Real Estate: A time to be grateful
By TOM HRANICKA
we enter the holiday season, it is a time of the year when our thoughts
frequently turn to appreciation for the many things for which we are
grateful. With the spirit of the season in mind, I recently
looked at the island’s real estate market to see what good news there
might be to brighten our expectations for the New Year. I was
pleasantly surprised to see the positive momentum that appears to be
building among the major market indicators.
have always believed that supply and demand are the most basic forces
that shape market conditions. It has been encouraging to
that the statistical curves are moving steadily toward the point where
the supply of property equals demand.
Currently, there is
a little over a one-year supply of residential properties available for
purchase. Based on past experience, our local market can be
considered to be in balance when a nine-month supply exists.
this equilibrium is reached, we should start to witness a cyclical
shift from a buyers’ market to a sellers’ market with a corresponding
rise in prices. In fact, we are already seeing demand
supply in some market segments. I think it is reasonable to
anticipate that the two curves may meet sometime next year.
supply/demand indicators for the unimproved lot market are trending in
the same direction as the residential market, but there is a wider gap
(2.7 years) to be closed.
The following chart displays the residential supply/demand relationship
over the past few years.
October of this year, the number of residential sales has increased
about 5 percent compared to the same period 2010 - another positive
indicator. Lower prices have certainly contributed to the
sales as buyers have recognized the remarkable opportunities that exist
in combination with historically low interest rates.
The number of unimproved lot sales on the island is down slightly from
average selling prices of both houses and lots appear to have stopped
their precipitous declines since 2009. Since then, the
prices of both types of properties have remained essentially unchanged,
forming a pattern consistent with a U-shaped recovery.
residential selling prices have stabilized in the $340,000 range, and
lot prices have leveled off in the $100,000 range although properties
with lower prices are readily available.
studying patterns in the number of sales by price range, I was pleased
to see the reappearance this year of home sales above $1
In 2010, there were no sales in these higher price ranges.
of the truly heart-wrenching aspects of the buyers’ market both locally
and nationally has been the number of homes that have been lost to
foreclosure. Therefore, it was especially uplifting to
that the number of foreclosure filings for homes and lots is down
between 25 to 30 percent from last year. Let’s hope that this
first glance, the fact that short sales and foreclosure sales have
increased this year would seem to be the Grinch in an otherwise upbeat
However, if you think about it, the sales of
distressed properties have fueled the market in recent years,
increasing the number of sales and decreasing the supply of properties
available for purchase. At the same time, until the inventory
distressed properties is sold off, it will be difficult for prices to
rise by any significant measure.
Well, there we have it – a
holiday story for the Hatteras Island real estate market. To
paraphrase a line from a beloved Christmas poem – “What to our
wondering eyes should appear, but trends that bode well for the coming
that you will agree that, all things
considered, these trends offer a hopeful message for which we can all
be thankful after six long years of subdued market conditions.
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.