After finishing school in 1989, I immediately started my real estate career on the Outer Banks. The other Realtors who had been working in this market for a while kept saying “You should have been here last year.” Evidently, I had just missed the peak of that previous real estate cycle. New agents who enter the market today are likley to hear simliar comments. After close to three years of very busy real estate activity, the Outer Banks Real Estate Market is showing some signs of cooling off. In some market segments, homes that were priced near the last sale are not receiving the activity they would have last spring. This is occurring even though the inventory is still at historically low levels. Here’s OBX Market Report for the Fall of 2023.
For most of 2020, 2021 and most of 2022, property values were going up at a pace not seen since the boom years of the early 2000’s. In fact according to the Outer Banks MLS, the average price of a single family home for the year ending in September of 2019 was $423,456. At the end of September 2023, it had gone up to $725,731! There may be some Outer Banks market segments that are still seeing small amounts of appreciation. However, it’s clear that Outer Banks properties are no longer appreciating like the pandemic years.
Local Realtors say there are still folks looking to purchase here. You can see that when buyers believe a property is well-priced. They’ll still be multiple offers on those homes. Unfortunately, with the increase in the interest rates and the changes this year to downpayment requirements changed our market. An Outer Banks home has become unaffordable for some of them. As of this writing, interest rates for a second home are around 8%. For a second home loan to meet current conventional guidelines, the buyer also has to put down 25%. There are a few lenders who are offering an in-house loan with just 20% down, but those are becoming more and more scarce today.
So who is less likely to purchase Outer Banks property now? The buyers who are less likely to purchase are those folks who only want to put down a minimum amount of money. Also, investors who were anxious to purchase a year ago are now reluctant. That’s because they perceive that income may not cover the expenses.
Many more current buyers are buying with cash now than in the past. Typically it’s folks who fell in love with the Outer Banks years ago. They have been saving and waiting and are now finally ready for a purchase.
So what does this mean for you? If you are thinking about selling then this is still a good time to sell. It’s likely your property won’t appreciate in the short term like it did over the last few years. Also, because there is very little competition, you should still have more negotiating power. That’s especially important because most buyers don’t have to have a beach property.
If you are thinking about buying, then it’s important to be patient. It’s a good idea to wait until you find the right property; one that you’ll be happy with and enjoy for years. Once you find one of those, then move quick and be decisive. If you like it then it’s likley they’ll be others just like you who are excited about it.
The information in this report is based on the numbers pulled from the Outer Banks Association of Realtor’s MLS system in October of this year and from daily experience in this real estate market.
If you are looking for more details of the current real estate market then there are a couple easy and free places to obtain this information. You can see our reports for the following towns in these links: Corolla, Duck, Southern Shores, Kitty Hawk, Kill Devil Hills and Nags Head. Also, the Outer Banks Association of Realtors puts out a monthly report with numbers on the entire Outer Banks. You can see those reports here. Also, you see what’s for sale and what’s under contract in each Outer Banks town on our web site. There’s a map on each page showing those properties. We also have market report archives going back to 2003. Thank for taking a look at the OBX Market Report Fall 2023. We hope to see you on the beach soon!