Island Real Estate: Takeaways from the March 2023 OBAR Statistical Report

Hatteras Island is in the news lately, as a Vacasa report listed us as the 2nd best place to buy a beach house in the U.S, which was picked up by various media outlets.

From an investment perspective, those stats would be really impressive, but there are a couple of caveats. The median sales price so far this year on very limited sales volume is $519,000 on Hatteras Island, not $412,500. Last year, the median sales price on Hatteras Island was $599,000.

Secondly, we are seeing a lot of buyers focusing on homes in the $300k-500k range given the current mortgage rate market. Home affordability has been a central issue and as rates quickly rose last year, buyers couldn’t purchase as much “house for the money” as they could in early 2022. Over 47% of residential sales on the island in 2023 have been for less than $500k. That is helping to keep the median sales price number down versus 2022, when 37% of residential sales were less than $500k.

On to the March Outer Banks Association of Realtors report.

Inventory is still low

If you look at total residential inventory on the entire Outer Banks, you can see that the little green bar for March 2023 is at 356, while the big red bar for March 2020 is all the way up to over 1,300. That was a “normal” inventory level before Covid, and that’s what we would need to get back to in order to relieve this upward pressure on prices due to lack of supply. As of this writing, there are only 74 residential properties for sale on Hatteras Island.

Hatteras Island real estate sees a slight bump

Activity has started to pick up after a low point in January. It’s still very low sales volume but I’m sure there are some folks who read an article lately and really decided to investigate real estate on the island. Median sales price as of this OBAR report was $503,000 but as of 4/19/2023 the median sales price on Hatteras Island YTD is moving higher. Still not at 2022 levels, but again, many buyers are really focusing on affordability with mortgage rates still averaging 6.7% on a 30-year according to Mortgage News Daily.

They aren’t making any more land

Median sales price on vacant lots continues to climb, and as you can see on the chart land sales really took off in mid-2021. But prices continue to rise, and as of today there are 73 residential lots for sale on Hatteras Island – almost identical to the active residential inventory level. With so much of the area being owned by government agencies and a dwindling supply of buildable lots, I think there’s a lot to be said for owning your “slice” of the beach!

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 bring on the Cobia!

Based on information from the Outer Banks Association of REALTORS® MLS.

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://mailchi.mp/43cd4a4bf1a6/obxnewsletter.