As the dust settles and the smoke clears from the holiday season, you may think this is a horrible time to have your home on the market. This is actually one of the best times of year to list your home for sale for several reasons: 1) Inventory is usually at its lowest level at the beginning and end of the year, 2) access for buyers to see your home is also easy… much easier than in the summer months; and 3) many potential buyers receive holiday bonuses from the employers or gifts from family members.
All stats to which I refer in this blog are based on single-family homes from Corolla to Ocracoke, including Colington and Roanoke Islands. Per OBAR MLS statistics dating from 01/01/10 to 11/30/16, the months of November, December, January and February tend to have the lowest levels of average inventory. In fact, since 01/01/10, the two months with the lowest levels of average inventory were January 2013 (1,146 units available) and December 2016 (1,155 units available). The difference between 2013 and 2016 is that our current pace of sales is much stronger. In all of 2013, there were 1,126 unit sales whereas we hit 1,180 units at the end of November this year. I’m predicting a year-end 2016 total of 1,269 units sold… based on past historical trends.
To better understand the difference in 2013 and 2016, we look to the absorption rate which is a theoretical calculation. It takes the current inventory and sales rate to determine the time it would take to deplete the current inventory. The average inventory for 2013 was 1,235 units and in 2016 has been 1,272 units. You may say that 2013 was a better year for sellers because the inventory was lower. However, the units sold in 2013 was 1,126 units versus [a predicted number of] 1,269 units for 2016. Using these figures, 2013 had an average absorption rate of 12.8 months [12*(1235/1126)] and 2016 looks to have an absorption rate of 12.0 months [12*(1272/1269)].
Simple supply-and-demand economics suggest that lower absorption rates put upward pressure on prices. At the very least you should continue to see days-on-market times getting shorter and seller discounts falling. You can see in the chart above that absorption rates rose in 2013 and 2014 before resuming the downward trend in 2015 and 2016. The average time on the market in 2013 was 233 days versus 212 days for 2016. The average discount off of asking price in 2013 was 5.59% versus 4.43% in 2016. Based on the average priced Outer Banks home, that is roughly $4,000 more dollars in the sellers’ pockets… and, 3 weeks quicker than back then!! On top of that the average price per square foot in 2013 was $185, whereas it is now averaging around $194. If you owned a 2,000 square foot home… that would be an $18,000 appreciation!!
You can see that the market has improved for sellers and that instills confidence in buyers, which will continue to fuel the market improvements. We’re in the season of hope, right?
With an improving market, ease of access and the holiday season of gifts and bonuses upon us, you may want to seriously considering getting your property out there on the open market. If you don’t own an Outer Banks home yet, now would be a great time to get in and reap the benefits of owning a piece of paradise, while the getting is good!
For a complimentary professional consultation for buying and/or selling Outer Banks real estate, feel free to call or email me anytime. I look forward to hearing from you soon.