July OBX Market Stats
August 2, 2024 By Ilona
While there isn’t much change to report this month, I predict by October/November there will be more inventory and the beginning of a quantifiable shift in pricing. You know I’ll keep you posted! To see the full effect of the logarithmic path, I’m comparing January 2024 to July 2024.
| Jan 2024 | Jul 2024 | |
| Months of Inventory | 4.8 | 5.9 |
| Active Homes | 492 | 700 |
| % Under Contract | 24% | 21% |
| Price Changes/Month | 171 | 232 |
May OBX Market Update
May 15, 2024 By Ilona
In a nutshell, the market here is changing…slowly…but surely. These types of cycle shifts don’t happen all at once. Fortunately, because I study the market every day, I can help you see it coming. After all, you can get out of the way of what you don’t see!
Here are the basics we are watching:
Inventory
Total Everything – up 27% since January (currently over 1,000 listings)
Homes, Single Family and Condos/Townhomes – up 24%
Activity
Absorption Rate has gone from 4.8 months to 5.5 months since January
This means it would take longer to sell the homes we currently have on the market. Once this goes over 6 months, we enter a Slow Market
Price
53.5% of homes are still selling within 0-30 days, of those…
97% of asking price is what they are selling for
67% of homes are now selling under asking price
Basic supply and demand economics tell us that when supply is inching up, demand is inching down that prices will start to waiver. How long will this current market last? We just have to keep watching. We are noticing more price reductions coming in and fewer multiple offers. This is an active situation. Stay tuned for next month’s report!
If you have thought about buying or selling, let me know so we can plan your strategy.
For Last 90 days of 2023
October 2, 2023 By Ilona
What to expect? Well, short of some financial event or credit crisis, probably more of the same. The big challenge with resort markets, aka discretionary markets, is the lag time. It generally takes about 18 months for economic factors in the real world to make their way to us.
Because we don’t have a large section of properties that “have to sell” to keep our market moving, as soon as buyers slow down, inventory piles up. At least that’s how it normally is. Truthfully, we are not that far from inventory pushing that market shift from “normal” to “soft.”
That being said, right now here are the main highlights of our current market for Single Family Homes.
Corolla, Duck, Southern Shores |
KDH, Kitty Hawk, Nags Head |
| Active – 110 | Active – 110 |
| Under Contract – 52 | Under Contract – 44 |
| Sold – 274 (30 buyers/month) | Sold – 289 (32 buyers/month) |
| Absorption Rate – 3.6 months | Absorption Rate – 3.4 months |
I double-checkedhose numbers, and it is such a coincidence to have the same active for both north and south markets! They are shockingly similar in all categories.
With 30 buyers a month, 180 active would make it a 6-month absorption rate. That’s only 70 more listings to push us into a soft/declining market. I don’t think it’s unrealistic to suggest we could be there by spring.
Real estate is long term investment. You can time it right, or you can hold and enjoy. If you have questions on what is the best strategy for you, call for an appointment.
July Market Update
July 3, 2023 By Ilona
Mid-year is upon us and not much has changed since the last report. I did notice an interesting trend regarding CASH in our marketplace. Here’s the deal. There have been 136 home sales in Duck and Corolla since January.
Of those 136 home sales:
- 32 Cash
- 13 Jumbo Loans
- 91 Conventional Loans
A conventional loan amount is $726,200. With the typical 20% down, that means a purchase price of around $875,000.
- Only 53 of the 136 homes sold were under $900,000
- 83 homes sold over $900,000 up to $6,300,000
- 13 were jumbo loans
- 22 were cash
- The average price is $1,251,000
- The median sales price is $992,500
A jumbo loan amount is anything over the $726,200. There were only 13 of those reported. There were 48 Conventional loans in the $900,000 and up price range. This means that 48 buyers out of 83 brought enough cash to the table to get their mortgage at or under $726,200.
To paint a clear picture – 32 cash buyers, 48 mostly cash buyers. That’s 80 buyers (60%) who brought a ton of cash to the closing table to buy a home on the Outer Banks. Including the highest sale of the year so far – $6,300,000 ALL CASH!!!! This just seems amazing to me. (Here’s a link Click Here to View Listings to that home if you want to see what $6.3M gets you)
This is a clear indication that buyers have no problem parking cash in a beach home right now. I mean, why not? Let’s look at the 3 main reasons this could be a good idea.
- Rental income – If you choose to rent, the income will at the very least cover your mortgage. That means, future equity you reap, all paid by SOMEONE ELSE.
- Bank Failures – With banks failing across the country, and the Dodd-Frank Bill legalizing, if not mandating, “bail-ins” a lot of people don’t feel safe keeping their cash susceptible. Rather, they are investing in a tangible asset, and one they can enjoy themselves and have others pay for!
- Inflationary Fiat Dollar – Let’s get real, the price of real estate will NEVER go to zero. As inflation spikes even more and more out of control, the dollar is tumbling closer and closer to zero. It seems buyers are hedging their bets on the tangible asset of real estate versus the tumbling value of the dollar.
We haven’t even begun to see the effects of the commercial real estate crisis looming. This is widely affecting regional banks who are holding the notes on these buildings that are sitting empty in record numbers across major cities.
Don’t get me wrong, my message is not of doom and gloom. What’s going to happen is going to happen. My point is, what is your best move?
If you are considering selling, there are cash buyers waiting for your home. We do have investment vehicles where you can put your money and AVOID capital gains tax in the meantime. Contact me for more information.
If you are thinking about buying, get off the fence and don’t let the interest rates deter you. You won’t have much competition buying right now and there are some great opportunities out there!
Outer Banks Market Update – March 2023
March 1, 2023 By Ilona
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
January 5, 2023 By Ilona
Hello and Happy New Year!
What an interesting few years in the real estate world, and the world in general! I got to spend a good bit of time with my niece and nephew over the last 18 months and do a little bit of traveling. After 26 years in the business, I was so grateful and fortunate to have the opportunity to still assist some new and past clients while enjoying that precious time with family!Market Update – I’m excited for what’s to come in 2023, and I’m sure you’re curious about what the market climate is right now. Here’s a link to my 2023 Real Estate Market Predictions. Hint, under contract and sold properties are already down 50% from this time last year. What do you think will happen next?
Suggestions – As I gear up to write these informative messages to you, I’d like to know if there’s any specific topic you want to know more about. Message me with your ideas!
Construction Projects – If you are interested in doing any work to your home this spring, I have a carpenter who actually has the next few weeks open. His skill level is vast and can handle most small to moderate-sized jobs. Flooring, decking, windows, some siding jobs, bathrooms, drywall, etc. Contact me for more information.
2023 Goals – It is my goal to help 33 families buy or sell on the Outer Banks this year. If you or anyone you know is interested, I would love to help!
March 2022 Market Update
March 3, 2022 By Ilona
Let’s talk about INVENTORY. Most people don’t realize that inventory level is the key determining factor for real estate prices. If I had a dollar for every time someone asked about the bridge in relationship to values, I would have a whole lot of dollars! And yes, there are a lot of factors that play into value.
For example:
- Condition – buyers today don’t want to fix old problems
- Location – location has always been top of the list
- Rentability – Not every buyer in our market cares about this, but it does help
- Financing – Being able to get good terms
- Insurance – Getting the best premiums makes the home more saleable
However, inventory levels trump all other factors when determining value. Just 3 short years ago the inventory levels in Corolla were over 2 years. Now, it’s barely one month. The old faithful supply and demand is king when it comes to prices going up or down.
Let’s also realize these cycles historically (nearly 100 years worth of data) last for 20 years. The last cycle began in 2000. So regardless of COVID, we were due for an up market. I do believe that COVID accelerated what should have taken 3 years to get where we are into 2 years. That being said, the last up cycle lasted for 5 or 6 years. It’s not clear how long this one will last. Especially with everything going on, who knows.
What we do know is that watching the stats is the same as having a crystal ball. Nothing can change until inventory levels change. That doesn’t look to move any time soon. We are just beginning the spring market where our inventory usually increases by 30%.
Here’s the number of homes currently for sale and under contract for each area.
Area For Sale Under Contract
Corolla – 22 86
4 Wheel – 8 8
Duck – 13 23
Southern Sh 10 16
Kitty Hawk 9 8
KDH 12 53
Nags Head 12 26
These numbers still blow my mind! We all want to know what’s going to happen. Here’s what we can count on, what goes up, must come down. The big question is WHEN? My answer, watch the inventory and you’ll know. When we get back to 4 to 6 months, that’s when it will start.
Meanwhile, if you have any questions about buying or selling in this crazy market, give me a call!
New Price!! Spend your Lazy Summer Days on Your Sun Deck in Corolla!
July 7, 2015 By Ilona
