The Outer Banks Real Estate Market is still recovering from the bubble that started busting around 2005. There will be roughly 1500 homes sell this year and we expect that number to be about the same for next year.
While things are starting to stabilize here, it doesn’t come without challenges. Listed below are some Hard Truths about selling a home on the Outer Banks today. These are not easy things to say, or to read, but my goal is always to be completely up front and honest about what it takes to make it happen.
- Inventory levels still far exceed a 1 year supply. Right now we have 17 months worth of inventory, IF no other homes come on the market. It would take 17 months to sell out what we have based on the number of current buyers per month. Consider then, that on average each month 385 new listings come on the market. Only 175 are selling. With a current inventory of 3000…that creates a supply and demand issue, which is the main factor keeping prices down. How can prices possibly rise with supply and demand that far out of balance?
- Condition is the number one concern for buyers. The price MUST match the condition of your property. This includes cosmetic updates. Buyers are so price conscious today that they want move in ready. Your home may have been meticulously maintained, but because of high inventory levels, a buyer can purchase a home that is updated for the same price or slightly more. They will pay it to avoid having to put any more out of pocket up front.
- Waiting it out will take longer than you think. I hear almost daily that a seller will wait another year before selling. Honestly, there’s no financial or logical data to support that decision…unless you’re just simply not ready to sell. Prices are not going to turn around overnight. Consider point number 1. If it will be at least 1.5 to 2 years to filter out the inventory problem, then your home is still worth 10% to 15% to 20% less than what you really want for it, how long could it take for the value to rise by that percentage? All the while, the home is getting older and you’re coming out of pocket to support it. In many cases the cost to keep it while waiting the market out will be the same or more than the increase in value.
- Overpricing your home is the biggest mistake in a volatile market. By overpricing your home, you’re simply helping to sell the competition. We see it over and over. By the time the price is finally reduced to cause a sale, the home sells for less than it could have sold if it was priced correctly 6 to 12 months ago. See the next point.
- Don’t be fooled, prices are still going down. Considering the average time on the market is 240 days and normally there will be 3 to 4 price reductions to procure an offer, those are both huge indicators that prices are still dropping. No, they aren’t dropping by catastrophic percentages like a few years ago, but 2% to 5% is still money out of your pocket by waiting or chasing the market with a price too high.
- The Outer Banks market is still very much trying to recover. Did you know that only 10% of the properties on the market today are under contract? Yes, you read that correctly. 90% of the properties for sale today are not selling. Only 10% are under contract. Can you see now how important price is in today’s market?
- You can be the leader or the follower. When you price your home aggressively to sell quickly, YOU get to set the price! By waiting and letting other homes sell before you, usually at lower prices, you become subject to their lead. While it may feel like you are leaving money on the table, the truth is you priced your home to sell and it did. Putting you in the lead and ahead of the 90% of homes that aren’t selling.
- It has been 10 years since 2005. I know it may sound harsh, but that ship has sailed. I sometimes joke that 2005 called, they want their prices back! It’s time to let go of the idea that 10 years ago your home was worth X number of dollars. Your home is now 10 years older and the market is drastically different than it was then. The truth is those prices will come again, in 15 to 20 years from now. Holding on to the past is never sound advice. If you truly want to sell your home now, you have to let go of 2005.
- You are not “giving your house away.” Pricing your home to sell in a market that is struggling to recover is not the same as giving it away. Prices change. Markets change. Trends change. Today’s market has different rules than yesterday’s market. Refer back to point 8.
- I know you don’t HAVE to sell your home. On a daily basis I hear this from sellers. “Well we don’t HAVE to sell it.” Of course you don’t. It’s not like you live here and are moving for a job transfer or downsizing or upsizing. It’s a second home. The motivations to sell vacation homes are very different. However, you probably do WANT to sell it. And if you don’t sell the home you will HAVE to keep maintaining it..HAVE to keep dealing with renters…HAVE to keep paying for it…HAVE to keep fixing things that break…HAVE to not move on to the next thing. Bottom line is if you really don’t WANT to sell it, don’t list it. We already have an inventory problem. Keep it off the market until you are truly ready to do what it takes.
- I am the best agent for the job of selling your home. I will likely take a lot of heat for this list. Which I’m prepared for. I know that in challenging times like this I HAVE to be committed to telling my clients the truth and getting things done. If I sugar coat it, you’ll lose money and that is absolutely unacceptable to me. Time and time again sellers have not taken my recommendation and ended up on the market longer than necessary and selling for less than had to be, just to “see what happens.” I’ve been through 2 of these major cycles in my 19 years of doing this. I can tell you what will happen. I just did in these 10 points.
I hope you can appreciate the spirit in which I share this information with you. If some of these were hard to read, then I did my job. Nothing would make me happier than to sell your home for more money, yet nothing will frustrate you more than if I don’t sell it at all.
