One of the most frequently asked questions we appraisers are asked is, “Is this a good time to buy or sell a home on the Outer Banks?” The real estate market on the Outer Banks is definitely promising, especially compared to where we were just a few short years ago. However, every buyer and seller’s personal situations are different. Therefore, the answer to whether it’s a good time to buy or sell can be quite complex. Here’s what you need to know if you’re considering buying or selling a home on the Outer Banks right now.
The Outer Banks Real Estate Market is Promising
In mid-2006, the national economy had plummeted sharply, along with Outer Banks home values, at an equally alarming rate. Many homeowners and real estate investors had become “upside down” in their loan debt versus property value ratios, making their ability to sell their homes almost impossible. But recently, many Outer Banks areas’ values appear to have stabilized, and some areas are beginning to increase in value. This is due to the continuing low federally-regulated interest rates, less numbers of short sale and foreclosure sale competition in the market, and more people holding on to their homes until their loan debt versus property value ratios were more equal.
Summary of the Current Outer Banks Real Estate Market
For a better understanding of the current status of the Outer Banks real estate market, consider the following important indicators.
- Average Sale Price – In Currituck and Dare Counties, in the year 2013, the Average Sale Price of all residential single-family detached homes (not condos, townhomes or multi-family homes) sold through the Outer Banks Association of REALTORS® (OBAR) was $391,326.
- Average Number of Days on the Market – The average days of Exposure Time (better known to laypersons as “days on market”) was 223 days.
- Average List Price vs. Sale Price – The average List Price versus Sale Price ratio was 93.77%. This means that sellers lowered the prices of their homes by an average of 6.23% from the price at which they listed their properties for sale at the beginning of the sale process.
- Stability in the Market – Of the 2,178 homes listed in 2013, 1,223 homes sold, 549 homes’ listings expired, and 406 homes either re-listed later or withdrew their listings. These statistics are very similar to the 2012 year’s statistics showing somewhat more “stability” in the market.
- New Construction – As of March 2014 there were 178,700 more construction jobs in North Carolina compared to March of 2013 (Source: BLS). In the South (the states of Delaware, Maryland, District of Columbia, Virginia, West Virginia, North & South Carolina, Georgia, Florida, Kentucky, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Oklahoma, and Texas) there was 464,000 new home starts in 2013, compared to 398,000, 308,000, 297,000, and 278,000 new home starts in the years 2012, 2011, 2010 and 2009, respectively (Source: NAHB). These definitely are positive indicators for housing.
Is it a Good Time to Buy in the Outer Banks?
Many times, the first question to honestly ask oneself is, “Can I really afford to buy or sell?” If you have decent-to-good or excellent credit, pay your bills on time, and have experienced job stability over the last two to three years, then now may be a good time for you to consider buying a home. However, if you have a mediocre-to-poor credit rating, excessive bills, pay your bills late often, or have recently switched employment in the last two to three years, right now may not be the best time for you to buy. Lenders are stricter now, more than ever, when it comes to qualifying for a loan, and even small financial mistakes can mean big problems at the bank. Continue to work with your creditors to make things right, clear as much of your debt as possible, and absolutely, check your credit report for errors.
Is it a Good Time to Sell in the Outer Banks?
If you have equity in your home (meaning you are not “upside down”) and have no major repair or damage issues, then the answer may be “yes”. However, if you want to sell and you are still excessively “upside down” in respect to your loan debt to property value ratio, or you have a home in need of excessive repairs or one that has damage, the answer to selling your home right now may be a “no”. Speak to your lender about the possibility of a short sale of your home. A short sale occurs when a lender agrees to accept a sale price that is less than the amount of debt you owe on your loan. Just remember, you have to pay taxes (sometimes Federal and State) on the difference between what you owe and what they are willing to take to cancel the debt. You will receive an IRS form 1099-C for that difference and it gets counted as income on your next tax return. Always consult with a lawyer or tax professional before you enter into a short sale agreement with your lender.
We had a long, cold winter on the Outer Banks with many days of foul weather and precipitation, which slowed most all construction. However, it looks like Mother Nature is beginning to smile down upon our area with warmer temperatures and bright sunny days. Beach traffic is stepping up, along with the number of visitors we encourage to come and enjoy our area, and many times, our visitors come year after year. So you ask, “Is this a good time to buy or sell a home on the Outer Banks?” . . . if you can answer “yes” to “Can I really afford to buy or sell?” the answer is an unequivocal “YES”, and when you do, seek the advice and services of local REALTORS® and local Real Estate Appraisers to help you with the process. Who knows the market better?
[Statistical and Informational Sources: Outer Banks Association of REALTORS® Multiple Listing Service (OBAR), U.S. Bureau of Labor and Statistics (BLS), National Association of Home Builders (NAHB).]
Photo image credit: Steven W. Craddock, CDA, HMS of AppraiseNC4U, Inc.