Hatteras Island Real Estate:
Is the lot market poised for recovery?
By TOM HRANICKA
of the national news reports that we watch and articles that we read
about the real estate market locally focus on residential properties
rather than unimproved lots.
There can be no doubt that unimproved properties have been especially
hard hit in the recent downturn. Last year, only 30 lots were
sold on Hatteras Island by all of the real estate agents from Corolla
to Hatteras Village.
This was the lowest level of sales activity that I have seen since I
began keeping records in 1994. Furthermore, the average lot sale price
has declined 73 percent from a peak of $401,036 in 2006 to $107,377
during the first eight months of this year.
While these statistics are very sobering, my sense is that we may be
seeing early signs of the next upward cycle. Consider these facts:
The inventory of lots for sale on the island decreased 25 percent
between August, 2009 and August of this year.
The number of unimproved properties sold from January through August of
2009 vs. the same period in 2010 has increased 171 percent.
The total value of lot sales increased 128 percent during this time
On the other hand, the excess of property supply vs. buyer demand,
combined with the influence of distressed property sales, has caused
the average selling price of lots to decline by 16 percent when the
first eight months of 2009 are compared to 2010 sales results.
There is also an issue concerning the availability of financing for
unimproved lots. It is my understanding that only two or three banks
are willing to lend on undeveloped properties, and the length of these
loans is fairly short.
The theme of “more sales at lower prices” that we have seen in the
residential market is equally applicable to the market for building
sites. Prices have dropped to the point that they are becoming
increasingly attractive to prospective buyers. To give you
one example of the magnitude of these opportunities, a bank-owned lot
on the soundside in Avon that was purchased for $259,000 in 2004
recently sold for $45,000!
While buyers are recognizing the values to be found in today’s market,
and sales are increasing, my belief is that before prices can once
again head upward, inventories will have to decrease, and the number of
distressed properties available for sale will have to significantly
If you or someone you know has been thinking about purchasing an
unimproved lot on Hatteras Island, this seems like an opportune time to
explore the market and take action while prices are at or near a
cyclical low point.
The game plan that I would recommend is to identify the areas of the
island or the communities that appeal to you the most. Then, contact
one of our local real estate brokers and ask them to research the
prices of available properties. I think you will be both surprised and
pleased at the values that are available in today’s market and how
affordable it can be to own the home site of your dreams.
(Tom Hranicka is an associate broker with Outer Beaches Realty.
Questions, comments, or suggestions for future articles may be sent to
Tom Hranicka at P.O. Box 237, Avon, NC 27915, or e-mail to [email protected]
Copyrightę2010 Tom & Louise Hranicka. All rights