Many sellers come into the meeting with a general idea of what they want for the home, which is helpful. However, here are a few ideas on what NOT to do when you decide to sell your Outer Banks home in today’s market.
Now that we’ve covered what NOT to do, if you need help pricing your Outer Banks home for a prime spot in our market today, certainly let me know how I can assist you!
From what I have been told, there were many meetings amongst lots of organizations, Homebuilders Association and NC Realtors are included in the reshaping of the wastewater regulations. Negotiations were settled, the meeting concluded, and everyone went home. The night before the vote, the bill is sent out. Unbeknownst to all signings, changes were made in favor of the Septic Tank Association’s lobbyists, resulting in the incoming “shituation” we have now. This DID come from the private sector and the only way out of it is legislatively.
SO WE HAVE TO ACT!
Our local Realtor Association had a meeting on January 30th with the Dare Supervisor for Environmental Health, Josh Coltrain. A video of that meeting can be seen here. It is 36 minutes long, but well worth your time to watch.
If you don’t have time to watch, here’s the basic breakdown and major takeaways:
So basically, if you are on a LOT with a designated repair area, these regulations apply to you. If your system fails for ANY reason:
With 90% of LOTS in Dare County having an onsite wastewater system, this impacts an enormous group of homes. This is simply not sustainable.
The meeting that Josh Coltrain was to attend in Raleigh this week was postponed. I don’t have the new meeting date at this time. What I do have is an email you can send questions to for
Josh to take to this eventual meeting to ask. That email is [email protected]. Feel free to send any real life scenarios you may have encountered, burdens these regulations have already
caused or just questions you want answers to from our legislators.
In the meantime, the NC Senator for District 1 (Dare) is Norman Sanderson and his information can be found here
Bobby Hanig, NC Senator for District 3 (Currituck) can be found here
I’ve already been in touch with both and have had great response from Sen Hanig’s office. NC Realtors has legislative committee members hard after this issue as well. This is a statewide
issue so if you have any connection to any NC State legislator, let them know this must change!
WE NEED TO MAKE SOME NOISE!
If you want to find out how this specifically impacts your home personally, call the Dare Environmental Health Department at 252-475-5080. Or Currituck at 252-232-6603.
I’ll keep you informed as I have more updates.
With all the insurance and septic news, I’m going to be brief on this month’s market report and just give you the numbers straight up. With only one month in, there isn’t a lot to analyze anyway.
Not much has changed since December, except in Kill Devil Hills showing the only noticeable difference. Which is not unusual for this time of year. We will compare again in April and see if anything changes.
Area Active Now Active Dec
| Area | Active Now | Active Dec |
| Corolla | 81 | 88 |
| Duck | 16 | 17 |
| Sshores | 16 | 17 |
| Kitty Hawk | 15 | 18 |
| KDH | 49 | 60 |
| Nags Head | 43 | 40 |
Not a lot going on just yet, but don’t worry things will heat up in a few weeks! I’ll be watching.
If you’d like more information on buying or selling, please reach out.
History repeats itself. A saying I’m sure you’ve heard and said dozens of times. I might not yet be a half of a century old, but I’m old enough, and have been in this business long enough (27 years) to recognize a similar pattern. Let’s revisit the timeline of the Outer Banks real estate market from the year 2000.
Year/Sold Units Sold Average Price Sold
2000 n/a* $275,000 *I don’t have access to the # of sales that far back
2005 2104 $555,973
2008 1045 $427,718
2011 1333 $370,569
2014 1611 $370,351
2017 1995 $385,774
2019 1966 $400,592
2020 2614 $520,009
2021 2889 $668,994
2022 2096 $770,901
2023 1446 $746,351
Now, I know that is a lot to unpack. All of this data is telling me that the drop in home sales is a clear indication that we have reached the peak and are on the way back down and soon. The last peak was in 2005, and the crash is attributed to 2008. That 32% decline in pricing didn’t happen overnight. It was spread out over a few years.
Let’s talk about unaffordability for a minute. This is not just an interest rate issue. In fact, even if interest rates come down to 5% again, it will only create a small impact on the overall cost of owning a beach home.
So, does this mean I’m saying it’s not a good time to buy? Not at all! It’s just not a good time for EVERYONE to buy. How so?
However, if you are a current homeowner and your retirement plan includes the proceeds of this home, you may need to really consider how long you can/want to keep it. If you aren’t in to see this next cycle through, you have a prime time this spring to take advantage before what I believe is the end of this bull market.
Factor in the waning rental occupancy, rising costs, and the boomers knowing it’s time to cash out, it appears we will see an influx of inventory this spring. That will be the one catalyst to start a more rapid decline in pricing.
Please know that it’s never my intention to be a downer; I’m just a realist. You can’t avoid what you don’t see coming. It’s coming. I was taught that you can’t make the best decisions without looking at all the information. Please reach out if I can help you strategize your move in 2024.
Let’s take a basic approach this month.
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.
Similarly, sales are also at their highest in the spring market. Here, we see a normal 14% drop so far for fall.
It’s still not taking long to get properties sold.
Pricing hasn’t changed very much, despite seeing more price reductions. We aren’t seeing a tangible change just yet.
While mortgage applications are down, it’s not impacting us yet.
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.
