January 2025 Update
January 22, 2025 By Ilona
2024 market saw a few distinct changes. Higher inventory and massive price reductions. We are already starting to see a small change in pricing – roughly 5 – 7% depending on location. If inventory keeps rising, we could see the pricing change go up.
Here’s how December Year over Year looks:
|
December 2024 |
December 2025 |
|
| Active – 585 | Active – 434 | *Single Family |
| U/C – 244 | U/C – 235 | *All Classes |
| Absorption Rate – 6.59 | Absorption Rate – 4.89 |
As you can see inventory is up 35%.
Yet the number of properties under contract is about the same. While that number has not gone down, what happens when you have more homes for sale and the same or fewer buyers? Law of supply and demand is in play. That is why the absorption rate (months of inventory) has gone up so much.
The statistics are telling us the slow down will continue this year. With mortgage rates higher and mortgage applications at their lowest levels ever, we could see a double-digit drop in pricing this year. I’ll be watching!
2024 Second Half of the Year Weird Market Selling Strategy
June 26, 2024 By Ilona
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.
Sell
- Good news! Prices are still at record highs. You have not missed the boat.
- However, pricing strategy must remain fluid. No longer set the price and then 3 months later look at it. If you want to maximize profit here, you must be the trend setter, not the follower.
- Inventory is rising – up 29% from this time last year
- Demand is dropping – down almost 10% from last year, and last year demand dropped 50% from 2022
- Price reductions are increasing – in May 368 new listings came on and 287 listings had a price reduction
- Must be negotiable – 66% of properties sold are below asking price.
- Affordability is still the number one concern for buyers
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.
Keep
- Remember how these cycles have worked over the years.
- Boom 1985/86 – fell apart early 90’s – stagnant until 2000.
- Boom again 2004/05 – fell apart 2008/09 stagnant until 2019/20.
- Boom 2021/22 – 2023 activity dropped by half, pricing is just starting to crack with price reductions and under asking price sales.
- If the pattern continues it could be stagnant again until 2035 or longer.
- Rising Insurance as well as other increasing vendor costs.
- be prepared for at least a 14% increase in dwelling policies and unknown yet for homeowners.
- Service providers are increasing costs: lawn care, pool/hot tub maintenance, linens, etc
- Return to pre-pandemic rental income.
- It starts with lower vacancy rates. 2024 is already seeing only 90% booking.
- Next will be set lower rates – discounts are already happening.
- If you stay, the cost to own will go up, with income to support going down.
- Prepare for capital improvements.
- Tightening insurance underwriting regulations are requiring updates to stay insured. Roof, water heater, etc
- Continued lack of demand for homes that have not been updated. Especially as inventory increases, you’ll need to have prime condition and updating to be chosen.
- Reality of a major storm this year or next. Let’s face it, no one likes to say it, but we haven’t had a hurricane since 2018. Generally, we see a 6 to 9 year pattern.
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.
December OBX Update
December 12, 2023 By Ilona
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!
Happy March!
March 1, 2023 By Ilona
What a mild winter we have had here at the beach so far. We are not complaining, that’s for sure.
I’ve got a couple of pretty interesting topics this month…let’s dive in.
Market Report
Anyone who knows me knows I’m generally an optimist by nature. I have to say some of the economic factors going on are raising my level of concern for our local market this year. While the OBX is a primarily second home market, we are late to see the effects of the primary market shifts. Believe me, changes are on the way, click here for more.
Mid Currituck Bridge
Ah yes…the long-awaited bridge. If you’ve been waiting around for this thing since the 90’s like me, you will probably see this as a nice reminder this project is not completely dead, and also hard to get hopeful again. Read more here.
Taste of the Beach
Yes, it’s March and time for my absolute favorite OBX Event of the year! If you’ve never been, you are missing out on some of the best dining experiences we have to offer. If you can make it to town the weekend of March 24 – 26th, you won’t be sorry! Let me know what some of your favorites are! Click here for the event website.
Agent of the Year
I was honored and excited to receive this award again for 2022. I’m grateful to my wonderful client base and friends for the amazing support I’ve had in my career. This is year 27 for me in the business. I have been very blessed. Read more here.
2023 Outer Banks Market Predictions
January 5, 2023 By Ilona
After a few years of a WILD RIDE, things are finally starting to stabilize here at the beach. A normal market (no real swing in value up or down) is defined by an inventory of 4 to 6 months. We are currently just under a 5-month inventory, putting us smack in the middle of that range. With this as our starting point, where might we be headed?
Pricing – Currently, pricing still feels on the high end. The 15 buyer deep multiple offer scenarios are long gone, but we haven’t quite seen a sharp change in pricing just yet. However, would you be surprised to know that even in the thickest part of the frenzy, still, 50% of all properties sold were for LESS than the asking price? Below is a comparison of what the market did in January of 2022, fast forward to November, and then the average for the entire year of 2022.
2022 Closings Jan % Nov % YTD%
Full Price 23.86% 22.05% 23.90%
Over List Price 21.05% 15.90% 25.54%
Under List Price 55.09% 62.05% 50.55%
PREDICTION #1 – 2023 by year’s end we will move to 80% of homes will sell for less than list price.
Activity – As I mentioned in the email, we are already seeing a 52% drop in the number of properties under contract as well as 50% drop in the number of sold from this same time last year. Under contract percentage of inventory hit a peak of 48% and is now down to 26%. So activity has SHARPLY moved downward. An inventory bump of only 10% would push us over a 6 month supply and that is when we will likely see a major effect in pricing.
PREDICTION #2 – By June/July, the inventory will peak to a 7 or 8 month supply and pricing will start to be greatly affected.
Rentals – With the airline industry crippled in personnel shortages, among other things, including cost, our rental season will continue to be very strong this year. People will prefer driving destinations over flights. Our own rental numbers continue to show a steady growth patter for 2023.
PREDICTION #3 – If you do desire to buy or sell, rental income will remain a good investment strategy.
Interest Rates – We are seeing rates right around 7% for conforming, unless you choose the ARM option for either 7 or 10 years depending on the lender. Banks right now are showing more favorable terms because they are able to designate more money to shelf these loans long term. We know the FED wants to slow the interest rate increases, but with the recent $1.7 Trillion bill passed, it’s unclear how they will do that.
PREDICTION#4 – It looks like rates will hover in the 6.5% to 7.5% range. If you want to take a chance on an ARM, that can get you lower.
Buyers – It’s no secret that the market is mid-cycle. All the economic factors are present. So if you want to sell your home in 2023, before things cycle back down, it’s important to understand the current buyer mindset. Fewer buyers are in the marketplace, and as inventory goes up, it will start to push prices down. However, I still believe real estate to be one of the best investments to make in an uncertain economy. Why? The value of the dollar is ever decreasing. Real Estate is a tangible asset. It has value beyond the “sales price”. It can generate passive income, be used personally, create some tax benefits, etc. I’m not worried about being able to find a buyer for your home. What I do know is that financial experts will advise buyers to pay less in anticipation of a pricing adjustment. This only means you have to truly strategize all aspects of the sale, not just price.
PREDICTION#5 – Condition, price, seller concessions for buying down points, lower due diligence offerings, staging the home, will become even more valuable negotiation points than we have seen in the last 2 years.
I’m personally excited for the market in 2023. This is when truly skilled agents get to shine! Negotiation skills and strategy will be more important, and so will having a professional on your side. If you have any questions about buying or selling, reach out!
July 2017 OBX Market Update
July 25, 2017 By Ilona
Here are the highlights:
- Total Sales: Total June sales – 279 Units – the highest monthly number of units sold since October 2005. Total Volume Sold – $427,942,964.
- Under-contract: Units listed as under contract declined by 11% due to the record number of closings in June and the normal seasonal decline; however, with 410 units still listed under contract, the July sales figures should be noteworthy.
- New Construction: As of May 2017, the number of new construction building permits were down 7% from 2016 (112 units vs 121 units). Building permit value was down by 3%. Quite a change from last month.
- Days on the Market: For all residential properties listed in the MLS, the average Days on the Market was up slightly (3%) but down by 24% when compared with June 2016.
- How Sold: In our market, 66% of all loans are conventional loans, 20% are cash, 6% are VA, 4% are FHA, 3% are Jumbo. USDAA and Other account for the remaining loans.
- Distressed Sales: Distressed sales declined by 2% in June and accounted for just 5% of the total.
- Inventories: Residential inventory was down by 13% in June. Lots / Land inventory was down by 16% in June.
*This information is reprinted with permission from the Outer Banks Association of REALTORS
Let’s break it down by area and price range: (Data through July 15)
Corolla
$200,000 – $400,000 $401,000 – $600,000
46 for sale 81 for sale
49 sold YTD 51 sold YTD
7.5 buyers each month 8 buyers each month
6 months of inventory 10 months of inventory
8 U/C currently 16 U/C currently
128 Days on Market 198 Days on Market
$601,000 – $800,000 $801,000 – $1,000,000
53 for sale 27 for sale
20 sold YTD 7 sold YTD
3 buyers each month 1 buyer each month
18 months of inventory 27 months of inventory
5 U/C currently 3 U/C currently
92 Days on Market 137 Days on Market
$1,000,000 – up
66 for sale
16 sold YTD
2 buyers each month
33 months of inventory
4 U/C Currently
102 Days on Market
Duck
$200,000 – $400,000 $401,000 – $600,000
9 for sale 33 for sale
9 sold YTD 26 sold YTD
1.3 buyers per month 4 buyers per month
7 months of inventory 8.25 months of inventory
2 U/C currently 6 U/C Currently
133 Days on Market 120 Days on Market
$601,000 – $800,000 $801,000 – $1,000,000
23 for sale 20 for sale
9 sold YTD 9 sold
1.3 buyer each month 1.3 buyers each month
17 months of inventory 15 months of inventory
4 U/C Currently 2 U/C currently
81 Days on Market 149 Days on Market
$1,000,000 – up
27 for sale
7 sold YTD
1 buyers per month
27 months of inventory
2 U/C currently
186 Days on Market
Southern Shores
$200,000 – $400,000 $401,000 – $600,000
15 for sale 29 for sale
21 sold YTD 18 sold YTD
3 buyers each month 2.7 buyers each month
5 months of inventory 11 months of inventory
4 U/C currently 4 U/C currently
72 Days on Market 94 Days on Market
$601,000 – $800,000 $801,000 – $1,000,000
12 Active 8 Active
4 sold YTD 2 sold YTD
.6 buyers each month .3 buyers each month
20 months of inventory 26 months of inventory
1 U/C currently 1 U/C currently
259 Days on Market 74 Days on Market
$1,000,000 – up
12 Active
1 sold YTD
2 U/C currently
361 Days on Market
2016 Rental Report
May 10, 2016 By Ilona
I recently attended a meeting where a report was given from the Outer Banks Tourism Board. There is a reported decline in bookings of about 8% across the board. What they’re finding is two fold:
- More Americans are traveling abroad/overseas this year as our dollar exchange is good in Europe and some other locations.
- More and more visitors are waiting to reserve their homes until the specials come out, hoping to get deeper discounts.
Apparently some rental companies on the coast of South Carolina are experiencing the same occurrence.
If your home is lacking a few weeks, I would like to extend an offer to promote the house for you on my Facebook Business Pages and Twitter account, where I have nearly 2,000 followers collectively. I can’t guarantee any results, but more exposure certainly can’t hurt. Send an email to my Marketing Assistant Michelle at [email protected] with your house information and a link to it and we will get you in the rotation.
