Market Update April 27th, 2023
John Head, VP of Sales & Marketing, REALTOR®/Broker
Coming to you again with a monthly market update to share what this report means for you as a property owner or potential buyer or investor as we push forward into the second quarter of 2023.
Looking at Real Estate Sales year-over-year from March 2022 to March 2023, sales are down 40% and while inventory is up some, our inventory here is still low. This is a little bit tricky, because our MLS goes well outside the Outer Banks. Customarily, we think of the Outer Banks as Corolla to Hatteras Village, and then on to Ocracoke (though I’m not going to include Ocracoke in these numbers).
The inventory as of April 27th, 2023 is currently 222- which is a very light inventory for us who have been participating in the Outer Banks real estate market for 20 plus years, and very light for myself as I’ve been in this business for 25 years. This is just an indicator of what is happening in a marketplace. With that low inventory, sales numbers are also going to be off. Those of you who are buyers that are seeing this today know that if you were shopping in the last two years, you may not have been successful in buying a home here because the intensity of offers was so high, it was hard to put a property under contract.
Yes, to reiterate what was shared in last month’s market update, we’re still transitioning. Buyers have a little more leverage as far as price and terms or negotiation ability, but not enough to consider it a buyer’s market because our inventory here is still so low. There’s not a lot of other options to choose from if a buyer doesn’t get their offer accepted on a home.
Low inventory maintains price points. So as you work through this report, you will see that all inventory is showing up, but it includes residential, commercial, even outside into Currituck, Camden and Columbia.
In my blog videos I try to focus my updates specific to the beach because we at Colony Realty have always participated in a second home investment property market. We consider the area basically from the sound to the ocean, from Corolla all the way to Hatteras Village.
Now begs the question, what would make it a true buyer’s market? Well, if the inventory just systematically jumps up, or if those 222 homes that used to sell within 30 days, (which is at currently about 94 days) stretches out to 6 months, that would be an indicator of a true buyer’s market. When that happens, there’s leverage on the path of the buyer, even if we don’t gain inventory, because if current inventory sits, that means they (the buyer) are in a little bit more control. When this happens, buyers will be able to make offers more easily, and negotiating price concessions (being given to the buyers’ from the seller for repairs or closing costs) will become more common.
Everybody keeps saying, “Oh, we’re going to see a 2008.” And I’ll maybe sound a little repetitive here, I just don’t see any indicators of that at present in the Outer Banks market based on this data.
Over the last two and a half years, the buyers that have been in our market have put anywhere from 20% down to a 100% down. This indicates we’ve got a lot of room for the market to depreciate some before we can expect to see any negative values. As mentioned in last month’s update, I believe we’re beading back to historical numbers, somewhere between 5% and 10% appreciation, but we’re not expecting to see 25% year-over-year. Whether homes, vacant land, condos, or commercial, they have to be priced at the market right now. There’s no, “Hey, let’s hope that we get 20% over the value”, it’s just not happening right now.
There are still so many opportunities here, you just have to be diligent in your shopping. When it comes to market reports and data, if you want to hone down a little bit more specific to the town, village or subdivision where your property is currently located, then we can do that to you as well. Just shoot us a quick note.
If you have questions about the content of any of this information, just drop a line in the “contact us” form on this page and we’ll be in touch.
Thank you and have a great day, until we see you here at the beach!
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