| August 8, 2016
Hatteras Island Real Estate: Undeveloped lot market update
By TOM HRANICKA
of the reports and analyses of the real estate market that we see both
locally and nationally are focused on residential properties. I think
it is important that we also keep abreast of the market for undeveloped
lots because there are some real bargains to be found in this sector
and because the summer and fall months are prime times for lot
Buyers often like to acquire lots before the end of the year, build
their new homes over the winter months, and have them ready for the
next rental season.
provide some perspective on the size of the market for lots relative
to the market for residential properties, during the past year,
undeveloped building sites accounted for about 24 percent of total real
estate sales and 10 percent of the total dollar value of
Looking back, the market for lots peaked in 2006, followed by a 76
percent decline in average selling prices over the next four years.
After that drop, selling prices have remained essentially flat. Average
and median sale prices have followed similar trends as shown in the
The lot market is still recording mixed results, although the total
dollar value of undeveloped property sales was higher during the first
half of this year, compared to the same period in 2015, and there are
some indications that selling prices may be improving.
It is also interesting to note that while the presence of distressed
properties was a significant factor in the island’s real estate market
several years ago, today, out of 180 undeveloped lots for sale, only
nine are bank owned, and two are short sales. This is good news since a
reduction in the distressed property inventory has been considered to
be a pre-condition for prices to increase.
There is a saying that nothing increases the value of a property like a
waterfront location. This table offers some insights into the
availability of waterfront properties and their price ranges.
In my opinion, undeveloped properties represent opportunities in
today’s market that are worth careful consideration. Some building
sites in very attractive locations can be purchased for as little as
$30,000 to $50,000.
It looks like a good time to buy before prices take off again. As
an example, the selling prices for oceanfront lots through June ranged
from $300,000 to $500,000. This is about half of what they were during
the peak year of 2006.
Currently, financial news reports are filled with articles concerning
investor anxiety over the possibility of a significant stock price
decline after seven years of gains. The potential for interest rate
increases by the Federal Reserve is also a favorite topic of ongoing
discussion. Given the uncertainties of the present financial market
outlook, it may make sense to look for a reasonably priced real estate
purchase to provide some balance in relation to other investments.
Undeveloped lots are certainly an essential segment of the overall
Hatteras Island real estate market. This may be an opportune time to
contact one of our local island Realtors, and explore how an
undeveloped property might fit into your personal financial strategy!
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 © 2016 Tom & Louise Hranicka. All rights reserved.)