Real estate markets across the country are definitely starting to crack. The northeast is really the last holdout and there are signs of a beginning surge in inventory there. With slowing activity and rising inventory, it looks like the OBX could enter a buyers market by the second quarter of next year.

Right now, our absorption rate has us at the high end of a “normal market”. Just a small increase in inventory at today’s demand level will push us over the 6-month level and right into the next category; slow market, which will favor buyers more.

Most aren’t aware of the impending foreclosure tsunami that is coming in the second quarter of 2026. On October 1st, an FHA workout program that has been in place for the last 5 years got an overhaul. Borrowers have been issued loan modifications over and over.

New guidelines in place are:

• Only one modification every 24 months
• Must exhibit the ability to pay the new amount for 6 months
• Cannot be behind on student loans

FHA is reporting one million borrowers are in default at least 30 days. With these new guidelines in place, that puts a lot of homeowners in jeopardy of being foreclosed. It’s a 90 day process
that started 3 weeks ago. By January, we could start seeing these new listings hitting the market across the country.

While I don’t expect it to have a huge impact on the Outer Banks, it will start to affect markets nearby. Being a resort area, we usually get the trickle-down effect, so expect to see possibly even slower sales next year, which will contribute to higher inventory, eventually translating