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Welcome Summer!
June Market Report
First let’s talk about banking. Two major players (Citizens and Key Bank) recently pulled out of all mortgages in resort markets. If you remember in March I wrote about the FANNIE MAE requirements for second homes that is making it extremely undesirable to get a conventional loan for a second home (higher rates, larger down payments, etc). This means banks doing conventional loans have to add those loans to their balance sheet as they can’t be sold to FANNIE MAE without the extra high costs, which no one wants to do. This caused these two banks to pull out of the resort markets across the US. Will more banks follow? I suspect at some point they will have to.
What happens if buyers can’t get a mortgage for a second home? Or they become so scarcely available they price themselves out of possibility? Do we become a cash only market? Time will tell!
Meanwhile, rising rates have pushed buyer demand extremely low, and yet inventory is just as low if not lower. This strange anomaly is the only thing stopping prices from plummeting down.
Duck Corolla KDH,KH,NH
2023 29 82 172
2022 68 136 294
2021 58 241 355
Duck Corolla KDH,KH,NH
SFRES 14 45 52
The one thing that could cause inventory to jump this fall is the struggling rental market. Whether it’s inflation, unemployment, or just being cautious, this year’s rental reports are showing some real struggles. Across the country Airbnb owners are reporting 25% drop in bookings. Most owners are making adjustments to the weekly rates to entice bookings. Let’s just say it, the COVID rental bubble is officially over. Back to the way it was before. So, this could cause some of the short term buyers banking on high rental returns to throw in the towel and sell, while they can still get fairly good prices.
Either way, it’s going to be an interesting year for sales. There are several things to watch, mortgage availability, rental performance, and increasing supply. We could end up with a “perfect storm” this fall!
If you are thinking of buying or selling, call me to discuss the perfect strategy to fit your needs.
Outer Banks Market Update – March 2023
As of right now, the Outer Banks is experiencing what is considered to be a “normal market”. That means we are not seeing prices change in any significant way up or down. While prices are still at what is considered to be somewhat inflated, there’s not been real measurable changes so far. Secondly, we still have a balanced level of inventory. A normal market is considered to be a demand level of 4 to 6 months of inventory. We are sitting right in the middle at 5 months of inventory. This means the demand is steady and supply is still rather low. In comparison at the peak times in 2021 and 2022, we had just a 2-month inventory.
This begs the question, where are we headed? There are 3 factors I’m watching to help determine that. What’s great about Beach Realty is we watch the statistics every single week. It’s just as good as having a crystal ball. The numbers change in a gradual way that you can actually see the shifts coming if you’re paying attention, which we are!
Factor 1 – Mortgage Applications
Year over year nationwide mortgage applications to buy a home has fallen 41%. In just a YEAR! It’s currently at the lowest level in 28 years right now. That’s even worse than the mortgage crash that happened in 2008. Coupled with data from NAR, only 29% of recent home purchases are cash. The most obvious cause is rising interest rates and still inflated home prices. As a second home market, over 70% of our home sales are a discretionary purchase. It’s a decision buyers can wait on, especially if they think changes are coming soon.
Factor 2 – FNMA and Second Homes
About a year ago Fannie Mae basically got out of the second home business. Wanting to pull support from second homes and focus more on first time home buyer programs they negotiated a deal with the Mortgage Bankers Association to drastically increase rates on second homes. Which at the time didn’t seem too objectionable on conforming loans because the conforming loan limit was $548,250. With the average second home here being near $700,000, most buyers wouldn’t be affected. Now the limit is $726,200 for a conforming loan, coupled with the most attractive rates being a now 75% LTV, the rates shot up over 7% with one point. Making it even more expensive than ever to buy a home on the Outer Banks with a conforming limit mortgage. I don’t know the exact percentage of second home mortgages that are sold to Fannie Mae, but I think an educated guess would be MOST of them. The only solution is for mortgage brokers to keep the loans on their books and try to offer more attractive rates. Who knows how long that will last and how many lenders will participate. I only know of one broker with that program right now.
Factor 3 – Rising Inventory
As buyer demand continues to soften due to rates and prices, inventory will start to creep up this spring and summer. That could lead us directly into an inventory level over 6 or 7 months by fall. That pushes us back into a buyer’s market. If rental receipts drop this year, as expected, this fall we could see prices take a very noticeable hit. How much is yet to be determined. However, with as high as prices rose over the last few years, even a 10% drop would likely still put the home higher than pricing was in 2019. So all is not lost, for this year at least.
If you’re thinking about selling, NOW is your window. Give me a call to discuss further.
Happy New Year from the OBX
Hello and Happy New Year!

Do you still need a LIVE real estate agent?
As the article I read recently proclaims, America’s favorite springtime sport does not involve a stadium, peanuts or cracker jacks. It is browsing the real-estate market.
Zillow is a great tool if you’re a novice to the market and just want to look around an area, city, or use a zip code to look at property. However from my recent experiences with several clients there is nothing that beats a good agent.
Buying a house is really hard work these days. Between flood insurance issues, the never ending and increasingly more difficult lending process, navigating the 11 plus addenda page legal contract, and the home inspection issues that arise…going this process without a proven professional will ONLY result in frustration and a deal not closed.
The fact is, YOU already have a full time job. So do I…dealing with all of these issues. It used to be that we would advertise, find a buyer, negotiate the terms and then turn it over to the attorney to close in 30 days. Boy those were the days! Not today. I’m finding that I’m more needed in the transaction at day 20 to 45 than even before negotiation.
Sadly most of the lending problems don’t show up until the last minute. The flood insurance issues don’t pop up until the appraisal is done and elevation certificate is issued or turned over. It’s not the same to buy a house today, as it was when I started my career nearly 18 years ago. We had a simple 2 page contract then!
Zillow is not in a position to assist with any of these issues. Only a full time, professional real estate agent with lots of experience is going to be able to successfully navigate the way from contract to closing. Finding the buyer is the easy part…getting the deal closed is where the blood, sweat and tears come in.
Financially Zillow looks even less attractive, at least to me. They are expected to lose 27 million this year. A loss that is double of last year. Wall Street loves the stock and it has done well for many but a company losing double of last year’s earnings is not for me.
In my humble opinion, you cannot beat the real life experience of a live real estate agent.