What’s interesting about this time of year, is that we can really see the major trends going on in
the marketplace for the calendar year. I’m highlighting 3 specific points for this analysis.
Inventory
Inventory levels on the Outer Banks, specifically northern beaches, have been particularly
challenging for our market. The fact is, in Duck and Corolla, there are little to no primary sales
taking place. That is, no one is physically moving into or out of that area. Those kinds of sales
are crucial to market health because those people “HAVE” to buy and sell. The truth is, 100% of
the sales that take place in those areas are discretionary.
Nearly every seller we meet says the same thing…”We don’t have to sell.” Which is very true.
You don’t have to sell because you’re not making a physical move, nor are you in financial
distress. It’s important to recognize that 99.9% of sellers we work with, don’t HAVE to sell.
There’s a common misconception that pricing your home to sell in today’s market is the same
as discounting it to force it to sell. That’s simply not true. Today’s market in Duck and Corolla
simply has an oversupply of inventory and an under-supply of buyers. That’s the bottom line.
It’s a resort market where all sales are discretionary. Period. I encourage you to ask the
following question. Just because I don’t have to sell, does that mean keeping the home is in
the best financial interests of myself/family/long term plan? That’s what it really boils down
to. I know it’s difficult to swallow the prices today’s market requires, but consider the whole
picture before making a final decision.
The price in these kinds of markets are 100% dependent on the principle of supply and demand, because buyers don’t HAVE to buy until they find the home that ticks all the boxes for them.
Consider this in Corolla:
– Corolla has 294 homes currently for sale.
– 189 homes have sold so far this year; that’s 19 sales a month
– 19 buyers will buy each month and they have 294 to choose from
– 26 Oceanfront homes sold this year in Corolla
– That’s 2.6 buyers a month
– There are currently 53 oceanfront homes for sale in Corolla
Consider this in Duck:
– Duck has 128 homes currently for sale
– 104 homes have sold so far this year; that’s 10 sales a month
– 10 buyers will buy each month and they have 128 to choose from
– From $400,000 to $800,000 there are 52 homes currently for sale
– 47 have sold this year in that range; 4.7 buyers a month
– 4.7 buyers will buy each month and they have 52 to choose from
This is why inventory is the biggest indicator of value in the market right now. We have seen
major improvement in inventory levels over the last few years. This year, we are seeing that
inventory move back up, even just slightly. What does this mean? It means that appreciation is
not happening any time soon, and, that depreciation is still a very real possibility. I don’t report
this to be negative, just to be realistic. Waiting out the market is not a short term endeavor.
Bottom line…inventory is the single biggest challenge in the northern Outer Banks market.
Until that changes, your price won’t either.
Days on Market
The shining point of our market has been the amount of time it takes to get a home that is
priced right, sold. Priced right mostly means priced for its condition. Condition has become the
single greatest factor in a buyer’s decision. They will bypass location for an updated home
almost every time. For more information on the impacts of condition, click here.
The days on market number has gone DOWN again this year by another 20%. This is the third
year in a row this number has dropped by 20% or more.
What does this mean?
– Buyers are watching and waiting for the best value. They study the market for 18
months or more before making a decision to buy. When they see a home that is a good
value, they act quickly and with near full price.
– If your home is on the market for more than 118 days, buyers don’t consider it to be a
good value.
The real estate market is fluid. Pricing your home on one day based on the competition is only
as good as that competition stays the same. As homes sell and adjust their price, you have to
flow with it. In this kind of market, you can either lead with an aggressive price and sell, or,
follow the price others set for you as they sell. Why leave your pricing up to someone else’s
motivation?
Total Sales
Not only did the number of homes going under contract drop by 19% for October, the total
number of sales year over year is down by 10%. Blame the hurricane, the election, whatever
you like. It doesn’t change the facts.
Here’s the deal…interest rates are up, inventory is slightly up, sales are down by double digits.
I’m not telling you this to create panic. My job is to sell homes regardless of the market
conditions, which I have done for over 22 years. My job is also to keep you informed on the
trends, as they are happening. We don’t have a crystal ball, so statistics are the next best thing.
