The 2015 Outer Banks Market Report

We saw a lot of very positive signs in 2015 that continue to lead us on the path to recovery.  While we still have an oversupply of inventory on the market, keeping prices down, we have a double digit increase in number of sales.

The other interesting trend is showing more homes in the higher price ranges are selling and fewer homes offered in the under $300,000 price range.  That is showing our median sales price to be up, even though individual home prices aren’t rising at this point.

It’s virtually impossible for our home values to go up when inventory is still at a 15 month supply.  However, it’s a great step forward.  We saw a 20% increase in number of sales for 2012, then it steadied for 2 years until another big increase in sales for 2015.

Mortgage brokers are expecting a surge in activity the first part of 2016 to beat the Fed’s promise of rising interest rates.  We certainly have a year round market on the OBX and see great activity all year long.  The two spikes in activity happen in March/April and September/October.  No need to wait though, we can get your home sold any time of year.

Here is the breakdown of where we ended up for 2015:

  • Residential number of sales were up 11%
  • Average sales price was down 2%
  • Land sales numbers were down 5%
  • Average sales price was up 7%
  • Inventory was down 8%, being the lowest since 2007
  • Foreclosed home sales were down 37%

Next month I’ll provide a break down of each location individually so you can see how it compares year over year.

If you have any questions or would like additional information please let me know.

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March Outer Banks Market Update


An interesting trend is popping up for the year so far.  We have sold more homes, granted marginally, but for less volume.  So, that means either we are selling fewer high end homes or prices are still going down.

My thoughts are, a little bit of both.  

Let’s look at the stats:

  • 2014 – 16 homes sold over $750,000
  • 2015 – 10 homes sold over $750,000
  • 2014 – 58 homes sold under $200,000
  • 2015 – 49 homes sold under $200,000

This tells us two things.  Fewer high end homes are selling and fewer homes are available for sale under $200,000.  The lower end price range is a no brainer.  They will always sell regardless of the economy and market.  It’s the beach, for less than $200,000!  The bright spot is that those homes are seeing a bump in value.  As things stabilize that price range will always be the first to jump.  Great sign of improvement there.

However, high end home sales do indicate trends.  To be fair, there was a $5,000,000 home sale in January of 2014 which is clearly skewing the numbers.  Even so, there were 6 fewer high end homes that sold so far this year.  And, there are more of them for sale than in 2014.  So, that indicates a slow down in that market.  I’m not quite sure of the cause, would love to hear your thoughts on this.

That covers the first challenge.  The second challenge is that home prices above $300,000 are still dropping, even if just slightly.  Consider these stats:

From Nags Head to Corolla:

  • In the last 30 days – 205 homes had a price reduction
  • In the last 30 days – 249 new homes came on the market
  • In the last 30 days – 127 homes sold

Those are some sobering stats.  My goal is never to be Debbie Downer, yet always look at true reality.  Most homes are STILL having to adjust their price at least once in order to sell and there are still two times the number of homes coming on the market each month as are selling.  It doesn’t take an economics major to tell you that is still a recipe for lower prices.

Same moral of the story as every month…if you want to sell, there is no financial gain to waiting it out short term.  If you want to buy in the under $300,000 range, you’re going to face some competition among other buyers looking for the best deals.  Let me know how I can help!

February Market Report

Good Morning!

While the outside temperature may be at freezing right now for the Outer Banks, our market is smoking hot!  Well at least when it comes to activity.

Chew on this – From Nags Head to Corolla, there were 98 homes that went under contract in January.  Of those, 34 have been on the market for 60 days or less and 24 were on the market for 30 days or less.

That means 24 homes that JUST came on the market in December or January and are already under contract.  Another great note, 6 of those 98 are deals I put together!  I’ve been very busy so far this year and am working hard to keep it going.

Even though the data reports that closed transactions for January shows a 13% drop from January of 2014, that is really an indication of activity from November and December.  It will be very interesting to see the difference in closed transactions for this February over last year.

So that covers activity…I know, you’re thinking about value and price now.  Take a look at the chart below.  While activity has had its ups and downs, price has really flat lined.  That’s actually expected after a market crash as devastating as we had.

Year

Units Sold Percentage Change Median Price Percent Change Active Listings Median DOM Months Supply

2011

1,333

$284,500

2012

1,596 20% $285,000 0% 1726 226

12.98

2013

1,574 -1% $273,500 -4% 1714 222

13.07

2014 1,604

2%

$280,000 2% 1733

213

12.97

Let me know how I can help.

If you’re considering buying and found a house you love, take action before it sells!
If you’re thinking about selling, there’s NO reason to wait.  Buyers are ready! Also keep in mind that we are a resort market.  Most buyers and sellers don’t HAVE to buy or sell.  It’s a discretionary purchase, so it’s normal for our market to take longer to recover.

Hard Truths about Selling a Home on the Outer Banks

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.

  1. 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?
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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?
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.

Outer Banks December Market Report      

While we do have a slowdown in activity over the winter months, the real estate market is not a total loss for December – February.  There are still buyers looking and sellers wanting to move on, so don’t discount us just because you can’t jump in the ocean during your visit right now.

This year we saw a few things happen that are noteworthy:

  • Inventory went up moderately over last year (about 10%)
  • Number of sales stayed roughly the same (up only 1%)
  • Prices remained steady going neither up nor down for most areas
  • Yet, price reductions are sgingerbread housetill required for most homes to sell
  • Once priced to attract an offer, homes are selling at about 93% to 95% of asking price
  • Average days on market is still topping 240 days (for those that sold)
  • Distressed properties are still lingering
  • The OBX market as a whole is at a 17 month supply of homes for sale
  • Condition and price are recognized as the most important factors for buyers

If you’ve thought about selling your home, don’t wait until the spring.  Here are 5 reasons to go ahead and list now!

  • People who look for a home during the holidays are more serious
  • There are fewer transactions so the deal can close faster
  • Buyers have more time to look during the holidays
  • There will be a 30% increase in listings in the Spring which could impact your price then versus now.

We’ve had an exciting year in sales for 2014.  With interest rates going NO WHERE for the time being, it seems likely we can have another strong year of sales for 2015.

If you have thought about either buying or selling in the new year, contact me so we can come up with a strategy for you.

Where does our business comes from?

In a recent survey of all agents at Beach Realty on all closed transactions for the year (a list of 101 deals), it was quite shocking to find out where we meet our buyers and sellers.  We think of ourselves as being a primarily internet based marketplace since the majority of our buyers and sellers (over 60%) don’t live here.  While it’s clear that 100% of our clients USE the internet during their search/purchase, they don’t necessarily find their agent or home that way. Beach Realty’s advertising budget is of course a lot bigger than any of its personal agents’ budgets, as you can imagine.  Last checked it was $35,000 to $40,000 per year.  Yet, look what that money has produced in return????  Not a single deal from Homes and Land, Trulia or Zillow.  Only 3 transactions total from web originated leads – where the majority of our advertising budget goes. I personally spend about $5,500 per year on various advertising sources, mainly for the write off.  I can tell you I’ve not closed a deal all year from a web generated lead.  I’ve talked to a few…even shown houses to a few.  No deals yet for 2014. The moral of this story is that word of mouth/database/referrals is the primary way to generate business for real estate agents.  People really prefer to work with someone they know or are referred to.  I think we can all relate to that. So, as far as advertising goes, it’s important to let the world know your home is for sale, but it’s highly unlikely the buyer of your home is going to call the listing agent from an ad and buy it.  It’s 99% more likely they will find an agent and that agent will introduce your home to their buyer based on the interview of wants, needs and desires. However, I will still continue to advertise for the potential leads as well as tax write offs!

Lead Type # % of total
Sphere of Influence 21 20.79%
Past Client 20 19.80%
Referral 17 16.83%
Kitty Hawk Rental Homeowner 12 11.88%
Signs 8 7.92%
Up call 5 4.95%
Buyer Seminar 4 3.96%
Prospecting 4 3.96%
Agent website 2 1.98%
FSBO 2 1.98%
Other 2 1.98%
Website 2 1.98%
Expired 1 0.99%
Realtor.com 1 0.99%
101

The 2014 Outer Banks Fall Market Forecast

 There are 5 separate aspects to this market analysis/forecast.

  1. Land Sales Data
  2. Home Sales Data
  3. Rental Report
  4. Home Starts Data
  5. Finance Market Data

The purpose of this report is to provide an accurate accounting of what is currently happening in our local market and based on factual statistics, what is most likely to happen for the remainder of the 2014 calendar year.  While we don’t have a crystal ball with markets, we do have trends.  Those trends can give a fair gauge of what decisions need to be made and when.  Let’s get started!

*The data below analyzes the difference between January 1, 2013 to August 1, 2013 and the same time frame for 2014. 

Part 1 – Land Sales Data

Corolla

2013                                  2014

Total Sold –                    69                                        22                         (68% drop)

Avg Days on Mkt –      273                                     266

Avg List Price –             $300,000                         $258,000          (14% drop)

Avg Sold Price –            $272,000                         $250,000          (8% drop)

Currently Available – 84  (28 month supply)

Average Price – $223,000

Duck

2013                                  2014

Total Sold –                    4                                          4

Avg Days on Mkt –      267                                     1010

Avg List Price –             $370,000                         $349,000          (6% drop)

Avg Sold Price –            $320,000                         $311,000          (3% drop)

Currently Available – 27  (47 month supply)

Average Price $296,000

Southern Shores

2013                                  2014

Total Sold –                    10                                        21                         (52% increase)

Avg Days on Mkt –      454                                     384

Avg List Price –             $185,000                         $249,000          (26% increase)

Avg Sold Price –            $171,000                         $193,000          (11% increase)

Currently Available – 31  (10 month supply)

Average Price $181,000

Southern Beaches (KH, KDH, NH)

2013                                  2014

Total Sold –                    50                                        49

Avg Days on Mkt –      266                                     304

Avg List Price –             $130,000                         $161,000          (19% increase)

Avg Sold Price –            $113,000                         $143,000          (21% increase)

Currently Available – 147  (21 month supply)

Average Price $290,000  (This includes 7 oceanfront lots for sale over $1,000,000)

Final Analysis

  • Land is a better value in Corolla
  • Southern Shores has the lowest supply of inventory relative to the number of buyers
  • Duck is the most expensive location with the most supply available
  • Unless your price is super aggressive, you can expect it to take almost a year to sell a vacant lot

Top Prediction – Land sales will continue to stay low due to the greater availability of larger homes at lower prices (higher end properties cannot be rebuilt new for the same price as an existing home at today’s lower prices).

Part 2 – Homes Sales Data

Corolla

2013                                  2014

Total Sold –                    107                                     91                         (15% drop)

Avg Days on Mkt –      261                                     254

Avg List Price –             $672,000                         $741,000          (9% increase)

Avg Sold Price –            $627,000                         $698,000          (10% increase)

List to Sale % –             93%                                   94%

Currently Available – 360  (28 month supply)

Average Price – $750,000

Breakdown of Sold by Price

Under $350,000           18 (17%)                         14 (15%)

$351,000 – $500           42 (39%)                         29 (32%)

$501,000 – $700           21 (20%)                         21 (23%)

$700,000 – $1M            13 (12%)                         14 (15%)

$1M – up                          13 (12%)                         13 (15%)

While it may look like the prices in Corolla are going up, looking at the break down of price you can see that fewer homes sold in the under $350,000 range as well as 30% of homes sold were over $700,000 in 2014.  That was only 24% in 2013.  So more of the higher end homes are selling.

Duck

2013                                  2014

Total Sold –                    60                                        59

Avg Days on Mkt –      247                                     288

Avg List Price –             $723,000                         $674,000          (7% drop)

Avg Sold Price –            $665,000                         $628,000          (6% drop)

List to Sale % –             92%                                   93%

Currently Available – 150  (19 month supply)

Average Price – $706,000

Breakdown of Sold by Price

Under $350,000           12 (20%)                         19 (32%)

$351,000 – $500           17 (28%)                         8   (14%)

$501,000 – $700           15 (25%)                         11 (19%)

$700,000 – $1M            9   (15%)                         16 (27%)

$1M – up                          7   (12%)                         5   (8%)

While it may look like the prices in Duck are going down, looking at the break down of price you can see that while more homes sold in the under $350,000 range, 3 of them in 2013 were co-ownership (avg price $30,000) and in 2014 there have been 7 co-ownership sales thus far.  This is creating a small skew in the numbers.  There was a noticeable jump in sales of the $700,000 to $1M price range.

Southern Shores

2013                                  2014

Total Sold –                    42                                        59                         (29% increase)

Avg Days on Mkt –      210                                     194

Avg List Price –             $577,000                         $555,000          (4% drop)

Avg Sold Price –            $545,000                         $520,000          (5% drop)

List to Sale % –             94%                                   94%

Currently Available – 96  (12 month supply)

Average Price – $599,000

Breakdown of Sold by Price

Under $350,000           12 (29%)                         14 (24%)

$351,000 – $500           14 (32%)                         24 (41%)

$501,000 – $700           5   (12%)                         12 (20%)

$700,000 – $1M            7   (17%)                         6   (10%)

$1M – up                          4   (10%)                         3   (5%)

The best news for Southern Shores is that activity has taken a sharp turn upward.  Notice the months of supply is a year or less and the average price is under $600,000.  This time last year, $599,000 was only 12% of the price range selling there.  Today it’s 20%.  This is a location to watch!

Southern Beaches

2013                                  2014

Total Sold –                    322                                     289                      (10% drop)

Avg Days on Mkt –      211                                     184

Avg List Price –             $322,000                         $363,000          (11% increase)

Avg Sold Price –            $302,000                         $348,000          (13% increase)

List to Sale% –              94%                                   96%

Currently Available – 538  (13 month supply)

Average Price – $451,000

Breakdown of Sold by Price

Under $350,000           241 (75%)                      208 (72%)

$351,000 – $500           51 (16%)                         31 (11%)

$501,000 – $700           16 (5%)                           26 (9%)

$700,000 – $1M            7   (2%)                            15 (5%)

$1M – up                          7   (2%)                            9    (3%)

Same story in the Southern Beaches.  Fewer homes selling under $350,000 and more expensive homes selling.

Final Analysis –

  • Good news for those higher end sellers.  While your price may still be lower than you want, we have more buyers willing to spend in that price range.
  • All areas have at least a year of inventory going up to as much as over 2 years.
  • Corolla still seems to be the market with the biggest struggles
  • You can expect to sell within 93% to 97% of your asking price, ONCE THE HOME IS PRICED CORRECTLY
  • Average days on market is on average over 200 days which indicates the home goes through multiple price reductions before selling
  • The best strategy is to price the home aggressively from the start to avoid further losses

Top prediction – inventory levels being so high will continue to stifle prices.  There is still another 3 to 5 years minimum before a rise in prices of any substance can be expected.

Part 3 – Rental Report 

The following data comes from a consensus of interviews with multiple property management firms.  I have no hard data to support this information.  It’s based on several interviews conducted.

  • More weeks are 100% sold out this year than last
  • More guests are booking “pre-reservations” for the same home next year upon their departure
  • More guests are waiting until the last minute to book reservations in order to obtain a lower rental rate
  • There is a higher percentage of weeks booked at a discounted rate than in years prior
  • More damage reports are being filed
  • More complaints and overall “difficult people” were mentioned

Top Prediction – As the population of sites like hotels.com, priceline.com, etc. grows, the trend of seeing more last minute bookings and requests for a discount will rise as well.  Be prepared with your property manager to do an advertised rate and a secondary, discount rate in advance so you don’t loose a booking while the agency is trying to track you down for a decision. 

Part 4 – Home Starts Data 

This data is for Dare County only. 

2013 January to May

68 new starts

$17,900,000 volume

$263,000 average price

2014 January to May

78 new starts

$22,800,000 volume

$292,000 average price

It seems that the spike in sales of vacant lots in 2013 is parallel to the spike in new home starts for the first part of this year.  With lot sales being down drastically in 2014 it will be interesting to see the impact on new home starts for the remainder of this year.

Top Prediction – A number of spec homes were sold in the last 6 months in Kill Devil Hills Westside.  I think we will see more specs built in the lower end price range (under $350,000) as long as builders can continue to buy land under $100,000.  With fewer homes for sale under $350,000, this could be a real winner for investors. 

Part 5 – Financial Market Data

The following report is from a local lender, Drew Wright with OnQ Financial.  He can be reached at [email protected] or 252-562.0194.  He is happy to provide info on prequalification to buy or refinancing an existing loan.

Here on the Outer Banks we defy the rest of the country that typically see sales grow through the spring and into the summer. As is typical, our market slows down in the peak tourist visiting summer season. The reason is pretty simple- it is hard to show a house full of guests who want a week of uninterrupted vacation. Most rental companies and sellers are adamant about not showing a home that is occupied by guests.

I am optimistic about what we see for our upcoming fall buying season and the biggest time for new construction. Inquiries and prequalification for both purchases and new construction are steady and higher than a year ago. So what can we expect for rates over the next three to four months taking us into 2015?

First, just one year ago before the Federal Reserve announced they would begin scaling back mortgage backed bond purchases, rates were well below 4%. Closer to 3.50% to 3.75% for 30 year fixed rates. Rates quickly rose to about 4.50% and have pretty much quietly stayed in this range, until recently as they trended lower- closer to 4.25%.

Most of the experts thought rates would continue to rise for all of 2014 and by most accounts should be higher than 4.50%.  By all accounts rates probably should be headed higher but there are many head winds to rising rates. Yes, the economy disappointed for the first few months but other factors outside of the Federal Reserve control also contributed. Other parts of the world even those with growing economies are scared to death of deflation and as a result are exporting their deflation to us, therefore keeping inflation as measured by the Federal Reserve in check.

While I do believe the world economy is not as well off as ours, I do think our growth in the second half looks to be impressive with job creation above 200,000 for the next few months.  Also, unemployment claims just last week were below 300,000 for the first time in several years.  This will lead to higher rates by the Federal Reserve in 2015. Credit markets that determine interest rates will not sit idly by waiting for the Federal Reserve to act the and as a result we could be seeing the last rally in rates before they turn upwards closer to 4.50% in the next few months and closer to 5.00% in 2015.

If you read Fortune Magazine (and the editor’s opinion) Andy Sewer thinks we are in a sweet spot of low inflation and increasing unemployment that will translate into a stronger US economy. He is a fan of the current administration, so personally I think he has an agenda, but his case of a growing economy is not totally unrealistic. Yes if you read the other popular financial magazine, Forbes, things do not looks so rosy.  I sit more in their camp and somewhere in the middle they are both right, which means a better growing economy. I do think we will hit better employment numbers and to most this means a rising Feds Fund Rate.

Rates if they do rise, and I think they will, generally rise very gradually.  We may have a week of headline news of impending higher rates but it is just to gain attention mostly. Rising rates will make Adjustable Rate options more attractive. Right now the spread between 30 year fixed and ARM rates make the fixed rates for most buyers the better choice. If you are borrowing 750k or more the long term ARM’s are a better play but again you have to be in that loan amount category for me to really suggest it is the better option.

Top Prediction – Rates will eventually go up.  This year is a pretty safe bet.  In order to offset just a 1% rise in rates a buyer has to spend MORE than 10% less just to keep the same principal and interest monthly payment.

Example:

$500,000 Loan – 4% interest – 30 years  = $2387 payment

$450,000 Loan – 5% interest – 30 years = $2,415 payment

Final Analysis

  • The fall market usually results in an 18% rise in inventory and similarly a 20% rise in buyer sales.  (versus spring, which is much higher for both)
  • Threat of interest rate hikes will likely cause some buyers to get off the fence and buy this fall
  • Multiple offers on the best priced homes will rise
  • Short sale and foreclosure home inventory will continue to drop
  • Prices will stay the same or slightly drop (less than 5%) due to inventory levels for most areas of the Outer Banks
  • Price reductions will continue to be the main tool used to get most homes sold, keeping the average days on market high
  • To beat the curve, price your home 5% to 10% below market value to entice multiple offers (driving up the price) and to sell quickly, avoiding the price reduction method of selling as well as further out of pocket costs
  • Rental income will continue to be strong and will support roughly 75% of the expenses of owning  (for most homes)

My goal is to always provide unbiased information to every prospective buyer and seller.  I want you to have the FULL PICTURE of the market today so that the best decision for you and your family can be made.  I hope you got a lot out of this report.  I know I learned a lot in putting it together.

If you have questions about buying or selling on the Outer Banks, I hope you’ll contact me to assist you in that endeavor.

The 2013 Outer Banks Real Estate market review

The most important trends we saw in the last 12 months are as follows:

  • Residential units sold were down 2% (34 units)
  • Average sales price was down by 5% ($17,743)
  • Average sales price was $348,598
  • Distress sales units sold down 21%
  • The majority of this decline happened in the last 6 months of 2013
  • Land sales were up by 14%
  • Average price for land down 23%
  • Active inventory remained high and appears to be climbing again

The conclusions we can draw from this data are that the market looks like it wants to stabilize. With sales staying active and pricing not seeing a sharp decline that points firmly in that direction. However, cause for concern is still the increasing inventory and the fact that December foreclosure numbers went back up again.

It remains a great time to buy a home on the Outer Banks as interest rates are still under 5% and are expected to stay that way well into 2014. There’s plenty to choose from if you are looking to make an investment this year.

For those thinking of selling, it’s not ideal as far as pricing is concerned. However, weigh the difference between the current market value and the cost to keep the home waiting for prices to rise and you could see it makes more sense to sell now. There will be a turn around for pricing, just not in the short term.

For 2014 here’s what we are predicting:

  • Residential units sold should remain about the same
  • Average sales price could see another dip with inventory levels being so high still. It should stay in the 5% range.
  • Average sales price should remain about the same
  • Distress sales should stay down but more data is needed to be certain
  • Land sales will continue to go up as the prices drop. The cost of building new is starting to be less than buying existing.
  • Inventory will spike at the usual times around March/April and again in Septebmer/October.

The Outer Banks is a year round market. If you have thought about selling, there is no real financial advantage to waiting to put your home on the market. The best strategy is beating the supply and demand issue. Listing now, before Spring, will get you in front of buyers looking this year with less competition for them to choose from and potentially netting you more.

Please let me know how I can help you further. For a search of the best homes available click here. To get a free market analysis on your home click here.

Real Estate on the Outer Banks for the 1st quarter of 2013

What a great start to another year for real estate on the Outer Banks!  After ending another record year in 2012 we were expecting big things for 2013.  So far there are a few interesting trends to take note of.

It’s hard to tell exactly what caused home sales for the first quarter to be down 18%, but the good news is for March, properties going under contract are up 7%.   I’m also slightly surprised by the average sale price being down 11% over the same period last year.  There is still time for that to level out.  One thing is for sure, if you are waiting 12 months before selling your home, you could end up regretting that strategy.

It’s clear this recovery isn’t going to happen quickly.  For example, consider the following scenario…If your recommended price today is say, $500,000 and the market starts to appreciate as early as 2015 at a NORMAL rate of either 2% or 5% per year, take a look at the length of time it will take to just reach $550,000.

Today’s Recommended Price:

$500,000.00

$500,000.00

2013 – 0% appreciation

$500,000.00

0%

$500,000.00

2014 – 0% appreciation

$500,000.00

0%

$500,000.00

2015 – 2% appreciation

$510,000.00

5%

$525,000.00

2016 – 2% appreciation

$520,200.00

5%

$551,250.00

2017 – 2% appreciation

$530,604.00

5%

$578,812.50

2018 – 2% appreciation

$541,216.08

5%

$607,753.13

2019 – 2% appreciation

$552,040.40

5%

$638,140.78

2020 – 2% appreciation

$563,081.21

5%

$670,047.82

2021 – 2% appreciation

$574,342.83

5%

$703,550.21

It can be a minimum of 3 to 6 years!  Consider your carrying cost during that time frame, are you really better off to wait for that price or go ahead and sell now?

So the question becomes what will it take to turn this market around?  The biggest challenge we face today isn’t distressed sales, it’s supply and demand.  Right now we have over 3000 properties for sale and 143 buyers a month (based on a 3 month average).  That means if no other home is listed for sale it would take 21 months to sell of what we have right now.  And on top of it there are 435 new listings coming into the market each MONTH!

I don’t want to paint the picture of gloom and doom, because our market is far from that.  I can absolutely guarantee that if you price your home competitively I CAN SELL IT!

In a market full of many choices for a buyer, the buyer is going to purchase the home they perceive as the best value.  There are 4 factors that determine value.

  1. Location – this has always been the case for real estate.  The better the location the higher the price.  However, recently we’ve noticed buyers don’t make the decision solely on this factor anymore.
  2. Condition – with funds being tighter, insurance costs going up buyers are less likely to buy a home with maintenance issues.
  3. Amenities – what can your home offer the buyer that the others you’re competing with can’t?  Do you have a view, new furniture, a pool, hot tub, deeded beach access?
  4. Rental income – most buyers are going to want to know how this home will support itself.  The less of 1 through 3 you have, the less income, the less value to a buyer in most cases.

The moral of the story is to be the best value you have to have MORE for LESS.  That’s how you stand out in a market with massive inventory and guarantee a sale.

For information on what your home is worth, contact me today!

January Snapshot for the Outer Banks

After coming off such a strong year in 2012, I’m sure you’re wondering how things are going so far in 2013.  Here’s a snapshot of what’s been happening on the Outer Banks for January.
  • Surprise!  No news to report on the Mid-Currituck Bridge
  • Actual Surprise – It SNOWED!  It’s all gone now, but it was fun for a day
  • The Great White Shark Mary Lee was cruising around Hatteras
  • I was named Beach Realty’s 2012 Agent of the Year
  • Sales for January have been STRONG. Over 50 properties CLOSED so far
  • Over 200 properties have already had a price adjustment in January
  • Nearly 200 new listings came on the market
  • When priced correctly multiple offers are coming in!
  • When priced correctly properties are selling within 30 days of listing
Outer Banks 2013 Housing MarketLast year I predicted the sales for 2012 would increase 15%.  The actual number was 21%!  It was even better than I thought.  This year I predict a similar trend.  With the activity in the market so far we should easily exceed the number of sales over last year again.  I also predict we will see a stabilization in pricing…no real movement up or down.
So here’s the question…how can I be of help to you this year?  What is your strategy for making the most of the 2013 market?  What are your thoughts on how this year is going to play out?  I’m interested to create this dialogue with you, so I can be sure to provide you with the most relevant information.
Stay warm and talk soon!