Market Update May 17th, 2023
John Head, VP of Sales & Marketing, REALTOR®/Broker
The OBAR statistical report is in, and we’re going to dive in and update you on what’s going on here in the Outer Banks real estate market. The report recaps April statistics to help us understand what trends are happening. I do have some personal thoughts about some of the comments provided within the OBAR statistical report itself, and I’m going to share my opinion of it.
Overall, we’re basically unchanged as far as inventory levels at this point, from April of 2022 through April of 2023- a 0% change there. Though all sales were down considerably at 39% from this timeframe last year, which is mainly because of lack of inventory.
One comment in the report that I want to elaborate on is that “we’re trending towards 2020.” Let’s acknowledge that there were a lot of anomalies in 2020. The first, is that we had COVID front and center. Second, Dare County took it upon itself to close off access to the Outer Banks for more time than should ever happen, in my personal opinion. That shut down affected everything. Stopped everything in it’s tracks. I’ve been practicing real estate for 25 years, and lived on Hatteras a good portion of that time. I can tell you when we experienced a closure of roads, like when we lost the road in 2011 and 2012 with Hurricane Irene and Sandy, that’s what 2020 shut down felt like. The roads just closed. If you didn’t have a special permit, if you were an out-of-town property owner, you couldn’t get here on the Outer Banks. It was most bizarre thing I’ve ever experienced!
Now here we are in 2023, our inventory levels are still considerably low, but we don’t have any stopgap there. Nobody’s out putting the blockades up on our roads. So I’m cautious, about that comment included in the report, and I personally don’t think that we’re trending towards 2020. I do believe we could be, as inventory starts to increase. You’ll see on page two of this report, the residential inventory is up at 371. That includes condos, partial ownerships, and single family homes as well. I think single families is a number that’s hovering right around 254 to 264, depending on the day. Overall, still not much inventory when you think about Dare County alone is 170 miles from Hatteras, all the way up through Duck and you’ve got Corolla to add in on top of that. We do get a lot of listings as well from just inshore of us, or Lower Currituck, as they call it mainland (also outside of Dare County).
There’s one aspect of our market that I think that needs to be addressed, and I’m gonna have a link to an article** in reference to the rental and the demand for rentals. Some are doing exceptionally well, and are ahead income-wise for 2023, and some are lagging well behind and having to discount rates . So what does that mean? Depending on where that shift goes, it can impact our market trends. I’ve said it before, the entree is still hot, but the sizzle has come off the steak compared to 2021 and early 2022. The dynamics of people traveling, air, cruise ships, and the like, has changed the demand for the Outer Banks. As most of you know, we are a drive-to destination. That’s the area that I have a bit of concern moving forward into 2024.
This year, I believe we’re stable, but hearing from investors with Airbnbs, some have shared rents are as much as 30 to 50% off from 2021 and early 2022. Some oceanfront rentals are not filling in their August weeks. What does this mean for you?
If you’re a buyer, one key aspect to examine is a three to five-year income range, and then average that out with your expenses to see if the numbers truly work at the price point that you’re entertaining a purchase at.
If you’re a property owner/seller, be encouraged that we’re not in trouble at this point. There’s too little inventory, and high demand.
I had a conversation with another fellow agent, who was not in my firm yesterday, she said: “Well, it’s picked up, it’s crazy!” I said, “Yeah, it’s returning to our historical norms.”
We’re like a banana tree, the sales activity comes in bunches like bananas. That’s just the cycle of a second home investment property, tourist destination marketplace.
I hope this information is helpful, peruse it. If you have any questions, again, reach out to myself or one of our team members and we’re here to help you, even if it’s a question about real estate outside the area. We’ve been doing this a long time and we’ve helped clients across the country. We have contacts throughout the industry from California to Maine, so into South Florida. We’re here to help in any way, shape, or form that we can to keep you informed and educated about the real estate market here on the Outer Banks.
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!