March 6, 2015
Hatteras Island Real Estate: 2015 Market Overview
By TOM HRANICKA
the beginning of each year, I find it helpful to sit back and try to
develop a broad overview of the real estate market on Hatteras Island –
where it has been, where it is now, and what the future might hold.
back on the island’s real estate market over the past 10 years, we can
observe that a buyer’s market for residential properties began in the
summer of 2005. Over the next four years, the average selling price of
homes plummeted about 41 percent. Then, since 2009, selling prices have
been essentially flat. Last year, the average residential selling price
was $322,236 – down 45 percent since the peak in 2005. The following
chart, graphically displays this pattern of price performance.
market for undeveloped lots followed a similar pattern, peaking in
2006, a year after residential properties. Average lot selling prices
then dropped 69 percent over the following three years, and they have
remained basically flat since then. In 2014, the average selling price
of lots was down about 74 percent from their high point. This chart
shows the trends that we have seen in undeveloped lot prices during the
present real estate cycle.
these observations as background, where does the real estate market on
the island stand today? This table depicts the major market indicators
at the end of 2014 in comparison with year-end 2013.
HATTERAS ISLAND REAL ESTATE MARKET INDICATORS
2014 VS. 2013
you can see, 2014 was another flat year for the island’s real estate
market. From a broad viewpoint, that might be a fairly positive outcome
given that the island experienced significant access issues after
Hurricane Irene in 2011, Super-storm Sandy in 2012, the closing of the
Bonner Bridge for several days in December 2013, and Hurricane Arthur
this past July.
The theme of the current residential market is
more sales at lower prices. The increase in the number of sales
resulted in an increase for the year in the total dollar value of home
sales. The market for undeveloped lots remained in the doldrums with
almost all major indicators recording a decline. The rise in the
average sale price is probably attributable in part to several large
sales which pushed the final value up. If these sales were removed, the
average selling price would actually show a decrease for the year.
think that it is important to note that while distressed properties
(foreclosures and short sales) have heavily influenced selling price
statistics in past years, this segment of the market is noticeably
In my opinion, the most positive interpretation of
the current statistics is that the market continues to stabilize and to
become positioned for the next upward cycle.
This brings us to
a discussion of the future and where the market might be headed. There
are a variety of influences that we need to consider.
of the Hatteras Island real estate market have commented that the
island follows approximately a 10-year cycle. If true, 2015 will be the
tenth year of the current cycle. Some of those same individuals have
expressed the opinion that when the market does recover, it will
exhibit a more traditional growth rate in the five to six percent range
rather than the double digit appreciation that we saw before the market
started its most recent downturn. This leads me to believe that 2015
will be a transitional year between the end of the buyer’s market that
we have been experiencing and the start of a new seller’s market.
the uncertainties surrounding access to the island via Highway 12 have
influenced and are influencing buyers’ decisions concerning the
purchase of properties on the island. Buyers are looking for assurance
that they will be able to get to their vacation homes without delay and
once here, that they will be able to get off the island with minimal,
if any, inconvenience. Long-term, permanent solutions for the
replacement of the Bonner Bridge over Oregon Inlet and resolution of
the hot spots where the road closes from time to time are essential to
the future health of the island’s real estate market in particular and
the prosperity of the island’s business community in general.
factor that is having an impact on the real estate market is the issue
of beach access and off-road vehicle restrictions on beach driving.
While the effect of this constellation of topics is hard to quantify,
it is definitely an area of concern for an important segment of
visitors to the island and to homeowners.
Finally, we need take
into consideration the natural forces that affect Hatteras Island. The
periodic strong storms and hurricanes that we experience together with
their after-effects are a well known aspect of life on the island that
will continue to affect us in the future. I also believe that
erosion-related issues on the island have become more prominent during
the current real estate cycle and may have an impact on selling prices
in some locations.
After studying how the real estate market has
performed over the last decade, it would be easy to form a negative
opinion of future prospects for sales and prices. My sense is that
nothing could be further from the truth and that, in fact, we may be
experiencing a classic opportunity to buy property at the low point in
the real estate cycle, setting the stage for making a profit when the
property is sold.
As each of us evaluates the past, present, and
future of the real estate market through our own unique set of filters,
let us always keep in mind the unique and very special place that is
Hatteras Island. With over 60 percent of the island held in public
trust and protected from development and with seemingly endless miles
of deserted beaches and windswept sand dunes, there is no other place
like this barrier island that we call home, whether it is for a few
days each year or for a lifetime. This is the heart of the value
proposition that will always attract people to our shores and that
will, in turn, assure the viabilty of our real estate market in the
Hranicka is a broker with Outer Beaches Realty. Questions and comments
may be sent to him at P.O. Box 280, Avon, NC 27915 or by e-mail to [email protected]. Copyright © 2015 Tom & Louise Hranicka. All rights reserved.)