Island Real Estate: Hatteras Island home sales and trends for August

There are a lot of changes happening in the real estate world right now, and not just as it pertains to home sales or mortgage rates. If you’ve been reading online or watching TV lately, you probably have seen that the NAR (National Association of Realtors®) reached a settlement in a lawsuit and it has changed the way that Realtors® and consumers do business together. One of the big changes here on the Outer Banks is that members of OBAR (the Outer Banks Association of Realtors®) can be fined if we don’t have a signed buyer agency agreement before showing properties. Before this settlement went into effect (just a few days ago), I could take people “house hunting” without that signed agreement. Going forward, if you want to look at homes with a member of the Outer Banks Association of Realtors® you’ll need to sign an agreement before proceeding on the house hunt.

The other major change is that member agents can’t enter any shared commission information (to be split between the listing agent and buyer’s agent) into our MLS anymore. The days of looking in an MLS to see if a seller is offering a commission to the buyer’s agent (for bringing a buyer to the transaction) are over now. Real estate agents will need to call the listing agent to see what (if any) concessions a seller is willing to provide to the buyer’s side. Some sellers may not want to offer any concessions, and there may be situations where a homebuyer has to pay his real estate agent’s fees out of his own pocket at closing. If you’re a cash buyer there’s an argument that this could be a good option now. It will be important to use real estate agents with good negotiation skills and a good grasp on how the market is adjusting, because ultimately if you want a house it’s our job to help you snag it! This might take a little while to adapt to, but I’m confident the market will sort things out over the next couple of months. It always does!

I believe it’s important to have professional representation on both sides of a deal. I think at some point, probably sooner rather than later, listing agents whose sellers don’t offer shared compensation will end up working with unrepresented buyers, and those buyers will purchase properties where the listing agent didn’t advise them to get a home inspection or didn’t disclose something they knew about the foundation or the septic system, and those listing agents will get sued. I want both sides represented by professionals who know how to navigate the closing process and have fiduciary responsibilities to their clients. My main problem with NAR’s lawsuit settlement is that I feel like they shifted the liability for lawsuits from themselves and local MLS boards to individual agents, (mainly listing agents). And there will be more buyers trying to go it alone and not have any representation on their side of the closing table, which can lead to a lot of confusion, headaches and even regret after buying a home. I’m not sure it serves homebuyer interests in the end.

On to this month’s Outer Banks Association of Realtors report –

Inventory is Starting to Recover

As you can see, we’ve gone from 456 residential properties for sale in July 2023 to 691 last month. While that’s a big spike in available inventory, keep in mind that our total residential inventory on the Outer Banks in June 2019 was 1,579. Today’s inventory is around 44% of what it was back in 2019. We have a long way to go if we’re going to get back to “normal” levels. In areas across the U.S., you can usually tell where home prices are dropping, their inventory levels are close to or even higher than they were in 2019. In areas where inventory is still a fraction of what it used to be, there’s upward pressure on home prices.

Hatteras Island Real Estate – Almost The Same As Last Year!

It doesn’t get much closer than this for us stat geeks. Total sales volume is off just 3% but the median sales price is exactly the same as it was last year. April and May were pretty solid months as far as sales volume (as many new owners want to take advantage of the rental season starting up), but we are still quite a bit behind 2022 when it comes to sales volume and even home prices. There are other areas here on the OBX (like Corolla and Kill Devil Hills) where home prices are higher than ever, but it seems like Hatteras Island is still flying under the radar. Some potential homebuyers waiting for mortgage rates to drop might say that’s a good thing…

Home Affordability Is An Issue

I see a lot of people commenting online about how homes aren’t affordable anymore and this is the worst it’s ever been. I mean, it’s not great, but it’s not the worst it’s ever been. From 1979-1982 it required more of a median monthly income to make a mortgage payment than it does today. A lot of times you’ll see people using charts and graphs that only go back to 1990 or 2000, but it’s important to look at the big picture. There are rumblings that we might finally see some relief in mortgage rates starting in September, but in reality, mortgage rates are already much lower than they were last year. Going back to May of 2023, the best 3 days for mortgage rates all happened this month. So let’s keep this trend going and hopefully, we can get the arrow moving down on that chart above.

If you would like to see the entire report you can view it every month on the OBAR website:
https://www.outerbanksrealtors.com/market-data/

Thanks for reading and enjoy some fall fishing!

About the Author: Stephen Smith is an Outer Banks realtor with Real Broker, LLC. He was nationally recognized as an award-winning agent in 2021 and 2022 at his previous firm. He has lived on the Outer Banks for nearly 20 years, and met his lovely wife on Hatteras Island. They currently reside in Nags Head with their daughter, but Hatteras Island is still home in many ways. For questions on the Hatteras or greater OBX real estate market, you can contact Stephen directly at stephensmithobx@gmail.com or 252-216-9230. His website is https://www.stephensmithobx.com or you can receive his weekly newsletter by signing up at https://stephensmithobxrealtor.substack.com/