By Russ Lay on November 19, 2012
Summer is usually a slow period on the Outer Banks, unlike other areas where sales pickup as people change locations while school is out.
The bulk of the area’s sales are rental homes. Those tend to sell during the fall and winter when they are vacant for showing. Owners typically like to collect summer rents before selling an investment house.
According to the OBAR summary, total sales year-to-date through October were up 21 percent over the same time period in 2011 — 1,733 units vs. 1,429 units.
Residential sales increased 16 percent, 1,344 units vs. 1,157; land was up 48 percent, 368 units vs. 248); while commercial was basically flat , 21 units vs. 24 in 2011.
The year-to-date increases for properties under contract were even more dramatic. Overall, 1,913 units were under contract by the end of October, a 22 percent increase over 2011.
Residential units under contract increased 20 percent, while lots under contract were up 40 percent.
The most active price range continues to be residential properties from $200,000 to $299,000, with 372 units sold with an average marketing time of 207 days.
In spite of reports on the difficulty for borrowers finding loans for high-priced investment properties, 249 priced $500,000 and over have sold so far in 2012, including 50 with price tags over $1 million.
Foreclosure filings appear to be dropping. Likewise, distressed property sales as a percentage of total sales comprised only 26 percent of residential sales in October.
The above two figures would be welcome news for the real estate market if the trends continue. Foreclosures add to inventory, and coupled with distressed properties, they exert downward pressure on sales prices.
The average sale price for 2012 is $359,141, a 2 percent decrease over 2011. The average price of land has decreased only 1 percent over 2011, while commercial has experienced a 1 percent increase.
The absorption rate, which is the amount of time it would take to sell all inventory at the current pace of sales, is down to just over 58 weeks. In January 2009 that figure stood at a disturbing 241 weeks.
For those sitting on the sidelines waiting for further price reductions, the foreclosure and price decline data appear to indicate the market has hit bottom.
Translation: With historically low interest rates, inventory declines and stabilizing prices, this winter may prove the last chance for buyers to close before prices and interest rates begin to climb.
In terms of dollars and cents, the market this year has generated $539.9 million in sales, compared to $468.5 million for the same period in 2011. This marks a 15 percent increase in sales dollars, which means commission increases for local Realtors.
For local residents, the “multiplier effect” of those rising commission salaries helps the entire economy.