| January 30, 2014
Hatteras Island Real Estate: Questions owners are askingLast
Friday, Irene Nolan, editor of the Island Free Press
(www.islandfreepress.org), Hatteras Island’s online news website, wrote
a blog titled “Islands Under Siege.” In it, she cataloged many of the
issues currently facing Hatteras and Ocracoke islands, and she
commented on the economic impact that these challenges are
creating. In this article, I would like to expand on this theme
as it relates to the real estate market on Hatteras Island.
By TOM HRANICKA
the past two months, I have received a number of calls from homeowners,
who are all asking essentially the same questions – what is the current
real estate market environment like and where do you think the market
These were my responses.
Based on the
year-end statistics, 2013 will be the fifth year of flat real estate
prices on Hatteras Island. In reality, selling prices have dropped
slightly. The following chart shows the history of average residential
selling prices on the island since 2005, the year the buyer’s market
began for us. Median sale prices are following a similar pattern.
What is keeping prices from increasing?
my opinion, the principle reason is buyer uncertainty over access to
the island via the Oregon Inlet Bridge and Highway 12 on Pea Island.
It is a generally accepted axiom that markets don’t like uncertainty.
2011, the island was impacted by Hurricane Irene which left Highway 12
closed for over a month. In 2012, Super-storm Sandy again closed
Highway 12 for a period of time, followed by limited access across a
sand road that was passable only by vehicles with four-wheel drive.
Then, last December, the Bonner Bridge was closed for ten days because
of the loss of sand around the base of one set of pilings. During these
periods of closure or limited access, residents and visitors had to use
ferry service between Rodanthe and Stumpy Point to get to and from the
Prior to the bridge closure last December, some
buyers were starting to consider other areas north of Oregon Inlet as
alternatives to Hatteras Island for their purchases. Their thought
process was that they really wanted a cottage on Hatteras Island.
However, if they were going to buy, they wanted to be confident that
they could get to their property, and once they got to their cottage,
they wanted to be assured that they could get off the island by road
versus the ferries.
The recent closing of the bridge prompted
a more immediate and strident response. I heard reports that a few
buyers who had contracts to purchase properties decided to cancel those
A secondary factor that has affected the real
estate market has been the National Park Service closures of prime
fishing areas of the beach and the increasing restrictions on the usage
of the beach in general. Another issue that is starting to emerge is
the changes that are proposed for the National Flood Insurance Program.
What is it going to take to turn this pattern of flat real estate prices around?
firmly believe that buyers are anxiously awaiting some sign that
progress is being made on stabilizing access to the island. Every time
construction on the new bridge is ready to start, extremist
environmental groups obtain another injunction to stop the work.
summer, beach nourishment was supposed to take place in the high
erosion area around the S-curves north of Mirlo Beach. To date, no
action has taken place although once again, the authorities are saying
that beach nourishment will begin shortly. The bottom line is that
there has been only limited visible progress on any of these projects.
This leaves us with the question of where the real estate market is headed.
the long run, I have no doubt whatsoever that real estate prices will
recover, albeit at a moderate pace. However, in the short run, I
foresee another flat year in 2014 for the real estate market unless
buyers can see some progress, no matter how small, on the various
Highway 12 improvement projects.
A potentially positive factor
working in the background is that observers of the Hatteras Island real
estate market say that the island’s market runs in approximately
10-year cycles. If there is any validity to this pattern, then 2013
marked the eighth year in the cycle.
Conversations usually end
with the owners requesting probable sale price analyses of their
properties whether or not they plan to list their cottages for sale. As
a part of their services, our Hatteras Island real estate brokers
regularly provide owners with complimentary evaluations of the probable
sale prices of their homes or unimproved lots.
One thing is
absolutely certain - there is no place like Hatteras Island, and if we
can persevere through the current uncertainties, I am confident that
real estate values will once again reflect the unique values presented
by the island’s homes and lots.
The other certainty is that
current price levels present an extremely attractive purchasing
opportunity for those who have dreamed of having a cottage at the
beach. Any time that you can purchase property for 45 cents on the
dollar relative to peak prices, it is a situation worth your careful
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 © 2012 Tom & Louise
Hranicka. All rights reserved.