By Russ Lay on September 29, 2014 – from the OuterBanksVoice.com
For 2014, so far, the word that best describes real estate sales is “steady.”
But summer is over, and unlike most markets, the Outer Banks tends to see more activity in the fall and winter since the bulk of the market is vacation rental homes.
Buyers of vacation homes tend to close deals as far into the off-season as possible so they aren’t burdened with mortgage payments when there is no rental income to offset expenses.
And with the Outer Banks Homebuilders Association’s Parade of Homes set for the long Columbus Day weekend, it seems appropriate to set the table for the selling season by reviewing what has transpired year-to-date.
Overall sales through August totaled $426.4 million, an increase of 1 percent over 2013’s YTD of $420.3 million.
However, the number of units sold over the same time period declined 3 percent, from 1,425 to 1,379.
The reason dollar amounts increased while unit sales declined is explained by a 5 percent increase in the average sales price per unit, $309,243 in 2014 versus $294,988.
For readers with a statistical bent, the median sales price also rose in 2014 over the prior year, from $225,000 to $239,000.
These numbers, while showing slight improvement do contain a little bad news.
Active listings are also up, meaning there is more inventory out there — 3,405 units listed versus 3,119 at the end of last August.
Breaking down by classes, residential units were down 5 percent, while sales volume rose 1 percent and the average sales price increased 6 percent to $369,440.
Sales of vacant lots were virtually unchanged, with 319 selling this year compared to 316 last year.
The average lot sales price stood at $113,094, up 1 percent over the prior year. Total sales for lots and land stand at $36 million.
The median sales price was $64,000.
Year-to-date commercial sales, while not even close to the pre-2007 glory days, have shown some impressive gains this year.
Units sold jumped from 18 to 23, but more impressively, dollar volume was up 61 percent over 2013 — $7.2 million versus.$4.5 million, with an average sales price of $315,647 this year, which is an increase of 26 percent over last year’s average of $250,458.
Anecdotally, while vacant commercial lots and office space remain high, retail/restaurant space has shown significant upticks in activity compared to 2013 and 2012, and commercial rental units are also showing signs of closing the gap in inventory.
One area of extensive interest to both investment and first-time homebuyers has been distressed real estate — “short sales” and foreclosures.
Those waiting on the sidelines should take note that in this area, activity is declining.
Short-sale volumes have dropped 58 percent, $19.6 million this year as opposed to $46.3 million last year. Unit sales dropped from 105 to 55.
Bank-owned properties also showed significant decline: 117 units sold compared to 198 last year, with volume dropping $12 million to $27 million this year from $39 million last year.
Those seeking value in short sales might still uncover some bargains, as the average sales price in 2014 was $356,000 compared to $441,662 in 2013.
On the other hand, bank owned properties (foreclosures) are demonstrating an uptick in average sales price–$229,530 this year, $197,796 last year.
Median sales price by area are as follows:
- Corolla, $493,500
- Duck, $505,000
- Southern Shores, $439,000
- Kitty Hawk, $280,000
- Colington, $208,500
- Kill Devil Hills, $233,250
- Nags Head, $376,875
- Hatteras Island, $261,250
- Roanoke Island, $261,250
- Currituck Mainland, $205,000
The hottest market by location this year has been Roanoke Island, where sales volume is up 12 percent with the median sales price increasing 18 percent.
Among real estate sectors, condominiums are a welcome bright spot.
Unit sales are up 37 percent (103 units vs. 75 last year), sales volume is at $23 million compared to $15.7 million last year, average sales prices up 9 percent ($228,871 vs. $209,121), while the median sales prices also increased a healthy 18 percent, $221,199 compared to $187,500 last year.
No one expects sales to return to the pre-Great Recession days any time soon, but the 2014 numbers continue to indicate the local market is stabilizing, foreclosure/short sales bargains are starting to dry up and properties in traditional year-round housing sectors such as Roanoke Island are on an upward arc.
One item of concern is the “absorption rate,” which is a projection of how many weeks it would take to clear current inventory at the current sales pace.
After working its way down to under a year in May, 2014, the increase in new listings has risen to about 70 weeks at the end of August.
By April of 2015, we will be able to assess whether the second home/vacation rental market, where the “big money” resides, will shows signs of increasing sales and sale prices.
Data for this story was obtained from the Outer Banks Association of Realtors and its Multiple Listing Service. The data, therefore, is restricted to MLS-listed properties and sales and does not include all real estate sales in the region, such as for sale by owner and private sales consummated outside of the OBAR MLS listings.