Real estate sales today on the Outer Banks are a mixed bag. There are some good things happening but not all signs point towards a complete recovery. Similar to an ocean tide, the real estate market is cyclical. It’s safe to say we’ve been in an ebb tide since 2006 when real estate sales dropped significantly from the boom years. But things are beginning to turn…
A favorite activity of visitors and locals of the Outer Banks is to go to Oregon Inlet. Sitting out on this little sand spit is an amazing experience. Besides watching an Osprey catch a fish or cooling off in the warm inlet water, you can actually watch the tide turn. At the peak of the outgoing cycle the water is moving out so swiftly the fastest swimmer could not keep up. As the tide gets closer to its lowest point the current slows down and eventually stops. For about 20 minutes it stays completely still. If you arrive at the inlet during that 20 minute time its hard to tell if the tide is getting ready to come in or go out. This is likely where our real estate market is today.
The number of spring sales has been as good as it has been since 2006. First quarter total sales in the Outer Banks Association of Realtors MLS system were up over 16% in the local MLS system compared to the first quarter of 2010. Low prices, extremely low interest rates and record vacation rental income have made purchasing Outer Banks homes much more affordable. The rental income of many vacation rental homes is coming very close to paying for these properties that are selling today. This has rarely happened in over ten years.
On the other hand, there are still quite a few bank owned properties that have to be sold. As of this writing, about 40% of the homes that sold this year were distressed properties. Banks and owners of short sales will continue to reduce their asking prices until their property sells. This spring’s distressed sales have negatively affected the values of all other properties here.
We are seeing both good things and bad things happening in the Outer Banks real estate market today. Right now it is hard to tell if the tide is now coming in or the tide is still going out in the current economic cycle. Hopefully soon we’ll see even more signs pointing towards a recovery in Outer Banks real estate sales.