| June 3, 2013
month, I wrote about the conversations that my Realtor colleagues and I
have been having with sellers. In this article, I would like to share
discussions that we are currently having with prospective buyers.
The central theme of these conversations is quite simply – it’s a great
time to be a buyer on Hatteras Island!
Hatteras Island Real Estate: Conversations with buyers
By TOM HRANICKA
According to the National
Association of Realtors, vacation home sales increased 10 percent in
2012. That trend was mirrored on Hatteras Island, where residential
sales rose 8.5 percent over the previous year. Homes purchased for
vacation and investment purposes accounted for 35 percent of all
residential sales in the country. These statistics indicate that there
is growing demand for homes other than primary residences.
no secret that real estate is a cyclical business. There are
times when market forces favor the sellers of properties and other
times when circumstances favor buyers. Since the summer of 2005, we
have experienced a buyer’s market on the island. This has created
an environment that makes it an opportune time for those who are
thinking about buying a cottage or lot to turn their thoughts into
While it is highly unlikely that anyone can time their
purchase to match the exact bottom of the market, it seems reasonable
to conclude that we are in the bottom range of the Hatteras Island real
estate market cycle. The market for residential properties peaked in
2005. Lot sales reached their high point a year later. For the past
four years, the average selling price of properties has been relatively
flat, setting the stage for the next upward movement.
of properties presently exceeds buyer demand on the island. During May,
there were 298 residential properties for sale, while 200 were reported
sold during the previous 12 months. This equates to a 1.5 year
inventory of unsold homes and condominiums. The corresponding number
for undeveloped lots is a 1.7 year supply. The implication for buyers
is that there is a good selection of homes and lots from which to
Interest rates on residential mortgage loans remain near
their historical low point. The interest rate on a conventional loan
($417,000 or less) is currently in the 3.75 percent range with the
payment of one point (1 percent of the loan amount). From a long-term
perspective, this represents a very low cost of borrowing.
combination of eye-catching prices and low interest rates makes the
affordability of properties very attractive. For example, the
monthly principal and interest payment on a $340,000 home today would
be about $500 less than the payment was in 2002 for the same priced
property. Alternatively, today’s rates would allow a buyer to purchase
a higher priced home for the same monthly outlay. This situation
presents a strong incentive to purchase before interest rates once
again begin to rise.
Rental income can help offset some of the
expenses of ownership. There is a vibrant market for vacation rentals
on the island, and our real estate companies can help maximize the
rental income for homeowners who choose to place their cottages in a
property management program.
Island Realtors offer a wide
range of services and expertise to help buyers find the right property,
determine what comparable properties are selling for, assist with
paperwork and negotiations, and suggest lenders to arrange financing.
you consider the factors that make this such a good time to be buying a
place at the beach, never forget those things that make Hatteras Island
so special and that keep a firm grip on our thoughts, regardless of how
far away we may travel. Whether it is the windswept sand dunes,
the crashing surf, or the unspoiled beauty of an island where 62
percent of the land is held in public trust, there is something that
captures our imaginations and causes all of us to want to make Hatteras
Island a more permanent part of our lives.
When all is said
and done, I think each of us in our own way would echo the sentiment
expressed in the refrain of a locally written song – “My Heart Will
Always Be in Carolina.” Give it some thought. This may be
the time you have been waiting for – the time to turn your dream of
owning a Hatteras Island cottage or lot into reality!
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] )
Copyright © 2013 Tom & Louise Hranicka. All rights reserved.