Hatteras Island Real Estate: 2010 was a pretty good year
All things considered, it appears that 2010 was a pretty good year for
the Hatteras Island real estate market. In fact, it may have marked a
turning point in the real estate cycle for residential
properties. The number of residential sales increased about
percent above 2009 levels, and the four-year decline in average selling
prices came to a halt. This is certainly good news because, at a
minimum, the data suggest that the island’s real estate market is
beginning to stabilize.
On the other hand, results for the unimproved lot market presented a
mixed picture. While the number of sales more than doubled, selling
prices continued to decline, dropping 22.6 percent below the value
reported last year.
Foreclosures and short sales were a significant factor contributing to
the increase in the number of sales as well as the subdued level of
selling prices. Distressed properties accounted for about 45 percent of
residential sales and more than 58 percent of unimproved property
The number of residential foreclosure sales remained constant in
comparison to 2009 but quadrupled for unimproved lots. Short sales
substantially increased for both lots and houses as sellers became more
aware of this alternative to foreclosure, agents became more
comfortable with the relatively complex administration of this type of
sale, and lenders became more receptive to allowing borrowers to sell
their properties for less than the full mortgage indebtedness.
Since 2008, nearly 475 homes and lots have entered the foreclosure
process on the island.
Interest rates reached a historic low point during 2010 providing an
additional incentive for prospective buyers to take action on their
plans to purchase.
There are lots of ways to look at real estate market
Usually, we compare the current year with the previous year to get some
sense of market direction. At the national level, we often
month to month comparisons. In my opinion, the market is too
volatile for monthly comparisons to have much meaning.
As I was thinking about last year’s results, it occurred to me that it
might be interesting to see where the 2010 market indicators fell on a
While there is less than a perfect correlation for where 2010 results
fall relative to past years, the data suggest that our current market
has retreated to roughly where the market was around the time that the
most recent real estate boom began – about 2001. If this ends up being
a reasonably accurate interpretation of the patterns, then it gives
some credence to those who believe that the Hatteras Island real estate
market moves in 10-year cycles, and it provides perhaps another signal
that we should be just about ready for the market to turn around.
Looking back is easy; looking forward is the challenge.
My crystal ball suggests that 2011 is going to look a lot like 2010. We
will probably continue to see a modest increase in the number of sales
with residential prices remaining restrained. Hopefully, unimproved lot
prices will start to stabilize. Until the inventory of foreclosures and
short sales works its way through the system, selling prices will face
a fairly strong ceiling, placing a limit on the potential for
It will be fascinating to watch the year unfold and to see whether the
market continues to strengthen or whether the complex interplay of
economic forces will stall any recovery.
I have to admit that I am more than a little concerned about factors in
the national and international markets that could affect us.
Persistently high unemployment, expanding deficits, and economic and
social upheaval in some foreign markets have the potential to throw our
local recovery off track. In addition, interest rates are projected to
rise to the 5.5 percent range by the end of the year.
The Hatteras Island market bucked the national real estate trends
during 2010. Let’s keep our fingers crossed that we can do it again in
2011. How do you think events will play out?
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]
Tom & Louise Hranicka. All rights reserved.