Outer Banks Market Update

 

A reason for optimism in the Outer Banks real estate market at last! Sales are up. Properties under contract are up. Inventory is coming down.

“The first quarter is now behind us and it was a good one,” Roy Singletary, Resort Realty Sales Manager, says. “There was an 18% increase in number of sales over the first quarter of last year.”

Values continue to be outstanding, and this may be the best time to buy. The market continues to be depressed by bank owned properties and short sales, but that inventory is being sold off. “Bank owned properties made up 22% of all sales and short sales comprised 11% of all sales,” Roy says. “Buyers are drawn to these properties because of their less than normal market values.”

Prices are still depressed, but the number of sales is so great that the overall Outer Banks sales volume has increased dramatically. “Sales volume was up 17% while the median sales price was down by 9% and the average sales price was down by 7%,” Roy explains.

There is growing evidence that the market is poised to begin its rebound. Inventories are coming down, with residential inventories in particular declining by 6%. As more people enter the market and sales increase, inventory levels will begin to resemble a normal market.

There are other signs of an emerging healthy real estate market, as well.

The value of Dare County building permits is significantly up (28.3%) through February, following a similar trend for the previous year. What is perhaps most telling, is the number of permits being issued is down, indicating larger projects–new home construction as opposed to remodels, as an example.

It is not just sales that are rebounding. Properties under contract are adding to the overall sense that the market is ready to make a recovery. Through February, contracts overall were up 25% with land under contract up a whopping 51% and residential properties up 15%. Commercial properties were also way, way up, but the number of units is so small that it’s hard to say if it’s statistically significant.

There is still a long way to go until the market returns to the peak conditions of 2006–although there is a lot of debate about whether that was even a sustainable market. Nonetheless, the market is looking healthier than it has in some time, and there is reason for optimism. “Low mortgage rates with a rise in consumer confidence and an abundance of inventory brings the rest of the buyers to the remaining market and may be an indicator of a rising market,” Roy says.