|November 22, 2017
Hatteras Island Real Estate:Each
year, I like to publish an updated version of an article that addresses
some of the most frequently asked questions that I hear from
prospective buyers and sellers. Many of the issues remain unchanged,
but occasionally a new question will make its way into the list.
As an example, prospective buyers have been inquiring more frequently
about the new bridges at the northern end of the island.
Frequently Asked Questions
By TOM HRANICKA
Associate Broker, Outer Beaches Realty
According to National Park Service reports, a little over 2 million
people visit the Cape Hatteras National Seashore each year. Quite a few
choose to spend some of their well-deserved vacation time talking with
our local Realtors about property in Hatteras Island’s seven villages.
While each person’s specific needs and interests are different, a
number of surprisingly similar questions arise during these
conversations. Some of the most commonly asked questions and their
answers are presented below.
Q. We are just starting to consider buying property. Do you have any recommendations for a game plan?
A. Hatteras Island is a very special place, and each of its villages
has its own unique charm. My advice is to visit each of the villages,
drive around, and let your feelings be your guide. Usually, one or two
areas will appeal to you more than the others. Once you find the
location that feels right for you, then start to clarify price ranges
that meet your criteria and zero-in on the “perfect” property.
Q. What does real estate cost on Hatteras Island?
A. There are properties to meet just about every need and every budget.
Be aware that prices may vary slightly among the villages.
When annual rental income is taken into account, the cost of owning a cottage on Hatteras Island can be surprisingly affordable.
- Oceanfront homes are priced from $379,000 to $2.2 million. Lower priced homes usually have erosion concerns.
- Current asking prices for oceanfront lots which are very scarce begin around $350,000 and peak at $800,000.
- Oceanside and soundside lots start around $39,000, and cottages range from $89,500 to $1.25 million.
- Soundfront homes cost $299,000 to $1.4 million.
- Soundfront lots are available for $90,000 to $725,000.
- Canalfront homes reflect asking prices from $219,000 to $850,000.
- Depending upon location, size, and age, condominiums range in price from $89,000 to $399,000.
Q. How has the Hatteras Island real estate market performed in the past?
A. Like other places around the country, the residential real
estate market on Hatteras Island participated in the boom years between
2001 and 2004 recording double digit price increases. Then, in
mid-2005, a prolonged buyer’s market took hold. The selling prices of
homes are now in the third year of a recovery presenting attractive
buying opportunities. The market for undeveloped lots on the island
peaked a year after home prices. This market segment is showing early
signs of improvement as evidenced by the number of lots under contract
to be sold. Buyers are recognizing the values that exist and are
starting to purchase in increasing numbers before prices once again
Q. Is it better to buy an existing cottage or to purchase a lot and build?
A. There is no one answer to this question that is right for
everyone. Some feel more comfortable with the construction
process than others. My general advice is that if you find an
existing home that you really like, go ahead and purchase it. If
none of the homes you see is truly what you want, then buy a lot and
build a home that reflects your personal tastes.
Q. If I should decide to build a new home, what can I expect it to cost?
A. Construction prices for new homes are currently about $150/sq.
ft. A complex design and upgraded features can raise the cost of
construction even higher. The cost of the lot, furniture, and any
amenities would be added to reach the total price. We have
well-qualified builders, and the North Carolina building code for
coastal properties is considered to be quite strict.
Q. How difficult is it to obtain financing for real estate purchases on Hatteras Island?
A. For qualified buyers, financing is available through a variety
of lenders. In late November, 30-year fixed-rate mortgages
carried interest rates a little less than 4.0% with the payment of one
point or less.
Q. What role are foreclosures and short sales playing in the Hatteras Island real estate market?
A. It appears that the distressed property trend has run its
course. During the past year, foreclosures represented about 3 percent
of residential sales, and short sales (situations where the mortgage
balance is more than the value of the property) accounted for 4 percent
of sales. In total, less than 10 percent of all residential sales were
Purchasing foreclosed properties and short sales can be more
challenging that a traditional purchase, so be sure to seek the
assistance of a real estate agent who is familiar with these types of
transactions to guide you through the process.
Q. How does it work if we want to rent our cottage when we are not using it ourselves?
A. There are professional real estate firms on Hatteras Island which
for a fee will provide a comprehensive property management program.
Services include advertising your cottage, scheduling rentals,
cleaning, maintenance, and all necessary accounting. Once you make the
decision to rent, they will take care of just about everything else.
Oceanfront houses generally rent for 25 to 28 weeks per year with some
select homes exceeding the 28 week performance. Soundfront properties
will rent a few weeks less. Oceanside and soundside cottages usually
experience somewhat fewer rental weeks depending on their distance from
the water and the amenities that are offered. Prime waterfront
properties have the highest occupancy rates and generate the greatest
Q. What happens to the furnishings when a home is sold?
A. In the majority of sales, the buyer and seller negotiate a price for
the furnishings, and the furnishings stay with the property.
Lenders can only lend on the land and the structure. The
furnishings are considered to be personal property and are sold by a
separate Bill of Sale in conjunction with the transaction. The seller
may choose to identify certain items that are excluded from the Bill of
Sale such as the contents of owner storage closets and items of
personal or sentimental significance.
Q. How difficult is it to get flood insurance on Hatteras Island?
A. There should be little, if any, problem getting flood insurance
coverage for most properties on Hatteras Island. In fact, there are
some locations in which flood insurance may not be required. Flood
insurance is available through both the National Flood Insurance
Program (NFIP) and private insurance companies.
You should also be aware that there are some areas on the island where
flood insurance offered through the National Flood Insurance Program is
not available. This is an important fact to know when purchasing a home
since the cost of private flood insurance can be substantially higher
than the cost of an NFIP policy.
Significant changes are taking place in the National Flood Insurance
Program as well as in local flood zone maps. Buyers and sellers are
advised to consult with a professional insurance agent to understand
the impact of these changes on a specific property.
Q. What is the current situation concerning the availability of water and sewage services on Hatteras Island?
A. The Dare County Water System provides central water service to all
villages on the island, although private wells are still in use in some
Private septic systems are the standard method for waste disposal on
Hatteras Island, although at least one community has a central sewage
Q. What are the current plans for stabilizing Highway 12 access to the island?
A. There are three main projects to improve Highway 12 between Oregon Inlet and the northernmost village of Rodanthe.
believe that visible progress on these projects will serve as a
stimulus for the next cycle of growth in the Hatteras Island real
new bridge over Oregon Inlet parallel to the existing Bonner Bridge is
about 50 percent complete. This bridge is expected to be open to
traffic in late 2018.
new concrete bridge to replace the metal bridge over the Pea Island
Inlet is nearing completion and should be fully operational by the end
of 2017. Once this bridge is finished, the existing metal bridge will
third effort consists of a road that will extend from an area north of
the S-Curves from Highway 12 to the Pamlico Sound connecting to a
bridge over the Sound that would by-pass the S-Curves and re-enter
highway 12 in north Rodanthe. The design–build contract has been
finalized. If all goes according to plan, the “jug handle” bridge will
be started in March 2018 and completed in 2020.
Q. How many year-round residents are there on Hatteras Island?
A. The 2010 census results indicated that the population of Hatteras
Island is 4,322 compared to 4,001 in 2000. In 1990 the census reported
3,814 island residents. The populations by village were reported as:
Rodanthe, Waves, and Salvo 624; Avon 777; Buxton 1,526; Frisco
891; Hatteras 504.
Q. It is my impression that Hatteras Island experiences severe weather. What can you tell me about weather conditions?
A. While it is true that Hatteras Island from time to time does
experience severe weather, if you think about it, so does just about
every place else in the country! The perception that we get more than
our fair share may, in part, be the result of the prominence of Cape
Hatteras as a geographic landmark and the fact that it is frequently
used as a reference point by weather forecasters. Statistically, the
experts say that on average the Outer Banks will experience weather
that has the potential to cause damage about three times a year. A
study by the National Oceanic and Atmospheric Administration estimated
that, based on historical records, a major storm strikes the island
about every eleven years.
The weather on the island is normally quite pleasant. We get generous
amounts of rainfall. The wind averages about 11 mph, and the
average temperature is a comfortable 69°. Believe it or not, according
to National Weather Service records, the official temperature on
Hatteras Island has never reached 100°! The highest temperature ever
recorded was 97°. Constantly changing weather patterns are a part of
life on Hatteras Island.
From my perspective, the number of warm, sunny days and star-filled
nights far outweigh the concerns created by the strong storms that have
been a fascinating part of the island’s history.
Q. Is now a good time to buy?
A. This is an excellent time to be a buyer on Hatteras Island. Both
interest rates and prices are low – a combination that does not often
exist. Although projected to increase, interest rates remain near
historically low levels, and the average selling price of residential
properties is over 40 percent lower than the high point in 2005 making
homes more affordable. A fairly large supply of cottages for sale means
that a good selection of properties is available for buyers’
Opportunities in the market for unimproved lots are even more
compelling. Since peaking in 2006, the average selling price of lots
has declined over 70 percent.
There are encouraging signs that our local market is in the early
stages of recovery after a prolonged buyer’s market, and new
construction is visible across the island.
Now that you have the answers to the most frequently asked questions
about island real estate, take the next step and start investigating
how current opportunities may fit into your personal plans to purchase
a home or undeveloped lot. When all is said and done, there is no place
like Hatteras Island!
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 © 2017 Tom & Louise Hranicka. All rights reserved.)