| February 1, 2016
Hatteras Island Real Estate: 2016 State of the Market ReportBack
in the 1960s, Bob Dylan wrote a hit song titled, “The Times They Are a
Changin.” This could easily describe the current state of the Hatteras
Island real estate market with the addition of the words “for the
For perspective, a buyer’s market began on Hatteras Island in June
2005. At the depths of that market, residential selling prices had
dropped almost 50 percent, and undeveloped lot prices had plummeted
close to 75 percent. When evaluating where the market is today,
consider the following trends.
Most key real estate market indicators are showing improvement.
The number of residential and undeveloped lot sales are both displaying
strong upward momentum. The total dollar value of residential sales was
up over 11 percent last year when compared to 2014. It was refreshing
to finally see meaningful improvement in the market for undeveloped
However, the average selling prices of both houses and lots continued
to remain persistently flat. The average residential selling price was
$331,901, and the corresponding value for lot prices was $99,274.
The geographic distribution of sales across the island was fairly
evenly spread among the tri-village area, Avon, and the three southern
Several years ago, distressed properties (short sales and foreclosures)
were a dominant feature of the island’s real estate market. Today,
there are only eight short sales and two foreclosures in the
residential inventory. A reduction in the number of distressed
properties was a pre-condition for prices to start rising once again.
We are also starting to see a recovery in the market for high-end
properties. Last year, seven homes had selling prices of $1 million or
more. In 2014, there were four million-dollar-plus properties sold.
This was in contrast to the two previous years when no million-dollar
homes were reported sold on the island. In addition, investors are
beginning to re-enter the market.
Overall, it would be reasonable to conclude that during 2015, we may
have witnessed the beginning of a long-awaited recovery in the island’s
real estate market.
Looking at broader economic measures of the Hatteras Island economy,
meal tax receipts which reflect the health of food service businesses,
were up nearly six percent through November, the latest data
Occupancy tax receipts which are an indicator of the performance of the
island’s lodging industry were more than five percent ahead of 2014
The charter fishing boat fleet reportedly had a good year with gas prices down and no extended periods of bad weather.
The strength or weakness of commercial fishing seemed to depend on what
targets the boats were pursuing. It was a banner year for shrimp and
dogfish catches, but Spanish mackerel fishing was a challenge. Pound
netters had varying degrees of success.
In the recreational sector, the bait and tackle shops for the most part
reported having a good year. Lots of visitors and good weather
generally contributed to positive bottom line results. At the same
time, the periodic closure of prime fishing areas and beach driving
restrictions are still drawing negative reactions from fishermen.
Visitation statistics presented by the Outer Banks Visitors Bureau
showed mixed results. More than 2.3 million people visited the Cape
Hatteras National Seashore – an increase of three percent over the
previous year. Remember that in addition to Hatteras Island, the Cape
Hatteras National Seashore extends more than 70 miles from South Nags
Head to Ocracoke Island.
The number of people climbing the lighthouse was down about 15 percent,
and vehicle traffic on the Hatteras to Ocracoke ferry was 2.3 percent
lower than in 2014. Some of this weakness was attributable to
facilities being closed for a brief period when Hurricane Joaquin
threatened the island last fall.
Another lingering weakness in the island’s economy is the construction
industry. Last year, on average only about two new single family
building permits were recorded each month. This is the same level of
activity that we have seen for quite a few years. Builders have
taken up the slack by focusing on repairs, remodeling, and additions.
2015 will be remembered as a watershed year for actions to stabilize
access to the island via Highway 12. The most important development was
the agreement that was reached between the North Carolina Department of
Transportation and the environmental groups represented by the Southern
Environmental Law Center, allowing construction of a new bridge over
Oregon Inlet. Work on the replacement bridge is expected to begin in
In addition, a contract was signed for the construction of a concrete
bridge that will temporarily replace the metal bridge over the inlet on
While these two projects are underway, the NCDOT will be working with
the Federal Highway Administration to identify long-term options for
protecting Highway 12 at the S-Curves north of Rodanthe and at the Pea
Finally, a beach nourishment project is planned to expand the beach
from an area north of the Buxton motels to the end of Old Lighthouse
Road. This project is scheduled for the summer of 2016.
When taken together, these infrastructure improvements demonstrate that
the various governmental entities are paying attention to the
importance that stable access to the island and the quality of our
beaches have to both residents and visitors.
All things considered, this is a very positive report for the real
estate market and for Hatteras Island businesses. Barring any severe
storms, there is reason to believe that 2016 will see a continuation in
the recovery of the island’s economy.
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.)