Itâ€™s hard not to be optimistic at the beginning of a new year, although with real estate itâ€™s a little more difficult than feeling good about your favorite sports team, as an example. The analogy with sports teams seems reasonable though. Their success tends to be somewhat cyclical–some more cyclical than others–a reasonable guess can be made about their chances for success (or failure) based on observable facts, but ultimately it is the game itself that decides how well a team does.
That comparison, however, doesnâ€™t really hold up all that well. No matter how much we care about our favorite teams, no matter if they win or lose, in the big scheme of things, it doesnâ€™t really matter.Â The value of our property, though, the largest investment many American have, that does matter.
In the glass half empty, glass half full view of things, the Outer Banks real estate market has held its own over the past few years and does not seem to have gone through as much of the radical contraction seen in many markets. Thatâ€™s the half-full scenario.Â The half-empty pessimist would point out that property values are stagnate, real estate sales for the Outer Banks are virtually unchanged from 2010 to 2011. (1.3% more transactions for 1.4% less value through November), and there is still a backlog of distressed properties.
It is the distressed properties that may be the biggest hurdle to overcome, according to Roy Singletary, Resort Realty sales manager. â€œThereâ€™s a lot of distressed properties that may be coming into the market in 2012,â€ Roy notes. â€œThese are properties that wereÂ foreclosed improperly. The banks are holding off on them waiting for a ruling from the court.â€
Those distressed properties are at the heart of why sales and property values are not going up. That backlog has created a buyerâ€™s market and Roy points out that property owners who put an appropriate price out there are getting results. â€œThere are buyers out there andÂ . . . they are looking for good deals. Sellers who are willing to look at our local market and recognize that it is not the 2004 market will sell their property.â€
There is movement in the market. . . and surprising strength. Over half of the real estate transactions in the Outer Banks market were for three to four bedroom single family homes. Priced under $400,000 (the average 2011 price is just above $301,000 so substantially below $400,000.), these are homes that are being purchased as primary residences or family vacation homes.
Builders have certainly noticed the trend and there is a bit of a resurgence in new home construction locally to answer the demand. Although the initial price of a new home may appear to be significantly more than a distressed property, many of the foreclosed homes need a lot of work to bring them to habitable standards. â€œIf someone has to invest $40,000 or $50,000 to make a house livable, itâ€™s about the same price as a new home and theyâ€™ll (buyers) go for the new home with all the guarantees that come with it,â€ Roy says.
So, not much of a New Yearâ€™s prediction for the Outer Banks real estate market. Or take your pick: glass half full, glass half empty. Itâ€™s a good market either way, but you will need to pick a good team.