| August 31, 2015
Hatteras Island Real Estate:Each
year, the National Association of Realtors publishes an Investment and
Vacation Home Buyers Survey that reflects trends outside the primary
residential and commercial markets. The survey, which was based on a
sample of nearly 2,000 home buyers in 2014, always contains some
Trends in vacation and investment properties
By TOM HRANICKA
Before discussing this year’s survey, a word of caution is in order.
Loosely translated, the National Association of Realtors defines an
investment property as a home bought to rent to others or to diversify
investments. A vacation home is one that is used as a family retreat or
is purchased as a principal residence in the future.
You can see from these definitions that our Hatteras Island properties
are really a hybrid of these two categories. Most of the residential
purchases on Hatteras Island would probably be considered as vacation
homes rented to others for part of the year.
With these caveats in mind, last year, the market share of vacation
home buyers increased from 13 percent to 21 percent of the total
sampled, and investment purchases dropped slightly from 20 percent to
19 percent. This suggests that 40 percent of residential sales
nationwide in 2014 represented vacation or investment home
purchases. While no similar data are available for Hatteras
Island, my sense is that investors are just starting to reenter the
The survey also indicated that 45 percent of vacation home buyers and
44 percent of investors purchased properties that were either
foreclosures or short sales. By comparison, last year on Hatteras
Island, 26 percent of residential sales were distressed properties.
This segment of the market on the island is clearly declining.
Among vacation buyers, 40 percent purchased in a beach area, 19 percent
bought in the country, and 17 percent purchased in the mountains
followed by 15 percent choosing lakefront, 4 percent buying ranches,
and 5 percent preferring other locations. The south was the region of
the country most favored by these buyers. The west came in second at 25
Looking at price performance, nationally, the median sales price of
vacation homes declined 11.1 percent for vacation properties and 3.8
percent for investment properties when 2014 was compared to 2013. In
contrast, in the Hatteras Island market, the median residential sales
price decreased 8.8 percent. Both the number of sales and the total
dollar value of sales on the island increased around 11 percent in 2014.
From a marketing standpoint, the majority of vacation buyers looked
online as the first step in their home buying proces,s followed closely
by contact with a real estate agent. Investment buyers preferred to
contact a real estate agent as their first choice, followed closely by
online searches. Similarly, 48 percent of vacation home buyers and 43
percent of investment property purchasers found the home that they
ultimately purchased online. Locally, we are seeing this same pattern
in which buyers first identify properties through Internet sources
before they visit the island to actually look at homes that are of
interest to them.
More than 80 percent of vacation and investment buyers felt that now is
a good time to purchase real estate. The majority of buyers found the
mortgage application and approval process to be just about what they
expected, but not difficult.
It is always fun to look at national trends and statistics and to
compare them with what is happening in our little corner of the
country. All things considered, I think that we are doing pretty well
considering that a market recovery is just starting to take shape on
(Source: National Association of Realtors Investment and Vacation Home Buyers Survey 2015, April 2015.)
Hranicka is a broker with Outer Beaches Realty. Questions, comments, or
suggestions for future articles may be sent to Hranicka at P.O. Box
280, Avon, NC 27915 or emailed to [email protected]
Copyright © 2015 Tom & Louise Hranicka. All rights reserved.)