OBAR Releases May Real Estate Statistical Report
The Outer Banks Association of REALTORS® (OBAR) has released their May 2022 real estate statistical report. The report highlights year-to-date and month-to-month sale comparisons for residential, commercial, and lot/land properties included in OBAR’s Multiple Listing Service (MLS).
The report shows 2022 year-to-date sales for all property in the MLS has declined slightly for the last three months and year-to-date sales are down 19% when compared to May of 2021. However, when compared to April 2022, they are up. Residential median sale prices have also risen 26% to $606,250 and is also over 8% higher than April 2022. Lots/land property sales is up 2%, and commercial property sales is up 74% when compared to this time last year.
In Dare County there has been an increase in new builds. Year-to-date, 140 building permits for residential properties have been issued in Dare County compared to 122 in May of 2021. According to Tammy Aycock, Principal Broker with Saga Realty & Construction, “Lot sales are increasing along with building permits being issued which is reflective of the lower inventory of existing homes, so the “decline” is not truly a “decline”. Buyers are choosing to move in an alternative direction because there are limited options of existing homes available to purchase.” Aycock continues, “We have noticed an uptick in our new construction contracts this year versus last year due to the continual lack of inventory.” Currituck County information is included in the report.
On the vacation rental front, OBAR President Doug Brindley of Brindley Beach Vacation and Sales said, “Occupancy in May was down about 25% compared to May 2021.” However according to Brindley, “June through August is as full as it was last year”. He continues by wishing fellow property managers, “Happy summer—only 81 days left till Labor Day”.
Town to Town Comparison
Southern Shores was the only town that had an increase in residential units sold. The 6% increase was the equivalent of only 3 more units sold when compared to May of 2021. However, when compared to April 2022, 16 more units were sold in May.
Since February 2022 Duck has had the highest median sales price. When compared to the same time last year, Duck’s median sales price increased 41% to $915,000. That is a difference of $265,000. In addition, the median sales price increased $17,500 compared to April 2022.
Overall residential days on market dropped to 37 from 66 when compared to the same time last year. Once again, Kitty Hawk had the lowest number of days on market at 24.
While there may appear to be a slight decline in real estate sales; When looking at 2022, sales and median sales price have increased. We are still in a hot real estate market! Says Mike Siers of Howard Hanna OBX, “I believe the numbers for the fourth consecutive month are reflecting the early shift in the market. With low inventory being the draw, if I was going to sell, I would do it today to take advantage of the high demand and low supply. Once the interest rates rise, the buyer pool will be reduced, but there will still be buying opportunities for the meticulous buyer. And there are several on the market now that are a good value for the buyer!”
The real estate industry and agents are always the last to know when the gig is up. Interest rates and an unnerving economy will put an end to the nonsense of the last 2 years. Buyers are/were throwing crazy money at crap properties. I am sure I will hear a few more, “but it is different this time” even though it never is. The easy money is gone and only dedicated full-time agents will make it to the next boom cycle.
The most obvious sign of rough waters ahead is the price of building materials which have been steadily declining since the beginning of the year. Product availability has increased dramatically as well. We will also see the majority of those who relocated because of work flexibility during COVID leave the area because they are told to return to the office, which they will be as the economy unravels and there are more people than jobs limiting their option to say no. If that does not push them out then a good old gloomy and cold winter will. Throw in $5/gallon gas, ever increasing food prices, and a declining stock market and a vacation home does not have the same appeal. Patience will pay off for those who stick it out or never got in.
The suckers are those who have rushed to purchase and succeeded in purchasing any of the overpriced homes still available since March when interest rates started rising. This phenomena is commonly known as FOMO.
You are dead on. My wife and I have been watching OBX real estate for over a decade with plans on purchasing a home when we retire. We were priced out of the market last year – of the homes we were interested in – but know the bubble is about to burst. Patience will win like it always does. I have to say, “but it is different this time”. The previous downturns were not like this one. The Russo-Ukraine War, we can’t influence this or profit from it. Runaway inflation, rising interest rates, and $5 gas as you mentioned are all huge problems. Throw in a president even less popular than Trump ever was, I think we are headed towards a serious recession. I hope I’m wrong.
My meaning of “but it is different this time” is nonspecific. To the real estate agents it is their way of convincing themselves a downturn is not coming even though a mix of the same factors that lead to prior downturns is present: irrational exuberance, overpriced housing (entry point to high for those seeking a starter home and same for those wanting to move up), interest rates, inflation, geo-political issues, energy, general uneasiness, recession, etc. We are on the same page. Patience will get you a nice house.
I disagree that the bubble is about to burst.
Take one look at all of the New York and New Jersey license plates on the OBX and take a look at Jersey shore real estate prices. OBX real estate prices are still today a tremendous bargain by comparison. These prices may experience a slight decline (10 to 20%) if there is a recession, but the days of cheap OBX real estate are over. The place has been widely discovered, unfortunately.
I have guests renting my cottage from California and Colorado this year. The Netflix show Outer Banks, although not even filmed here, has also increased the popularity of OBX. People come into OBX shops and ask directions to locations shown in the Netflix show. The show wasn’t filmed in NC due to NC’s bill to require transgender folks to use the bathroom of the sex they were assigned at birth (that’s just a side note). Remote work for many is here to stay.
Anyone sitting on the fence for a decade thinking about whether to buy a property should have done it by now. I wish I would have had the foresight to purchase another one between 2015 and 2019.