As 2022 began, it appeared to be following a similar trajectory to 2021. The MLS report from the Outer Banks Association of Realtors revealed record-breaking sales in December 2021, along with the lowest inventory levels ever recorded. Meanwhile, in January 2022, the average 30-year fixed mortgage rate was 3.22%, a slight increase from the 2.96% average seen in 2021. Despite these factors, buyers remained enthusiastic about the prospect of homeownership due to the low rates and limited inventory.
2018 in Review and A Look Ahead
Total Sales for December were flat (less than a 1% change from December 2017) and are down 6% for the year compared to last year. The number of properties that are in an Under Contract status are 9% lower than compared to 2017. Inventory; there are 2,197 total listings on the market in the entire MLS compared to 2,091 in 2017. The 2018 Median sale price of $343,000 has been on the rise since 2012 and remains about the same as 2017. Land prices are up 3% over last year.
Distressed inventory continues to drop. This includes both short sales and foreclosures. There are just 23 properties listed for sale that are either bank owned or short sale. These make up a very small percentage of inventory and sales as compared to 2013 when they were at record highs.
Real Estate Agents are Critical for Successful Transactions
Experience & Expertise
Yes, it’s true we all can’t be experts on everything. Hiring someone who knows more than yourself about any given subject is a crucial decision. Understanding the housing market and the neighborhoods is only part of what an agent can bring to the table. Here are just a few things that all agents must be knowledgeable about: price guidance, market conditions, financing guidelines, contracts, disclosures, legal requirements, HOA covenants, permits, contract negotiations and confidentiality. We are ethically bound to provide proper and equal guidance to every client.
Sellers will get represented on all fronts of the internet. Having your property listed with an agent assures that your home gets maximum exposure. Our MLS feeds all internet sites such as Zillow, Trulia and Realtor.com. It is your agent who checks to make sure that your property is properly represented. The right photos and proper verbiage can make or break a home sale. Agents also market and speak with other agents behind the scenes. Many deals are struck by a Realtor telling other agents about how special your home really is. Open houses and broker open houses can create a visual effect that far surpasses the internet.
This is the exact reason why many sellers and buyers don’t want to use an agent. Selling or buying a home is can be emotionally draining. Often, buyers and sellers want it both ways. Sellers want to tell us about how great their home is and how much it is worth. Buyers want to low-ball well priced homes. Everyone wants a deal. Our job is to educate buyers and sellers to find common ground. I find that most people just want to be treated fairly. It is our job to ensure that this happens.
Few can circumnavigate the world of negotiating over large sums of money or property. Realtors face this challenge on a daily basis. Separating the emotions from buyer’s and seller’s overall goals is challenging at times. We are the liaison that helps keep the peace and keep everyone on the same page. We are the voice of reason and frequently give emotional stability to our clients. We operate ethically and always represent the greater good of our clients.
Real Estate agents wear many hats. We are sometimes the coach and sometimes the friend. The numbers do not lie about our worth for both buyers and sellers. Still, some choose to go it alone and represent themselves. I tip my hat to those that are successful at this process. It’s the full-time agents that are in the trenches on a daily basis that succeed in helping the most people. Realtors are experts in what we do for buyers and sellers.
I am proud of my honest approach to selling real estate in a competitive market. I believe in representing my clients to the fullest extent. I am available 7am to 7pm 7 days a week. Call me if you would like to chat about the buying and selling process.
Outer Banks Market Trends
It’s important to remember that this is based on statistical information and there are a number of variables that may affect the numbers.
As an example, one of the numbers we look at for our tourism picture are Occupancy Tax Collections as reported by the Outer Banks Visitors Bureau.
The numbers they report do not include increases in rental rates or any increase in the number of properties or rooms available for visitors. With that caveat in hand, we would also point out that by any standard, Occupancy Tax Collections have far outstripped the rate of inflation over the past 15 years.
Occupancy and Meal Tax Collections
These statistics come from the Outer Banks Visitors Bureau and are for Dare County only. Currituck County also collects Occupancy and Meal Taxes but their reports have a considerable lag time.
As noted earlier, all indications are that the Outer Banks tourism industry is healthy and growing.
Although Hatteras Island lost two weeks of revenue because the company constructing the replacement bridge across Oregon Inlet severed the power line to Hatteras Island, Dare County collections still grew at an annual rate of 5.8%. The only glitch was a 4.5% decline in August—undoubtedly a reflection of the situation on Hatteras Island.
Overall, the northern beaches outperformed Hatteras Island, although the power situation certainly affected that.
What does this mean?
Generally speaking rentals increase at about the same rate as inflation. There are a number of mitigating factors in that, but as a basis for understanding what’s happening, that is a good place to start.
With that in mind, the increase in collections occur in two areas: stronger shoulder seasons and more properties or rooms available for rental.
Both would seem to be the case.
We know April and May in the spring and September and October in the fall have become increasingly important to the Outer Banks economy and the numbers bear that out. From 2016 to 2017 shoulder season occupancy increased by 13.5%.
Visitation is harder to quantify because there is no one method to count visitors that everyone agrees is accurate. There is, however, some evidence that an increase in visitors is also occurring. Jockey’s Ridge State Park in Nags Head reported more than 1.5 million visitors last year, an increase of 18.8% over 2016, making it the most visited state park in North Carolina.
Real Estate Sales and Construction
We’re going to start this section with a reminder that nothing substitutes for working with someone with knowledge of the local market. There is a lot of nuance in any market and that’s where the experts at Outer Banks Blue become so important.
The Outer Banks real estate and housing market is healthy. The exception seems to be commercial properties that do not seem to be keeping pace with residential sales, but other than that, there does not appear to be much of a downside in the market.
A quick snapshot of the health of the real estate sales is Land Transfer Tax collections. Since every real estate transaction in Dare County carries a transfer tax, trends in the market can be tracked.
A transfer tax is a percentage of a sale and has nothing to do with the number of sales that are happening; nonetheless, if over time, there is a steady increase in collections, it’s a very good indicator that the market is expanding.
For the past five years at least, Dare County Land Transfer Tax collections have been increasing. Although we are at the mid point of fiscal year 2017-2018, it looks as though 2018 will continue that trend. Through February collections were up 6.6%
One of the trends that does seem to be emerging is a shift from a buyer’s market to a seller’s market. It’s never all one way or another, but there are some indicators that point to the change.
In 2011 the average number of days on the market after a property was listed was 238; through February of this year, the average number of has been 152.
The number of units sold is also an indicator. In 2011 1075 units were sold; in 2017, which gives us a full year for comparison there were 1544 units sold, a 43.6% increase.
The increase in the number of units sold and coupled with a decrease in days on the market is consistent with investors looking to take advantage of a growing visitation market. Not everyone is purchasing a property for rental, but an increase in Occupancy Tax collections coupled with indications of an increase in the number of visitors coming to the Outer Banks seems to point to more investors looking to Outer Banks property management opportunities.
There is a significant amount of new home construction on the Outer Banks, and early indications are that it will continue.
For the year 2017 there was a small decrease in the number of building permits issued. That trend seems to have reversed itself through February.
Building permits are very much in the raw data category. Permits are sometimes issued but construction never takes place. The number of permits also does not say what the permits are issued for. Nonetheless, there is some interesting information that can be taken from the initial reports.
The number of permits issued through February is up a modest 2.6%, but what is significant is the average permit value has increased by 11.5%. That is a clear signal that that larger, more complex projects are being planned, and a part of that would be new home construction.
That means the Outer Banks tourism market will continue to expand. It also means that, for existing rental property owners, a competitive market is going to stay competitive and may become even a bit more competitive.
Which brings us to another important point to consider. Summer is coming; properties should look as good as possible with any improvements done as soon as they can be made. However, looking at the trends in construction, it is apparent that contractors and builders are very busy right now. There is going to be lead time in getting any work done. Schedule the work as soon as possible.
The Financial Sector and Real Estate
Our current market along the Outer Banks has been on the upswing with an improving market for the last few years. 2017 was the best year locally along the Outer Banks since 2005 with over 766,000,000 in sales and a total of 2,560 units sold! That is a good and financially sound real estate market. Contributing factors have been competition among lenders with Low Interest Rates, Record Low Inventory, Improved Economy and the rise of home values. With the recent Volatility of the Stock Markets I have been getting more calls from several Investors wanting to diversify their investments out of Stocks and into Real Estate.
When I was reading through a Few Financial articles recently I came across a Financial Bill being currently proposed in the Senate that will have great effects on Real Estate…..The Rollback of major parts of the Dodd Frank Act. Do you remember this name? If you were affected by real estate during the crash of 2007 or knew a little about the way our banking regulations worked you certainly should remember. The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010 and it’s intentions were in overhauling the Nations Financial Regulatory System. If you were an Investor, Broker or even just a property owner during that volatile time-period you certainly felt the effects the Financial sectors ultimately put on the Real Estate Market. No Documentation Loans, Fraudulent Secondary Mortgage Markets and a general lack of ethical banking and lending principles were mostly to blame. In turn most lost large portions of equity, went Upside down on their mortgages, Foreclosures were rampant and the economy was in peril.
Fast Forward 11 years….Real Estate has recovered and the economy has greatly improved. Large parts of corrective oversight in certain lending regulations passed by the Dodd Frank Act which in turn righted a lot of wrongs in the way lenders lend and the way Wall Street handles the Billions of Dollars it deals with in the Real Estate Financial sectors were a factor. That being said, as a local professional REALTOR here along the Outer Banks that takes great pride in my profession I find it concerning that a good portion of proposed rollbacks to Dodd-Frank are being passed through Congress as we speak. The Bill has many items and more than likely may have more items attached with riders in other proposed bills in order to gain support. Long Story Shortened- This Bill would Exempt Banks with less than 250 Billion in assets from tighter Federal Reserve oversight. This frees smaller banks and financial firms from the rules that were implemented originally and helped our real estate markets and economy recover. It does not take a financial genius to see that this could be a big issue. While I am for an improved economy through sound financial means I would think twice before Rolling back items that left our economy in shambles just over a decade ago. I encourage you to look into these proposals and let your voice be heard. Thanks for reading my Real Estate Blog. I trust it was informative and made you ponder…
Your Native Outer Banks REALTOR- Shane Collins
For more information on all things Real Estate or any questions on the Outer Banks, feel free to contact Shane Collins directly with the OBX Island Guys of Outer Banks Blue Realty Services. (252) 202-1193 or email at email@example.com.
Photographic Deception: To Deceive or Not To Deceive
The current school of thought appears to be this; when listing a home for sale, hire a photographer, temporarily stage the home for photos, and have the pro take magazine quality photographs inside and out. We can pay $200 to $500 or more depending on the photographer and if we have the use of a drone.
Flashback recently…I am working with an out of State home buyer that has missed out on a few homes because he and his family could not travel here in time to look at the home. So, we picked out 5 homes from the MLS that fit their needs and price point and they scheduled a visit a week later. Before they could get here, 2 of the homes went under contract and another home had an offer in on it. Frustrated, Mr. Buyer asks for advice; what can I do? They decided to look at the pictures of the remaining homes and make an offer, sight unseen, so that they could get their foot in the door prior to their visit. Their offer was accepted.
Fast forward to their visit. What should have been a moment of excitement as they get to look at their potential new home; turned out to be a moment of deception and disappointment. “Deception”? Well yes, but not the kind of deception that is premeditated or illegal. The buyers felt like they were duped by glam photos that misrepresented the reality of what the home and the grounds actually looked like. So, needless to say, they withdrew their offer, and to this day have not made another purchase.
I know what you may be thinking, “why didn’t I just go look at the home and let the buyer know my thoughts?” Great question, and that is exactly what I would normally do, but I was also out of town, visiting my son at college. So, like the buyers, I relied on the photos and the comparable sale info in the MLS (I do travel with my laptop) to help guide them with their offer, knowing that the due diligence clause in an NC real estate contract would allow the buyer to terminate the contract for any reason or no reason as long as they were within their time frame set forth in the due diligence clause (another topic for another blog).
How many times have I showed homes and heard the buyer say; “wow, this home looked so much better on the computer”, or “you Realtors are great photographers”. And how many times has a buyer picked out the home they thought would be their favorite, based on the pictures, and when we actually go look at the home it becomes their least favorite – and even more so because of their disappointment that the home didn’t measure up to the pictures or the description.
Which brings me to the main point. Are we doing a disservice to the general real estate public by making homes look so good that we create disappointment when the home finally has to present itself as it is to the potential buyer? It’s very much like the glam photo on the business card that looks nothing like the actual person, or the glam profile on a dating site (not that I use a dating site, but this is what I have heard, lol.) Eventually, the truth will reveal itself.
Here is what I do. Depending on the home, the market history, and the budget; I have the seller allow me to hire a Stager – not a person that comes in with loaner stuff or one that tears down walls, or one that buys $10,000 worth of stuff to make the home look better. No… A different concept. The Stager I use works within the home and uses what’s already there – by rearranging, re-configuring, re-centering, de-cluttering, removing excess furniture and other stuff that make a room look smaller. We do this room by room. The only things she adds are new fluffier comforters and pillow shams so the beds look more inviting and the room more comfortable and maybe a few pieces of artwork here and there. She will touch up paint and then clean. Anything removed can be stored away if the owner has storage rooms or closets – or it can be given away to a local charity. She orchestrates all of it.
What you are left with is the actual home – as it will appear and as it will be. Then, with my very own camera, no fancy lighting or setups, I’ll take 36 pictures of the home and upload them into the MLS where they will be syndicated through the internet real estate websites. The owner invests $1000-$2000 in the Stager and has a home that is more saleable. Three of the last four that I did this way have sold in less than 30 days. A faster sale translates to more money for the seller, no matter how you slice it. The monthly carrying costs of insurance, taxes, utilities, maintenance and mortgage (if they have a mortgage) can easily add up to $3000 to $5000 per month if not more. So, shortening the selling process can save the seller BIG money.
If the seller doesn’t have the money to invest in the stager, I give the ideas to the seller so that they can do what they can themselves, and then I take the pictures. It is what it is. I have no interest in creating a pictorial of a home that is not representative of the home. I do not want to deceive the real estate world. If we were making a submission to Country Living, Architectural Digest, or another Real Estate Magazine for a different purpose, that would be an entirely different thing. I want to help the seller present their home in the best most realistic way possible so that the buyers are not disappointed when they see the home and so that the home sells faster; ultimately making the seller more money.
Please feel free to contact me if you are looking to buy or sell Outer Banks real estate. I’d love to put my 23+ years of real estate experience to work you. Remember, “Homework” is what I do best!
All I want for Christmas is… A Beach House
The same may thought to be true in real estate sales at this time of year as many of our local attorneys on the Outer Banks close for that week between Christmas and New Year’s day (making it very difficult to get a sale closed and recorded), but hold on just a jingle bell minute. I am here to tell you….you never know!
There are still properties going under contract and selling at this time of the year. There is no reason to think that just because winter is arriving this month that sales on the Outer Banks go into a deep freeze. In fact if the property is listed at the right price you just never know when it will sell so be ready!
Just this past week I had notice of a property going under contract in Corolla and the buyer wants to close on the transaction before Christmas. That is less than 3 weeks between contract and close! This is a very unusual circumstance as most properties take 45 or more days to close, but it does happen that we get serious buyers and short closing times at this time of the year.
But the story to beat all is several years ago I was in real estate sales and had the experience of a real estate lifetime.
I was in the office on Christmas Eve morning wrapping up some loose ends before heading out to visit family that evening. I had some shopping to do and was organizing myself to head to the mall and do just that. As you can imagine from the 1st paragraph in this article that indeed things were pretty slow around the office. I was there, one of our receptionists was there, and someone in the accounting department was working for a half day that day as the company owner was closing the office at noon on Christmas Eve. Well imagine my surprise when I was called to the lobby to meet a prospective buyer who walked in and wanted to see a real estate agent to show some real estate. On Christmas Eve!
That surprise turned to stunned silence when I met the man, exchanged pleasantries and he promptly announced he wanted to buy his wife a beach house for Christmas.
Three hours later we had an offer to purchase written, and by 6 PM that night I had a copy of a full price cash contract to sell a house to this gentleman which he photocopied and presumably put under his Christmas tree for the Christmas present of a lifetime for his wife (no she did not see the house before he contracted to buy it). Talk about a Christmas miracle! It was truly an unbelievable situation. To top it off the transaction closed without incident 2 weeks later.
Of course that doesn’t happen often (in fact I’ve never heard of it happening before or since), but it just goes to show you that as a seller you never know the motivation or timing of a buyer. As the great showman and World Wrestling Federation champion “The Nature Boy” Ric Flair said once “You don’t have to get ready – when you stay ready.”
Real Estate Selling Tips for Your Home on the Outer Banks
The First Impression is the Last Impression
Sounds old, but still it’s the most practical thing, especially when you are selling your home. Just imagine you want to buy a vacation home, you drive by the house before setting an appointment and it doesn’t look good form the outside. You would just drive to the next home.
What to do?
Getting your Home Exterior into Shape
People often only worry about the interior of the home, but often the exterior could use a face-lift. A fresh new color outside or just pressure washing will make a noticeable difference. A fun bright color applied to the front door will add a pop of color to your home to make it stand out and increase the curb appeal. Front door hardware is another area which may be in need of an update and is often overlooked. To add a personal touch while also increasing curb appeal, update your house numbers. To make a home really stand out and look finished, consider adding shutters to the windows. By adding shutters, you can turn a drab and boring house into a polished home. While black or white will always work, choosing a brighter and fun color will make the home pop and stand out amongst all the plain houses around. Any or all of those ideas are worth considering this spring to give the exterior of your home a revamp.
Number one on the to-do list for the spring is often landscaping. Having maintained and visually appealing yard shows that you take pride in your home and it is well cared for. Maintained yards also make homes look clean and tidy. Saving your money and your time can be done by investing in low maintenance vegetation. There are many options for hardy plants that require minimal upkeep. Edging walkways with flowers, rocks, or shrubs are very visually appealing. Lighting around the walkways link and extend of living to the outside space.
Linking the indoor living area to the outdoor living area adds additional functional living space to a home. Maximize your outdoor living space will create a wonderful place to enjoy and entertain. Adding a fireplace outside complete with comfortable furnishings is an area that can be enjoyed year-round. There are many options available for outdoor cushions and pillows that are mostly waterproof and can be easily cleaned. You can tie in the colors of the cushions and pillows with outdoor planters with coordinating flowers. A huge trend that is also functional is the outdoor kitchen and dining area. Imagine grilling out in your grilling area with food you prepared on your stone countertop in your outdoor kitchen. Many outdoor kitchens have their own refrigerators, storage, sinks, and even pizza ovens. Patios with dining areas are great for entertaining and really enjoying the wonderful weather of the Outer Banks.
Outside living is something that can be enjoyed year-round, so it is important to consider changing it up so you will not only extend your living area but create a visually appealing home that exemplifies pride and gratification. No matter how long the winter may seem, spring is sure to follow, so make this spring the one for revamping, redecorating, and renewing the exterior of your home.
Outer Banks Real Estate Sales Update
To answer these questions we put together an Inventory Matching Market Analysis for the market my team works from which includes Corolla through South Nags Head, Colington Island and Colington Harbour and Lower Currituck County:
|Single Family, Condos & Townhomes|
|Inventory Matching 12-2-15 through 12-2-16|
|$100,000 – $149,999||46||3.8333||3.9519%|
|$200,000 – $249,999||159||13.2500||13.6598%|
|$250,000 – $299,999||199||16.5833||17.0962%|
|$1,300,000 – $1,399,999||7||0.58||0.6014%|
|$1,400,000 – $1,499,999||3||0.25||0.2577%|
|$1,500,000 – $1,599,999||3||0.25||0.2577%|
|$1,600,000 – $1,699,999||4||0.33||0.3436%|
|$1,700,000 – $1,799,999||4||0.33||0.3436%|
|$1,800,000 – $1,899,999||1||0.08||0.0859%|
|$1,900,000 – $1,999,999||3||0.25||0.2577%|
|$2,000,000 – +||9||0.75||0.7732%|
Current Inventory 12/20/2012 = 957 Homes for sale (a 10 month absorption rate).
Average Sales price = $410,000.
67% of sales were between $200,000 and $500,000.
Southern Shores North = 421 Homes Sold (36%) (Average Sales price = $559,000).
Corolla Sales = 238 Homes Sold (20%).
We had 1164 sales the past year, with +/- 1 – 5% of the previous two years. 957 homes currently for sale. A 10 month absorption rate or 10 month supply.
BUYERS VERSUS SELLERS MARKET: The National Association of REALTORS chief economist suggest that when there is a six month supply of active listings (unsold inventory) the market is neutral or balanced with any equal number of buyers and sellers. My experience indicates that a five to eight month supply is the range for a generally balanced market; that a seller’s market is when there is a three month or less supply; and that a buyer’s market exists when there is a twelve month or great supply. Prices generally react faster in a seller’s market than in a buyer’s market since the individual home owner will raise their price quickly but will resist lowering their price. This is a basic function of the human trait of “greed”.
Our average sales price is $410,000 and our market “sweet spot,” the price range where 65% to 75% of the sales occur, is between $200,000 to $500,000. 67% of all sales fall in this price range.
Our most productive range is between $250,000 and $299,999 where 17% (1 in 6) of all homes are selling. This market overlaps year round/2nd home purchases.
For Southern Shores, Duck and Corolla the average sales price is $559,000. 20% of all sales are in Corolla.
I hope this information is helpful! Maybe a little more information than the answer. But as my old friend Ed Rabbel would say, “it’s picking up.” He was a garbage man!
For more detailed information on the current state of the Outer Banks real estate market, please feel free to call Danny or Danielle Fenyak at (252) 256-1818 or email him at firstname.lastname@example.org.