Hatteras Island Real Estate: Frequently asked questions are
During the summer when the island is most active, I like to publish an
updated version of an article that addresses some of the most
frequently asked questions that I hear from prospective buyers and
sellers. Many of the issues remain unchanged, but occasionally a new
question will make its way into the list. As an example, for
past two years, inquiries about foreclosures and short sales have
become more noticeable.
According to National Park Service reports, each year several million
people visit the Cape Hatteras National Seashore. Quite a few choose to
spend some of their well-deserved vacation time talking with our local
Realtors about property in Hatteras Island’s seven villages. While each
person’s specific needs and interests are different, a number of
surprisingly similar questions arise during these conversations. Some
of the most commonly asked questions and their answers are presented
Q. We are
just starting to
consider buying property. Do you have any recommendations for a game
A. Hatteras Island is a very special place, and each of its villages
has its own novel charm. My advice is to visit each of the villages,
drive around, and let your feelings be your guide. Usually, one or two
areas will appeal to you more than the others. Once you find the
location that feels right for you, then start to clarify price ranges
that meet your criteria and zero-in on the “perfect” property.
Q. What does
cost on Hatteras Island?
A. There are properties to meet just about every need and every budget.
Be aware that prices may vary among the villages.
income is taken into account, the cost of owning a cottage on Hatteras
Island can be surprisingly affordable.
priced from $299,000 to $1.7 million. Lower priced homes usually have
for oceanfront lots begin around $398,000 and peak at $995,000
soundside lots start around $29,900, and cottages range from $114,900
to $1 million.
$267,500 to $1.5 million.
available for $135,000 to $895,000.
reflect asking prices from $179,000 to $695,000
location and size, condominiums range in price from $42,500 to $579,000.
How has the
Hatteras Island real estate market performed over the past few years?
A. Over the long term, the real estate market on Hatteras
has rewarded property owners with attractive returns on their
investments. As the real estate market has weakened, the average
selling prices of houses and unimproved lots have declined, although a
small price increase in residential properties was seen last year.
ISLAND AVERAGE SELLING PRICES
Is it better to
buy an existing cottage or to purchase a lot and build?
A. There is no one answer to this question that is
for everyone. Some feel more comfortable with the
process than others. My general advice is that if you find an
existing home that you really like, go ahead and purchase it.
none of the homes you see is truly what you want, then buy a lot and
build a home that reflects your personal tastes.
While there are a number of variables to take into consideration, in
today’s market, you may be able to purchase an existing home for less
than the cost of buying a lot and building a new home.
If I should
decide to build a new home, what can I expect it to cost?
A. Construction prices for new homes are currently about $125
square foot. A complex design and upgraded features can raise
cost of construction even higher. The cost of the lot, furniture, and
any amenities would be added to reach the total price. We
well-qualified builders, and the North Carolina building code for
coastal properties is considered to be quite strict.
How difficult is
it to obtain financing for real estate purchases on Hatteras Island?
A. For qualified buyers, financing is available through a
selection of lenders. At the end of May, 30-year fixed-rate
mortgages were available with interest rates as low as 4.625% with the
payment of one point or less. Loan amounts higher than
carried an interest rate of 5.375% plus one point. A point equals one
percent of the loan amount.
You should be aware that underwriting standards have increased across
the spectrum of loans, especially for loan amounts over $417,000 and
for unimproved lot loans.
What role are
foreclosures and short sales playing in the Hatteras Island real estate
A. The growth in the number of foreclosures and short sales
certainly bears watching both for its influence on our local market as
well as being a measure of the effectiveness (or ineffectiveness) of
governmental and private efforts to stem the tide of families losing
their properties. The number of new foreclosure filings on
island was 57 percent higher during January through April of this year
compared to the same period in 2010. Through the end of May,
foreclosures represented about 8 percent of residential sales, and
short sales (situations where the mortgage balance is more than the
value of the property) accounted for 23 percent of sales. In total,
slightly over 35 percent of all residential sales were distressed
While comparatively small in terms of absolute numbers, the presence of
foreclosures and short sales in the market, combined with an excess of
supply in relation to buyer demand, have contributed to a decline in
selling prices. Purchasing foreclosed properties and short sales can be
more challenging than a traditional purchase, so be sure to seek the
assistance of a real estate agent who is familiar with these types of
transactions to guide you through the process.
Q. How does
it work if we
want to rent our cottage when we are not using it ourselves?
A. There are professional real estate firms on Hatteras Island, which
for a fee will provide a comprehensive property management program.
Services include advertising your cottage, scheduling rentals,
cleaning, maintenance, and all necessary accounting. Once you make the
decision to rent, they will take care of just about everything else.
Oceanfront and soundfront houses generally rent for 25 to 28 weeks per
year with some select homes exceeding the 28 week performance.
Soundfront properties will rent a few weeks less. Oceanside and
soundside cottages usually experience somewhat fewer rental weeks
depending on their distance from the water and the amenities that are
offered. Prime waterfront properties have the highest occupancy rates
and generate the greatest rental incomes.
difficult is it to
get flood insurance on Hatteras Island?
A. There should be little, if any, problem getting flood insurance
coverage for most properties on Hatteras Island. In fact, there are
some locations in which flood insurance may not be required. Flood
insurance is available through both the National Flood Insurance
Program (NFIP) and private insurance companies.
You should also be aware be aware that there are some areas on the
island where flood insurance offered through the National Flood
Insurance Program is not available. This is an important fact to know
when purchasing a home, since the cost of private flood insurance can
be substantially higher than the cost of an NFIP policy.
Q. What is
situation concerning the availability of water and sewage services?
A. The Dare County Water System provides central water service to all
villages on the island, although private wells are still in use in some
locations. A new central water system for Rodanthe, Waves, and Salvo
was completed in 1996, and a reverse osmosis plant in Frisco provides
water service to the southern villages.
Private septic systems are the standard method for waste disposal on
Hatteras Island, although at least one community has a central sewage
Q. How many
residents are there on Hatteras Island?
A. The 2010 census results indicated that the population of Hatteras
Island is 4,322, an increase of 321 residents over the past 10 years.
In 1990, the census reported 3,814 island residents. The populations by
village were reported as: Rodanthe, Waves, and Salvo, 624; Avon, 777;
Buxton, 1,526; Frisco, 891; Hatteras, 504.
Q. It is my
that Hatteras Island experiences severe weather. What can you tell me
about weather conditions?
A. While it is true that Hatteras Island from time to time does
experience severe weather, if you think about it, so does just about
every place else in the country! The perception that we get more than
our fair share may, in part, be the result of the prominence of Cape
Hatteras as a geographic landmark and the fact that it is frequently
used as a reference point by weather forecasters. Statistically, the
experts say that on average the Outer Banks will experience weather
that has the potential to cause damage about three times a year. A
study by the National Oceanic and Atmospheric Administration estimated
that, based on historical records, a major storm strikes the island
about every eleven years.
The weather on the island is normally quite pleasant. We get generous
amounts of rainfall. The wind averages about 11 mph, and the
average temperature is a comfortable 69 degrees. Believe it or not,
according to National Weather Service records, the official temperature
on Hatteras Island has never reached 100 degrees! The highest
temperature ever recorded was 97. Constantly changing weather patterns
are a part of life on Hatteras Island.
From my perspective, the number of warm, sunny days and star-filled
nights far outweigh the concerns created by the strong storms that have
been a fascinating part of the island’s history.
Q. Is now a
good time to
A. After experiencing double-digit rates of appreciation for
several years, the average selling prices of properties have declined
substantially, as they have across the country. Prices on
Hatteras Island offer a very strong value relative to other resort
areas along the East Coast.
This is an excellent time to be a buyer on Hatteras Island. Both
interest rates and prices are low – a combination that does not often
exist. Interest rates remain at historically low levels, and the
average selling price of residential properties has declined about 40
percent since 2005, making homes more affordable. An abundant supply of
cottages for sale means that an attractive selection of properties is
available for buyers’ consideration.
Opportunities in the market for unimproved lots are even more
compelling. Since peaking in 2006, the average selling price of lots
has declined more than 76 percent, and lot prices are continuing to
All things considered, there are encouraging signs that our
local market is on the road to recovery.
When all is
done, there is no place like Hatteras Island!
- The average
price of residential properties is moving closer to
growth curve that we saw prior to the boom years.
are starting to trend slowly toward each other after being
relatively flat for a few years.
- The number
of both homes and lots is starting increase.
- We are even
to see multiple offers on very competitively priced properties.
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.