| March 10, 2014
Hatteras Island Real Estate:Real
estate market statistics can be analyzed in many different ways and for
many different purposes. For this article, I used market data to
develop a profile of buyer preferences based on last year’s sales
results. My thought was that the best way to identify those preferences
was to see how buyers voted with their purchasing dollars.
A profile of buyer preferences
By TOM HRANICKA
2013, the total dollar value of real estate sales on Hatteras Island
was $67,291,836 generated through 256 individual sales. Residential
sales accounted for 89.7 percent of the sales volume and 73.0 percent
of the sales. Unimproved lots accounted for 9.4 percent of the value of
sales and 26.2 percent of sales. Commercial property transactions
represented 0.9 percent of the dollar value and 0.8 percent of sales of sales.
figures confirm the fact that Hatteras Island is primarily a
residential real estate market. However, when we talk about the market
being predominantly residential, we need to differentiate between
detached single family homes and condominiums.
homes represented more than 90 percent of residential sales, while
condominiums accounted for six percent of the sales. Since 2005,
condominium sales have represented on average about five percent of the
total dollar value of residential sales and a little over nine percent
of the number of sales.
Buyers traditionally purchase unimproved
lots because they want to construct a custom-designed home that meets
their personal specifications, or they buy land for investment
purposes. At the same time, many buyers are hesitant to purchase a lot
and build a new home because the construction will be taking place at
quite a distance from their primary residence, and they are concerned
about their ability to effectively monitor the progress of the project.
there has been a very limited market for commercial properties on the
island. Last year, there were only two commercial sales with a dollar
value of just $625,000.
Since detached single family homes play
such a pivotal role in the Hatteras Island real estate market, let’s
delve deeper into buyer preferences associated with this market segment.
today’s market, location, condition, and price are the main focal
points of buyers’ decision-making criteria. From the standpoint
of location, oceanside purchases accounted for almost 60 percent of the
sales transactions while soundside sales represented just over 40
percent of the total. Quite honestly, I was somewhat surprised that the
results were not weighted more heavily in favor of the oceanside.
Looking back, there were some exceptional purchasing opportunities for
soundside homes and lots.
Which of the island’s villages do
you think attracted the most buyer interest? This market indicator is a
little more difficult to interpret because of the variation in the
number of real estate parcels in each village. Statistically, Avon,
Hatteras village, Salvo, and Frisco reported the highest number of
sales in 2013, followed by Rodanthe, Waves, and Buxton.
evaluating buyers’ perceptions of location, qualitative considerations
often play an important role. For example, the three northern villages
are much closer to the restaurants and attractions north of Oregon
Inlet, and they involve a little less driving time from buyers’ homes.
In addition, you might be surprised by how many buyers say they prefer
Avon because it is where the Food Lion is located, and, of course,
Hatteras village is the home of our charter fishing boat fleet. When
all is said and done, for whatever reason, visitors usually end up
preferring one village as their favorite and end up buying the home of
their dreams in those locations.
Another factor in buyer
preferences relative to location is water frontage. There is a saying
in real estate that “nothing adds value like water frontage.”
That axiom seems to hold true in the eyes of buyers on Hatteras Island.
Last year, waterfront properties accounted for over 35 percent of all
sales on the island.
Oceanfront properties were in highest
demand among waterfront locations followed by canalfront, soundfront,
lakefront, pondfront, and creekfront. This distribution seems to
make sense since oceanfront properties with their proximity to the
beach are generally considered to be a preferred setting when the
purchase price fits into a buyer’s budget. Canalfront properties have
become especially attractive because of their affordable prices and
their ease of access to the Pamlico Sound for boat owners.
terms of the number of bedrooms that buyers favor, nearly 75 percent of
all single family sales featured three, four, or five bedrooms with
three-bedroom homes being the largest component accounting for almost
40 percent of sales. I expected that four- or five-bedroom cottages
might come out on top. Actually, when taken together, four- and
five-bedroom homes characterized a little over 35 percent of single
family sales – almost the same percentage as three-bedroom cottages.
The largest homes with six, seven, and eight bedrooms represented 20
percent of the market.
The heated living area or square footage
of homes is often mentioned by buyers when they are discussing their
ideal home with their agent. Last year, homes with less than 1,500
square feet of living area were associated with about 25 percent of
single family sales. Those that were 2,000 to 3,000 square feet in size
represented just about the same percentage. Cottages featuring 1,500 to
2,000 sq. ft. accounted for just over 20 percent of sales. Homes with
3,000 to 4,000 square feet were seen in around 15 percent of sales. The
largest homes with over 4,000 square feet of living area were the least
favored among buyers with fewer than 10 percent of the market.
about the age of the homes sold in 2013? Intuitively, we might
anticipate that newer properties would be more appealing to buyers than
older cottages. This was, in fact, the case. During 2013, homes built
since 2000 were reported in over 40 percent of sales. At the same time, cottages
built before 1979, those constructed in the 1980s, and those built
between 1990 and 1999 each represented about 20 percent of total single
family sales – an interesting mix to say the least.
the most important underlying factor influencing many of these
statistics was the selling prices of the properties. To correlate all
of the variables would require quite an extensive research project.
However, we can gain some valuable insights into buyer preferences by
examining the sales by price range.
Eighty-five percent of
single family residential sales last year had selling prices under
$500,000 with homes in the $200,000 to $300,000 price range being the
most popular. Overall, two thirds of single family purchases were in
the $100,000 to $400,000 price range. The lowest priced sale was
$40,000 for a two-bedroom cottage, and the highest priced transaction
was $900,000 for an eight-bedroom oceanfront home with six baths.
There were no million dollar sales on the island for the second year in
Finally, no survey of buyer preferences would be complete
without noting the financial attraction of foreclosed and short-sale
properties. While the importance of distressed properties is on the
wane both nationally and on Hatteras Island, these homes and lots still
play a significant role in the island’s real estate results.
2013, short sales and foreclosures made up nearly a third of
residential sales and 40 percent of land sales. It may be interesting
to note that there was about an equal number of residential bank-owned
sales and short-sales, but there were more foreclosed lot sales than
short-sales. All things considered, distressed properties were
responsible for about 35 percent of all real estate sales on the island
When I was planning this article, I initially thought
that buyer preferences might be so clear-cut among all of the component
categories and that a composite profile of the typical Hatteras Island
buyer would magically appear at the end of the analysis. In reality,
some preferences ended up being statistically well-defined while others
were more divergent.
Some of the observations concerning buyer behavior that were characterized by a high degree of clarity were these:
- Residential sales dominated the Hatteras Island real estate market.
- Single family detached home sales overwhelmingly exceeded condominium purchases.
cottage sales were preferred by a ratio of at least 2 to 1 over other
bedroom options as were homes constructed since 2000.
property sales surpassed purchases in soundside locations, and Avon,
Hatteras, Salvo, and Frisco were the villages recording the most sales.
size of homes as measured by square footage displayed much less
consistency. Also, except for noting that the most residential
purchases were in the $200,000 to $300,000 price range and that only 15
percent of sales had selling prices above $500,000, it was difficult to
identify a distinct buying pattern relative to purchase prices.
some market indicators seemed to stand off by themselves. Examples
included data showing that 35 percent of purchases were in waterfront
locations and that a similar percentage of sales were attached to
foreclosures and short sales.
sense is that each of us has some preconceived ideas about buyer
preferences in the Hatteras Island real estate market. How did the
information presented in this article match up against your anticipated
(Note: To determine the dominant buyer
preference for each of the property characteristics that were studied,
the feature with the highest number of sales during 2013 was selected
as the preferred choice among buyers.)
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 © 2014 Tom & Louise Hranicka. All rights reserved.