Outer Banks Real Estate… Where are We Now?
By Jeff Scott –
If you are an owner of Outer Banks real estate, it is likely the new tax assessment value has either been delivered to your mailbox or you will be receiving it shortly. For many owners this will be the first time someone has provided you with a rough idea of what your property is worth in quite a few years. Those owners who have not been paying close attention to property values will likely be in for a surprise. Assessed tax values have gone down quite a bit since the 2005 assessment. This article will bring you up to speed on what’s going on in the Outer Banks real estate market.
Dare and Currituck beaches saw the biggest jump in the number of sales since the boom of the last decade. Some areas saw an increase in sales over 20% compared to 2011! Increased sales in and of itself do not mean prices are going up. In fact, each year since 2008 the number of sales in our local MLS has gone up. During this time period we have seen significant depreciation in values.
The economic supply and demand law probably best explains the decrease in values over the last five years. We just have had too many properties for sale to see appreciation.
The large jump in sales last year is helping our inventory problem. Over the last year the number of properties for sale in the Outer Banks MLS has gone down approximately 10%. The more sales we have the sooner our excess supply is sold and the sooner we can return to a healthy real estate market.
There are an amazing amount of cash sales today. In 2008, agents reported that just under 25% of all sales through the MLS were sold with cash. That number jumped up in 2012 to right around 36% of all sales.
Loans were a little easier to obtain in 2008 but this trend cannot be wholly attributed to the banking crisis. It is likely that many potential buyers sat on the sidelines for years while saving their money. Now that there is better real estate news they are ready to realize their dreams of Outer Banks home ownership.
Effects of Distressed Sales
Similar to the rest of the country, the Outer Banks has had its share of distressed property. Foreclosures occur today but at a slower pace than the last few years (see chart). The local Realtor Association has been tracking the number of bank owned properties in the total MLS inventory since April of 2011. It is interesting to note that the inventory of these properties has remained between 10 – 14% during this time period. Until sellers no longer have to compete with the banks for buyers it is going to be harder to see appreciation.
Thoughts from Jeff
It looks and feels like we have turned a corner to a healthier real estate market, but if you are looking for boom times we just don’t see it yet. It took seven years for property values to get where they are now. A gradual and steady recovery over the next few years is a much more likely scenario.
Each Outer Banks market segment is different. Local Realtors would be happy to provide you with the latest sales information on your area of interest. Please feel free to contact one.
Jeff Scott is President of Scott Team Realty, Inc. He is also author of Living the Dream a comprehensive guide to buying, owning and selling Outer Banks real estate. You can reach Jeff at jeff@ScottRealtyOBX.com or toll free at 866-438-8382.