Island Real Estate: Hatteras Island home sales and trends for January
Well another year is in the books, and there was a surprising development – of all areas tracked by the Outer Banks Association of Realtors in their statistical reports, Hatteras Island was the only area that didn’t see year-over-year home price appreciation.
There is a caveat, because sales volume was much lower in 2024 than it was from 2020-2022. In fact, sales volume on the entire Outer Banks was close to half of what it was in 2021. So, with fewer sales, if you get some really high dollar sales or a lot of condo sales, it can skew things a bit. Here’s a graph of sales volume over the last few years:
So why did home prices go up last year for nearly every area in the report? A lot of this has to do with inventory. We have seen a lot of homes hit the market, but we are still way behind 2019 inventory levels.
Real estate is all about supply and demand, and while supply is starting to return, (and demand is still affected by today’s mortgage rates), it’s still not back to the “normal” levels of 2019 and before. Just like sales volume is down nearly half versus 2021, our inventory of homes for sale on the Outer Banks is close to half of what it was in 2019.
On to the year-end Outer Banks Association of Realtors report –
Town-By-Town Home Price Breakdown
- Corolla – $860k (up 6%)
- Duck – $889k (up 11%)
- Southern Shores – $785k (up 6%)
- Kitty Hawk – $592,500 (up 2%)
- Colington – $485k (up 3%)
- Kill Devil Hills – $550k (up 3%)
- Nags Head – $825,500 (up 22%)
- Hatteras Island – $569k (down 4%)
- Manteo – $557k (up 14%)
- Currituck Mainland – $388k (up 1%)
- Ocracoke – $568k (up 15%)
There were big winners last year – Nags Head (22%!), Ocracoke, Manteo and Duck.
The only area to see home price depreciation – Hatteras Island.
Hatteras Island Real Estate – Almost The Same As Last Year!
That’s not a typo – home prices on Hatteras Island have dropped for 2 consecutive years in a row.
I am always singing the praises of the island to clients. After all, the vast majority of Hatteras Island can never be built on and is government-owned or managed land. That is a big appeal to anyone who is lucky enough to live on the island!
The ease of access to waterways, nature, sparsely populated beaches, (even beaches with no one else around if you have a 4WD), and some of the best surfing and windsports in the continental U.S. make Hatteras Island a special place. So why are people buying homes in Nags Head or Duck rather than exploring Hatteras Island as an option?
A lot of visitors never go south of Nags Head when they visit the Outer Banks. It’s surprising when I speak with clients who have been to the OBX several times and stayed in areas “up the beach” but never took the drive south over the bridge. If a rising tide lifts all boats, Hatteras Island home prices might just follow the other areas of the Outer Banks higher. I’m never sure if residents want to see home prices go up, (and grow their equity), or if they want to see home prices drop a little, (to make things easier for first time homebuyers.) But after two consecutive years of home prices going negative, it seems like the big statistical outlier from the year-end OBAR report.
The Year-End Dashboard
When I look at this grouping of statistics, it looks like things are getting back to normal in the housing market.
Sales are slow, and home prices are up 5%, (after being down 1% the prior year). Since 1991, the average annual home price increase across the US has been 4.3% according to the FHFA. Inventory is slowly returning to 2019 levels, and we need a better supply/demand balance in order to have equal footing for buyers and sellers to negotiate. But it’s nice to see supply slowly returning to normal levels and home price appreciation back to a normal level.
One thing to keep in mind as we move forward into 2025 is that you will start to see a lot more articles claiming that mortgage applications = homebuyer demand.
They aren’t the same thing! If mortgage rates drop from 7% to 2.5% next month, I think we all know what will happen – people will be right back in bidding wars and trying to lock up a nice house on a 30-year mortgage.
That doesn’t mean that there’s low demand for homes now, and magically next month demand for homes goes through the roof. It means that demand for low rate mortgages is through the roof. I see a lot of people on the internet conflating these two things, (mortgage applications and homebuyer demand), but they aren’t the same thing. Polls of renters indicate that up to 86% of current renters want to buy a house. Potential buyers are at various stages of the homebuying process. Looking at mortgage applications doesn’t capture this pent-up demand. It doesn’t take into account cash buyers either.
After all, over 28% of home sales last year on the Outer Banks were 100% cash. No mortgage required!
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 have a great 2025!
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/
