Hatteras Island Real Estate:  Fall market summary

The impact of Hurricane Irene on the island’s real estate market is the wild card at the present time, and the effect will be known only in hindsight.

However, if the experiences of other areas of the country that have dealt with natural disasters such as earthquakes and hurricanes are somewhat valid indicators, there is reason to be optimistic that any potentially adverse effects from the storm will be short-lived.

Even with the island temporarily accessible only by ferry, properties are being sold and placed under contract at a very encouraging pace.

When Hurricane Irene arrived on the island, the real estate market on Hatteras Island was playing out fairly closely to what we expected – that it would look a lot like last year. The market for residential properties appears to have stabilized, and we are hopeful that 2011 will be the year that the unimproved lot market turns the corner.

As near as we can measure it, the buyers’ market for residential properties began in June, 2005, and the market for unimproved lots peaked in 2006.  It probably ended in 2009 for residential properties, but we are still waiting to see if the lot market has reached its cyclical low point.

Here is a summary of key residential market indicators through August of this year compared to first eight months in 2010.

AVERAGE SALE PRICE

DOLLAR VALUE OF SALES

# UNDER CONTRACT

BUILDING PERMITS

# FORECLOSURE FILINGS

# FORECLOSURE SALES

# SHORT SALES

INTEREST RATES

Because of the persistent overhang of distressed properties, my sense is that we can expect to experience more sales at flat to slowly improving prices for the foreseeable future. All things considered, we are looking forward to a consistently improving market over the next few years, but nothing like a repeat of the boom years from 2001 to 2005.

It is interesting to note that today’s market environment contains aspects that benefit both sellers and buyers.

We are observing several trends that have relevance for owners considering the sales of their properties:

The overall inventories of houses and lots for sale have declined about 20 to 25 percent over the past year while the numbers of sales have increased.

Since the spring, the numbers of bank-owned properties and short sales that are available for purchase have decreased about 26 percent.

Multiple offers are being received on many properties that are realistically priced.

What these statistics indicate is that the range of choice for buyers among both traditional and distressed properties is becoming more limited – a favorable situation for sellers.

At the same time, present conditions in the real estate market represent a remarkable convergence of a high (but declining) inventory of properties for sale, compelling prices, and interest rates that are the lowest in the past 60 years. This extraordinarily positive set of circumstances for buyers may not exist again for a long time in the future.

If the secret to successful investing is buying low and selling high, then now is a great time to buy on Hatteras Island as we come off the bottom of the recent buyers’ market. Residential prices are down about 40 percent from their peak six years ago, and there is an attractive variety of properties from which to choose. Lot prices are even more eye-catching.

If you have thought about buying or selling a home or unimproved lot on the island, contact one of our local Realtors who will help you to understand the implications of current market conditions for your personal real estate objectives.