April Newsletter

Happy April!  I hope you had a wonderful Easter weekend.  Beautiful weather has finally arrived at the beach.

I have a few interesting topics this month.

Insurance – While prices are rising, so could insurance costs.  There are some pretty significant changes that you need to be aware of if you are buying or selling.  First and foremost, make sure your insurance coverage is sufficient.  Lumber costs have gone up 112% since last year.  Make sure you check in with your agent to be sure you are covered.
For the rest of the changes, click here to read the full article.
Top 5 Destinations – If you thought last summer was busy, just wait.  You’ve probably seen this graphic floating around on Facebook…here’s the full article if you’re interested.  Be prepared for a wild season, and if you haven’t booked already, you may be out of luck.  Go ahead and book for next year too, just in case.
Market Report – Not much has changed in terms of activity.  The market is still very active!  For a breakdown of inventory/activity per town click here.

Insurance Changes for Outer Banks Rentals

As part of my continued effort to provide you with the most relevant information, I wanted to reach out with some important updates regarding insurance for your Outer Banks investment.  These changes primarily involve Frontline Insurance, which is considered one of the most affordable companies available.

If you are considering selling or buying, be mindful of the following:

  1. Frontline Insurance will not write a home policy if the hot water heater is more than 15 years old.
  2. They will allow a maximum of 26 weeks rented.  With our extended renting season these days, this could really become an issue. Frontline is strict with the maximum of 26 weeks of rental. Renting for more than 26 weeks could seriously affect a claim.
  3. Effective this year Frontline will no longer write any policies in Dare County on homes older than 1/1/2005.  This leaves the only wind insurance option to NCIUA.
  4. If your home has polybutylene pipes, only a dwelling policy can be issued and no coverage exists on any issues with those pipes.  Replacement of the fittings is no longer a suitable fix. The dwelling policy is more expensive and doesn’t offer as good coverage.  Replacement of the fittings is no longer a suitable fix. Insurance agents recommend avoiding homes with Poly Plumbing – or – have the owners re-plumb the home prior to purchase.

This information is just to create more awareness.  I have some good local contacts if you have further questions, just let me know.

Breaking News regarding OBX property

Happy Mid-March!Breaking News regarding OBX property

This month’s update is short and not so sweet. The market activity is still very strong and has not changed…yet.

Big BREAKING MORTGAGE NEWS in the last few days is regarding the purchase of 2nd homes. A new Treasury Amendment now limits Fannie Mae on the acquisition of single-family mortgage loans secured by the second home and investment properties to only 7%. As a result, this could equate to as much as a half-percent higher rate on these loans. Click here for the full article.

No market is immune to these kinds of changes.  If you’re wanting to purchase on the OBX, the time is now!  Of course, that means we need more inventory. If you’re thinking of selling and want a complete analysis of what your home is worth, contact me today!

As always my goal is to keep you updated on the most relevant information.  If there is anyone you know who could benefit from this monthly newsletter, ask them to subscribe here.

IS YOUR HOUSE READY TO GO ON THE MARKET? CHECK OUT THESE 8 TIPS!

It’s no secret the real estate market on the Outer Banks is shifting. Even as we move into a seller’s market, keep in mind a majority of our home sales are secondary homes. This means more than 50% of our home buyers will spend up to 2 years searching for the right home. They can do that because they aren’t physically moving into the home.

Being a discretionary purchase, they have the time to wait for the right house. That means even if you have the upper hand in terms of lower inventory and potentially rising prices, buyers still want what they want. Your home can still sit on the market for a prolonged period of time if it’s not set up to sell in today’s real estate market.

We’ve put together a checklist of readiness to ensure your home can hit the market and sell for the best price in the fastest time frame. Consider the following market statistics:

  • In 2019 there were 1,842 single-family homes sold
  • Currently, there are only 1,079 single-family homes listed for sale (2/20/2020)
  • Almost 60% (58%) of all properties sell in the first 90 days
  • Median days on market is 69
  • They are selling within 4% to 5% of asking price

If closed sales for January and current Under Contract numbers are at record highs, we could easily see 2020 hit the 2,000 single-family homes sold mark. That means we barely have half the homes on the market right now that could potentially sell this year.

The following checklist is designed to get you the most for your home in the current market:

1. HAVE A HOME INSPECTION

Let’s face it, the last time we had this kind of market shift in 2000, a home built in 1985 was only 15 years old. Today, that home is now 35 years old. In the extreme weather environment, we have on the OBX, a lot can happen in 35 years. If your home is more than 10 years old, you need a pre-listing home inspection. The number one cause for deals to fall apart is a home inspection revealing more than the eye can see. Buyers get nervous and walk. When that happens, the entire world knows your home sold, then un-sold, and everyone wants to know why. The items discovered will most likely become a material fact and have to be disclosed to future buyers. If an inspection is done beforehand, major items can be addressed and taken care of. End of story. There is no reason to list your home blindly and set yourself up to negotiate the “unknown” 2 to 3 weeks into a sale.

2. MAINTENANCE ITEMS

Even if a home inspection reveals no issues, sometimes systems will be at the end of their life expectancy. Buyers today do not want to walk into automatic maintenance without expecting a deep discount. If your 20-year roof is on year 18, it is wise to replace it. There’s no guarantee you can add that cost to the top of your asking price, but what it can do is sway a buyer towards your property versus another. The number one concern for buyers today is condition. Your home does not become more valuable because the systems work. However, it does immediately become more saleable.

3. POWERWASH/CLEAN

This should be a no-brainer, yet all the time I show or preview homes that look like they’ve been abandoned. Everyone likes things that look nice. Take an honest look at your home’s exterior and interior. One of the easiest spaces to turn off a buyer is the carport and outside shower area. Buyers say all the time, you can tell how well the owners have cared for this home by how those areas look. Clean up the leaves, sand, junk that can accumulate. Power wash the gunk off the decks and siding. Get the interior a nice spring clean. First impressions don’t generally get a do-over.

4. PREPARE THE ENTRYWAY

What will buyers see as they approach your home, climb the stairs and enter the front door? Is it inviting? Is the door rotted or rusted? Does the key work easily? Are there spider webs or overgrown plants and weeds? This will set the tone for the entire showing. Sometimes buyers will change their minds about seeing a home altogether if the entry isn’t pleasant. Be mindful of the best way to enter your home. If your electronic keypad is on a door that isn’t the best entry, insist on giving your agent a key to the best entrance and have buyers go in that way. I recently went into preview a $750,000 home that was quite lovely. The entrance had imported tile, great artwork and felt very welcoming. The agent gave me a keycode that opened a door to an empty two-car, cold, garage. This is not the first impression you want.

5. YARDWORK

No matter what time of year you list your home for sale, take a good look at the landscape of your yard, which is the main aspect of curb appeal. Having branches scraping the side of your car as you pull into the driveway is not a good look! Do what you can to clean it up for whatever is appropriate for the season.

6. DECLUTTER OR STAGING

Whether you live in the home or it’s your vacation home, have a professional eye look and give advice on how to stage it to sell. Most people need to see space, rather than stuff, in order to envision themselves in your home. Less is more when it comes to wall hangings and nick-knacks. Updating bedspreads and shower curtains is an easy way to give the home a fresh look. If the home is being sold furnished, some fresh, beachy furnishings can make all the difference.

7. UPGRADES

With the new HGTV culture, buyers expect homes to be already updated. This type of preparation can take several months to do. These are the things you want to plan 6 months to a year before you list your home for sale. Depending on whether you live there or rent, everyone can also get a chance to enjoy the upgrades as well. Before spending any money, decide what your budget is and have an agent come over to advise the best use of that money. Some updates will prove a better return than others. We talk to hundreds of buyers a year, so we have a clear idea of what will get you the most for your money. Be prepared though, construction costs have doubled in the last 10 years. You’ll want to really follow a plan to stay on budget and get the most out of it.

8. PROPERTY MANAGEMENT DETAILS

With the growing popularity of VRBO and Air BnB type of rental arrangements, there are some real challenges when selling. Those types of reservations, when done solely through the property owner, are automatically not transferrable when selling. If a buyer is relying on the income of your home to make the purchase, you could run into some real issues at the closing table. Even if you are renting through a traditional property management company, there can be cancellation fees you incur if the new buyer doesn’t stick with your rental company. It’s becoming increasingly more important to employ the proper timing strategy to sell, depending on the source of your weekly guests. Talking to an agent ahead of listing about how the transfer works will help avoid any major stresses once the home is under contract.

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!

Checklist For Readiness

It’s no secret the real estate market on the Outer Banks is starting to shift. Even as we move into a seller’s market, keep in mind a majority of our home sales are secondary homes. This means more than 50% of our home buyers will spend up to 2 years searching for the right home. They can do that because they aren’t physically moving into the home.

Being a discretionary purchase, they have the time to wait for the right house. That means even if you have the upper hand in terms of lower inventory and potentially rising prices, buyers still want what they want. Your home can still sit on the market for a prolonged period of time if it’s not set up to sell in today’s real estate market.

We’ve put together a checklist of readiness to ensure your home can hit the market and sell for the best price in the fastest time frame. Consider the following market statistics:

  • In 2019 there were 1,842 single family homes sold
  • Currently there are only 1,079 single family homes listed for sale
  • Almost 60% (58%) of all properties sell in the first 90 days
  • Median days on market is 69
  • They are selling within 4% to 5% of asking price

If closed sales for January and current Under Contract numbers are at record highs, we could easily see 2020 hit the 2,000 single family homes sold mark. That means we barely have half the homes on the market right now that could potentially sell this year.

The following checklist is designed to get you the most for your home in the current market.

1. Have a Home Inspection
Let’s face it, the last time we had this kind of market shift in 2000, a home built in 1985 was only 15 years old. Today, that home is now 35 years old. In the extreme weather environment we have on the OBX, a lot can happen in 35 years. If your home is more than 10 years old, you need a pre-listing home inspection. The number one cause for deals to fall apart is a home inspection revealing more than the eye can see. Buyers get nervous and walk. When that happens, the entire world knows your home sold, then un-sold, and everyone wants to know why. The items discovered will most likely become a material fact and have to be disclosed to future buyers. If an inspection is done beforehand, major items can be addressed and taken care of. End of story. There is no reason to list your home blindly and set yourself up to negotiate the “unknown” 2 to 3 weeks into a sale.

2. Maintenance items
Even if a home inspection reveals no issues, sometimes systems will be at the end of. their life expectancy. Buyers today do not want to walk into automatic maintenance without expecting a deep discount. If your 20 year roof is on year 18, it is wise to replace it. There’s no guarantee you can add that cost to the top of your asking price, but what it can do is sway a buyer towards your property versus another. The number one concern for buyers today is condition. Your home does not become more valuable because the systems work. However, it does immediately become more saleable.

3. Powerwash/Clean
This should be a no-brainer, yet all the time I show or preview homes that look like they’ve been abandoned. Everyone likes things that look nice. Take an honest look at your home’s exterior and interior. One of the easiest spaces to turn off a buyer is the carport and outside shower area. Buyers say all the time, you can tell how well the owners have cared for this home by how those areas look. Clean up the leaves, sand, junk that can accumulate. Power wash the gunk off the decks and siding. Get the interior a nice spring clean. First impressions don’t generally get a do-over.

4. Prepare the entry way
What will buyers see as they approach your home, climb the stairs and enter the front door? Is it inviting? Is the door rotted or rusted. Does the key work easily? Are there spider webs or over grown plants and weeds? This will set the tone for the entire showing. Sometimes buyers will change their mind about seeing a home all together if the entry isn’t pleasant. Be mindful of the best way to enter your home. If your electronic keypad is on a door that isn’t the best entry, insist on giving your agent a key to the best entrance and have buyers go in that way. I recently went into preview a $750,000 home that was quite lovely. The entrance had imported tile, great artwork and felt very welcoming. The agent gave me a keycode that opened a door to an empty two car, cold, garage. This is not the first impression you want.

5. Yardwork
No matter what time of year you list your home for sale, take a good look at the landscape of your yard, which is the main aspect of curb appeal. Having branches scraping the side of your car as you pull into the driveway is not a good look! Do what you can to clean it up for whatever is appropriate for the season.

6. Declutter or staging
Whether you live in the home or it’s your vacation home, have a professional eye look and give advice on how to stage it to sell. Most people need to see space, rather than. stuff, in order to envision themselves in your home. Less is more when it comes to wall hangings and nick-knacks. Updating bedspreads and shower curtains is an easy way to give the home a fresh look. If the home is being sold furnished, some fresh, beachy furnishings can make all the difference.

7. Upgrades
With the new HGTV culture, buyers expect homes to be already updated. This type of preparation can take several months to do. These are the things you want to plan 6 months to a year before you list your home for sale. Depending on whether you live there or rent, everyone can also get a chance to enjoy the upgrades as well. Before spending any money, decide what your budget is and have an agent come over to advise the best use of that money. Some updates will prove a better return than others. We talk to hundreds of buyers a year, so we have a clear idea of what will get you the most for your money. Be prepared though, construction costs have doubled in the last 10 years. You’ll want to really follow a plan to stay on budget and get the most out of it.

8. Property Management Details
With the growing popularity of VRBO and Air BnB type of rental arrangements, there are some real challenges when selling. Those types of reservations, when done solely through the property owner, are automatically not transferrable when selling. If a buyer is relying on the income of your home to make the purchase, you could run into some real issues at the closing table. Even if you are renting through a traditional property management company, there can be cancellation fees you incur if the new buyer doesn’t stick with the company. It’s becoming increasingly more important to employ the proper timing strategy to sell, depending on the source of your weekly guests. Talking to an agent ahead of listing about how the transfer works will help avoid any major stresses once the home is under contract.