The buzz around town is that 2017 was a banner year for sales. So, is it true? The
answer is not a simple yes or no. There are many facets that impact a real estate
market.
The truth is, it depends on which side of the fence you’re on as to how you’ll measure the
market activity. Let’s look at the 5 ingredients of a market, in what I would consider
the order of importance:
1. Price – This of course, is the top concern for buyers and sellers. The
definition of a good market to a seller will usually come down to what
price they can get for their home.
2. Inventory – This is truly the one factor that can make or break a market.
Inventory controls price. We all know the principle of supply and
demand and how that impacts the value of a home.
3. Activity – The number of properties sold annually is a major factor and is
dependent on the previous two factors. If no one is buying, it keeps
inventory high and prices very low. We have two main markets on the
OBX (Duck and Corolla) where the sales that take place are 100%
discretionary. With no primary market forcing sales to take place, this is
keeping the inventory at high levels.
4. Interest Rate – Rising or falling interest rates impact the buyer’s
purchasing power. We are still experiencing very low rates, for now. All
signs point to some increase this year.
5. Buying Trends – This factor is the one least considered by sellers,
mistakenly. Especially in a resort market. Most sellers assume the
buyers are going through the same thought process they did when
buying. That simply isn’t true. Today, buyers place the most weight in
their decision on condition. After 20 years in the business, this is
definitely a shift in process.

So how did the Outer Banks fare in 2017 relative to each of these 5 categories?
1. Price in most locations has not changed. There is still no area with any
measurable appreciation and some areas (Duck and Corolla) are still
subject to some minor depreciation due to continued high inventory
levels.
2. Inventory is on the decline. In 2017 we had the lowest monthly inventory
levels since 2010. That is excellent news and a great sign of continued
recovery for our market.
3. Activity was up over 2016. Like any market we experience cycles. Any
time there is a double digit increase in sales, the next 3 to 4 years become
a little stagnant. That’s just how markets cycle. When you hear that the
OBX market was on fire last year, this is likely the aspect one was
referring to. This increase in activity really helped lower the Days on Market.                                 However, pricing for the market is the greatest contributor to that.

Year                    2012      2013      2014       2015       2016      2017
Total # Sold      2042      2093     2139      2292      2289      2560
Increase from
Previous Year    21%         2%        2%           7%         0%        11%

4. Interest Rates remained steady between 4% and 4.25%. Your guess is as
good as mine as far as what will happen with that this year. Stock market
gains are making it easier to diversify and invest in real estate.
5. More homes were passed up in 2017 because of outdated condition than
any other reason. If you want to sell quickly, you’ll either need to price
your home for it’s condition or invest in a few upgrades.

If you’d like more information on buying or selling this spring, contact me for more
information.

Sales and Under Contract Properties


Our positive sales continue with single family residential sales units remaining up 14% YTD 2017 over 2016 and the corresponding dollar volume is up 17%.   

Residential land sales, YTD 2017 over 2016, are up 11% in units and up 3% in dollar volume.  The median sales price is up 1% year over year.

Inventory


Currently the market sits at about 10 months worth of residential inventory. This is a very encouraging sign and is a combination of strong sales and lower inventory levels.  It is EXTREMELY important to remember that this varies GREATLY by area and town.  We still have some areas that are not experiencing these results.  It is important to understand what the number is for your area.

New inventory that came on the market in November was up 2% from November 2016.  

Average days on market for SOLD single family residential YTD 2017 is 152, down from 208 days in 2016!  Average days on market for all current active single family residential listings remains at 215 days. 

Distressed residential properties comprise 6% of sales YTD which is flat to 2016.  Distressed listings currently comprise only 1.5% of active inventory.

Pricing

Single family residential median sale price YTD 2017 is $323,000, which is up 3% over the year prior.

This data here represents the percentage of total homes sold in each respective year relative to the sales price range. When we see an increase in median price, it can sometimes be just more sales occurring in one price range versus an actual increase in price. I think for 2017, both are actually true. We did see actual appreciation in two markets. Kill Devil Hills Between the Highways as well as Kill Devil Hills Westside.

 Price Category                     YTD 2016      YTD 2017
Below $199,999                               14%                  13%
$200,000 – $499,999                    68%                 66%
$500,000 – $749,999                     11%                  14%
$750,000 – $999,999                      4%                   4%

$1,000,000 and up                           4%                   4%

Area Median Price % Change YTD        2017 to 2016 Units Sold % Change YTD            2017 to 2016 Corolla $476,250 +12% +5% Duck $465,500 +6% +30% Southern Shores $422,500 +6% +23% Kitty Hawk $307,500 –% +3% Colington $252,500 +8% +9% Kill Devil Hills $275,750 +4% +5% Nags Head $380,000 -1% +20% Hatteras Island $300,000 +12% +12% Roanoke Island $281,880 +7% -10%

 

We had a mild August for weather, not for real estate sales.  With interest rates still very low and activity increasing, we fully expect a great fall market.

Here are the main highlights:

• Condition – Buyers are becoming more and more selective about the condition of the homes they buy. Their expectation is to have the updates and upgrades already done.  Updates = recent roof, windows, doors, siding, paint, HVAC.  Upgrades include granite counters, stainless appliances, tile or hardwood floors, cabinets in kitchen and bath.  It’s clear, do the updates/upgrades or drop the price.
• Homes listed and sold since January 2017 are going in only 45 days. Many with multiple offers.  Buyers have been watching the market for years.  They know when a house comes on the market at the right price and they are ready to act.
• Residential inventory is down by 8%. This is a nice continuation of what is needed to stabilize the market in Duck and Corolla.  Because those areas are primarily second homes, the inventory has been stuck very high.  That has been putting more pressure on lowering prices.  We are slowly getting there, yet still a year or two away.
• Distress sales made up 2% of all sales for our local market. That makes these sales a complete non-issue as that is a normal amount for any market.
• So far this year 18 more homes have sold in Corolla than last year (an increase of 10%). In Duck there were 34 more homes sold this year, up 38%.  Overall the entire market is up by 11% (1310 homes sold 2017 vs 1176 in 2016)

If you have any questions about buying or selling on the Outer Banks, please contact me.

The following is a summary of the Outer Banks market as a whole, reported by the Outer Banks Association of REALTORS and reprinted with permission.

• Total Existing-Home Sales: Existing home unit sales are up 19% compared to 2016.
• Under-contract – With 473 units in an under-contract status, sales in May should rise dramatically.
• New Construction: New Construction building permits are down 31% compared to last year and total building permit value is down 20%.
• Days on the Market: For all residential properties listed in the MLS, the average Days on the Market was 162 days; however, when looking at only the residential properties listed on the MLS since January 1, 2017 (1157 units), the average days on the market was 50 days.
• All-cash Sales: Nationally, 23% of all home sales are for cash. Locally, we are also selling at the national average.
• Distressed Sales: Bank Owned properties and short sales made up 7% of all residential property sales in in April. So far, this year, short sales are down by 25% and bank owned sales are up 19%.
• Inventories: Housing inventory was down by 15% in April.

What are the clear bright spots in this report?  Inventory is down, which is desperately needed.  And, those sellers willing to price the home in today’s market are rewarded with a fast sale.

Remember, most buyers will spend 12 to 18 months looking around before purchasing a second home.  So they know what a good value is.  When it hits the market, they are ready to move!  They are also ready to pay close to the asking price.

So what does this mean for your home’s value?  The areas of Corolla and Duck are still quite a mess.  Southern Shores is doing somewhat better.

The data below that indicates for each price range the following:

• How many homes are for sale in that range
• How many have sold this year
• Divided by 5.5 months = how many buyers are available in that range each month
• Divided by the number for sale = the months of remaining inventory for that price range
• How many homes are under contract, scheduled to close
• The median days on market for homes sold in that price range

Corolla                                                            

$200,000 – $400,000                                       $401,000 – $600,000

41 for sale                                                              81 for sale

30 sold YTD                                                          28 sold YTD

5.5 buyers each month                                        5 buyers each month

7.5 months of inventory                                      16 months of inventory

10 U/C currently                                                   19 U/C currently

234 Days on Market                                             229 Days on Market

 

$601,000 – $800,000                                       $801,000 – $1,000,000

60 for sale                                                             29 for sale

10 sold YTD                                                           4 sold YTD

1.8 buyers each month                                        .7 buyers each month

33 months of inventory                                       41 months of inventory

8 U/C currently                                                     3 U/C currently

90 Days on Market                                               166 Days on Market

 

$1,000,000 – up

75 for sale

9 sold YTD

1.6 buyers each month

47 months of inventory

8 U/C Currently

113 Days on Market

 

Duck

$200,000 – $400,000                                       $401,000 – $600,000

8 for sale                                                               36 for sale

8 sold YTD                                                            19 sold YTD

1.5 buyers per month                                          3.5 buyers per month

5 months of inventory                                        10 months of inventory

2 U/C currently                                                    4 U/C Currently

155 Days on Market                                             109 Days on Market

 

$601,000 – $800,000                                       $801,000 – $1,000,000

30 for sale                                                             21 for sale

6 sold YTD                                                            8 sold

1 buyer each month                                             1.5 buyers each month

30 months of inventory                                      14 months of inventory

3 U/C Currently                                                    1 U/C currently

87 Days on Market                                               149 Days on Market

 

$1,000,000 – up

32 for sale

3 sold YTD

.5 buyers per month

64 months of inventory

3 U/C currently

178 Days on Market

 

Southern Shores

$200,000 – $400,000                                       $401,000 – $600,000

14 for sale                                                              32 for sale

10 sold YTD                                                          11 sold YTD

1.8 buyers each month                                        2 buyers each month

7.7 months of inventory                                      16 months of inventory

7 U/C currently                                                     5 U/C currently

105 Days on Market                                             99 Days on Market

 

$601,000 – $800,000                                       $801,000 – $1,000,000

12 Active                                                                6 Active

3 sold YTD                                                            2 sold YTD

.5 buyers each month                                         .36 buyers each month

24 months of inventory                                      16 months of inventory

1 U/C currently                                                     1 U/C currently

254 Days on Market                                            115 Days on Market

 

$1,000,000 – up

12 Active

1 sold YTD

0 U/C currently

547 Days on Market

 

There are 3 main things to pay attention in the real estate market right now.

• We saw another rate drop today, bringing us to a new low in the last 3 months.
• Residential home sales (actual closed deals) are up 22% over this same time last year.
• The number of homes going under contract are also up by 22%.  The market is SUPER active right now.

The homes in the best condition with the right price are even getting multiple offers.  We are also seeing a lot of homes selling in less than a month with that same strategy.  If you’re thinking of buying or selling a home this year, contact me for a consultation.

It’s exciting to have some good news to report!  While the number of homes closed in January 2017 was identical to 2016, the number of homes going under contract is up considerably.

Closed sales for January, reflects homes that went under contract in November or December of 2016.  There were 111 sold in 2016 and 112 in 2017.   Not bad for a resort area.

However, in January this year we saw 231 properties go under contract.  The last time the number for January was this high was in 2006 at 263.   Something happened in the last 30 days to create some amazing consumer confidence.  I’m super thrilled for this year’s activity!!!

Two morals of this story:

• If you are interested in selling your home, there’s NO REASON to wait until March or April. The market is here NOW.
• If your home is already on the market and not selling, chances are you are priced too high. It’s difficult to accept today’s prices, no doubt.  Inventory levels are still too high to see appreciation.  It’s unclear how long it will take to recover, since we are still in the midst of the cycle.

If you’d like to find out what your home could sell for now, click here and I’ll get you a free analysis!

If you’re interested in making an investment on the Outer Banks, click here to find out what you need to know before buying in the area.