By Catherine Kozak on November 14, 2011
Economic numbers released by The Outer Banks Chamber of Commerce offer little solace to Dare County residents and business owners, although there are signs that construction and visitation are rebounding.
Occupancy rates — a measure of how many motel rooms, campgrounds and rental cottages are filled by visitors — showed healthy growth on the entire Outer Banks in July, but August and September figures reflect steep drops in visitation because of Hurricane Irene.
The storm hit the barrier islands in late August and cut the highway on Hatteras Island. It was reopened last month.
“It was really knocking the door down this year until, of course, that storm hit,” said Chamber President John Bone. “We would have had a huge year.”
Buxton, Waves and Avon saw a 48.88 percent decline in September occupancy rates over 2010.
Despite such precipitous drops, the September occupancy rate overall was up 5 percent, thanks to considerable spikes over last year in rates in Kitty Hawk, 101.20 percent; Manteo, 37.46 percent; and Southern Shores, 14.48 percent. Not surprisingly, Outer Banks campgrounds suffered the biggest loss from the previous year, with a drop of 104.16 percent in tax collections.
“That storm, obviously, had a big impact on this community,” Bone said. “That last weekend of August — that’s a pretty nice weekend normally. We lost that whole weekend. We lost a lot of weddings.”
But Bone found it encouraging that more people are again booking ahead of time, rather than waiting until the last minute.Occupancy numbers reflect taxes paid on fees for accommodations, often paid in advance, Bone said. Which means the amount of taxes collected may not have matched the amount of people here. Many may have stayed away because of the hurricane and were likely compensated by insurance.
“That’s paid whether they can get here or not,” he said about the tax.
Groceries, transportation and especially housing costs are considerably more here than most of North Carolina, with Dare’s cost of living index in the third quarter of 2011 a full nine points higher than the national average of 100. In comparison, Charlotte’s index is 92.6, Wilmington ‘s is 99.1 and Raleigh’s is 93.3.
But, dismal as it may sound, Bone said that Dare’s index is a big improvement from when it had hovered around 150 before the boom years in the 1990s.
Unemployment in Dare County is also reflecting a hobbled economy, with seasonally adjusted rates exceeding both state and national averages. In July, Dare had 12 percent of its workforce unemployed, in August it climbed to 12.8 percent, and in September, the last available figure, it soared to 15.3 percent. September unemployment rates in the U.S. were 9.1 percent; in the state, 10.5 percent.Land transfer taxes — an indicator of the number of real estate transactions — although -0.38 percent for the year to date, were up 9.38 percent in September over last year. The bad news, however, is that Bone said that the yet-to-be-published October numbers show a decrease of 21 percent in land transfers. In October 2010, he said, there was 5 percent decline from the previous year.
“The thing about real estate here is, this is a second-home market,” he said. “What are people going to do when the economy is not very strong? They’re probably not going to go out and buy a second home.”
Building permits values are up nearly 32 percent so far in 2011, but retail sales collections are up an anemic 0.32 percent and food and beverage sales are up just 1.33 percent for the year.
Bone said that all the community can do is hold course and wait for the economy to recover, because until real estate and construction bounce back, people will think twice or three times before buying new clothes, going out to eat or treating themselves to local art. And there won’t be any new homes to outfit with furniture, linens, kitchenware and rugs.
But there’s reason to be hopeful, he said. The last two tourist seasons have been strong, and that affects everything in this tourism economy, in a good way. It just might take some time, he said. People visit, they enjoy themselves, they decide to build their own seaside haven.
“That’s the hope we have,” he said. “Eventually, when the market is better, people will want to come here and invest in their vacation home, their retirement home.”