What’s Happening in the Outer Banks Real Estate Market?
After two incredible years for real estate in the Outer Banks, North Carolina, we have been staying ahead of the shifts. We have experienced a market like never before and possibly never to be duplicated. Values increased monthly, with many homes going above the asking price within hours.
In the Outer Banks, home values in some areas have increased by 48% or more. We have set records for sales volume and obx home sales.
We started the 2022 year on pace to achieve this once again. Our housing inventory started to grow in February. The overall days that homes spent on-market decreased due to a lower housing inventory. However, this second part of the year, inventory in beach realty has started to creep back up.
The average home prices are leveling off – some believe to reflect the new bottom to the Outer Banks market.
Outer Banks Market Summary
The Outer Banks is a destination location driven by tourism. A majority of the homes are vacation or investment homes. Many are NC condos. These homes require a strong buyer with usually 20-25% down. That is big in this market.
In the previous real estate boom, money was easily borrowed – in some cases to underqualified borrowers. Recently we’ve seen, however, the borrower was overqualified. We experienced higher than 10% cash purchases overall. Those factors show that the market is solid, and a burst is not expected.
In the Corolla area to the Outer Banks, some refer to this as the Northern Beaches; we have experienced the most turnover in 20 years. The new buyers of these homes are also spending money on remodeling. The building permits over the last six months in that area are mind-boggling. The result will be massive in rentals and sales of those homes over the next few years.
New construction overall has been steady over the last six months. With new subdivisions in Corolla and Kill Devil Hills leading the way. Lot prices are still relatively low for the market. Building can sometimes give you what you want without remodeling an older home.
What happened in the first half of 2022?
In the first half, we see that interest rates, uncertainty in the stock market, and buyer burnout have slowed buyer activity at some price points. We still have inventory, and new properties are coming on the market daily.
This should be a good time for a buyer to return to the market. There are fewer buyers aggressively looking and more homes to choose from. Interest rates are indeed up from an all-time low but are still below the average.
What are the predictions for the last quarter of 2022?
Moving on to the last few months of 2022. We predict the number of listings will continue to rise with the lack of aggressive buyers in the market. It is likely that interest rates are going up another .75% or more this year as the Fed battles inflation.
There isn’t any real indication that we will switch to an actual buyers’ market in the next few months. However, we do feel there will be some great buying opportunities as we move forward. Knowledge of the market is key to finding bargains.
As a buyer looking for a home, working with a full-time professional real estate agent can save you money, time, and stress. They should be knowledgeable about the area you are looking at, spending most of their time in that area – especially on the Outer Banks. The agent here can tell you what you won’t find on the internet or hear from someone who doesn’t live there. Flood zones and risk are more accurate.
Is Selling in the Outer Banks a good idea in 2023?
This is still an excellent time for a seller with realistic expectations. The days of overpricing your house and getting multiple offers are gone. The key to selling for the most today is knowledge of the market and saturation rate for the area that you are selling.
In our market, the online sites give you an estimate based on traditional square miles. The Outer Banks is not a conventional market, nor is it square. Many variables play a role in the market price.
Moving forward, the starting price will determine the final sale price. The market we are leaving has allowed liberal pricing and taught buyers not to make offers. Moving forward, sellers will have to look at offers and be prepared to counter offers. The better the pricing in the market, the less they will have to negotiate. We feel that a house priced right will sell for the asking price moving forward.
To summarize, the Outer Banks market will likely remain strong for 2023. Knowledge of the market will play the most significant role, as we are primarily a second home and investment destination. The general US market does not directly reflect our market on the Outer Banks. Use market knowledge to find the best property in this neutral market.
If you are looking to sell a home or talk to someone about homes for sale in the Outer Banks, message a top real estate agent in North Carolina.