Outer Banks News (OBN) Newsletter
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Below is The Main Article just written for the OBN 2016-1 Newsletter …
2016-1 Outer Banks News Newsletter … Thumbnail Graphics at the Bottom of Page …
2016 is here … and so is The Outer Banks News!
Exciting News! Market trends are showing improvements! I have had many people tell me in the last year that they actually read my articles with great interest. On that note, I am happy to say that there is good news now and on the horizon for real estate on The Outer Banks. In my prior articles I have laid out a very specific timeline on the Value Cycles in our market over the last 30 years. To quickly recap, our market, based on historical cycles, seems to run on a 15 year peak to peak cycle. If our last peak was in 2005 (which it was) then our next peak should arrive around 2020.
Right now, values remain stable. We are seeing some properties sell for more than one might expect and others for less than one might expect. We have been in this stabilization phase now for about 2 years. I believe 2016 will be year 3 of the stabilization phase. I expect we “may” see some slight growth in values as we slide into 2017. The growth in values will be slight up from where the values are now. I expect that when this happens this will signify the transition of our market from a buyer’s market into a seller market. This transition might not come in like a great whirlwind. It will likely be more of a soft transition.
When this happens several things will also happen. Interest rates will begin to rise (slowly I think) as the Fed will lessen its subsidies of long term mortgage rates. During this time we will (hopefully!) see the last of the short sales and foreclosures. We shall see! Inventory of available properties will begin to shrink slightly. Buyer demand will increase slightly. In my estimation, values will rise slowly in 2017 and 2018, and then we will see a spike as demand peaks in 2019-2020.
During the last 2 down cycles, our second home market experienced an approximate 30-40% reduction in real values from the most recent prior peak. In some market segments it was more than that! In 1990, I sold an Oceanfront Lot in Nags Head for $175,000 … up to that point it was the highest price paid. July 1990 our market died. Values plummeted 40% over the next 5-6 years. Stabilization in values took place 1997, 1998, and in mid 1999 values tightened and the market shifted from a buyer market to a seller market. Values climbed modestly in years 2000, 2001, 2002 and then took off in 2003 through 2005. July 2005 the market died again signifying the beginning of our most recent recession. That same lot that sold for $175,000 in 1990 would have brought neighborhood $120,000 in 1995. In 2005 that same lot would have brought $800,000. That $800,000 lot in 2005 today or in recent 2-3 years would have brought neighborhood $500,000. So, what do you think that $500,000 lot will bring on say 2020? I make no specific predictions, but expect we will see values surpass our last peak market values! I can’t tell you how many clients I have worked with over the recent years who have scoffed at this as even a possibility. I guess time will tell!
We are a second home market. There are plenty of folks out there with money who love the beach. So, when the stock market starts to waffle, which it is now doing (as I have previously
predicted in prior OBN articles it would) folks will begin to take their money out of that investment vehicle and put it into real estate. This will trigger stronger demand for real estate which will stimulate values and as values increase this will fuel even greater demand. People want to invest in something that is growing in value. Our market is driven by want and not need. Really, who “needs” a place at the beach? But there is great want, especially in a growth cycle, and this is what fuels supply and demand.
If someone is thinking of selling … I have had a large number of folks contact me in the past year to discuss the sale of their property. Many are past clients, and many are new clients. New clients seek me out having seen my Billboards, Website, Advertisements, Sale Signs, and have read my Client Testimonials or visited my YouTube Channel. Many also come to me via word of mouth recommendations from past clients. Those considering selling their property contact me to ask me to provide them with an idea as to their OBX property’s current market value. I provide this at no charge and no obligation, and I am glad to do so. This most often results in that new client deciding to move forward with the sale of their property.
Should I sell now? If someone is casually thinking of selling, but can easily wait a year or more, and doesn’t really have to sell … I say wait. The market will be improving (slowly), I do believe. Once I have a file set up after having provided a Five Star Marketing Overview, it takes just minutes to provide subsequent updates on a property. I have some clients who check in with me every six months for an update. If a seller plans to purchase another property (here or somewhere else) after they sell their OBX property, I say don’t wait – go for it. It’s a lateral move – so if the market improves here it will likely be improving in whatever other market the new property is located.
Whether you are thinking of selling or purchasing, there is a great tool available to you that you need to know about! It is called the Automated Email Notification Program. I can set this up direct within our MLS system to send you Active and/or Sold Properties so you can stay abreast of Market Activity. This information is the most up to date information you will find – far surpassing Zillow, Realtor.com and any other third party internet site. This takes me just minutes to set up. I have hundreds of property owners thinking of selling and folks thinking about purchasing receiving these Auto Emails. If this is of interest let me know … call, text, or send me an email.
If someone is thinking of purchasing – this is the time! Rates are still great! Values are fantastic! Selection is excellent! We are experiencing a Trifecta in OBX Real Estate that will not last.
When Captain James T. Kirk of the Starship Enterprise asks Mr. Scott for more power, Scotty has to deliver! Well, the OBX Real Estate Market has been pretty tough these past 8 long years, but I do expect it to deliver some excitement in the coming years, although it may not be at light speed as we would all love to see! Stay abreast of the market and be current on trends.
If you want to know where your property’s value fits into the market, call, text, or send me an email. I will be glad to provide you with an idea as to your property’s market value at no obligation and grateful to do so. Likewise, if you are considering purchasing, reach out to me and I will respond, and will be glad to answer any and all questions at no obligation. I like to make all things informative and as easy as possible.
Update on the Bridges … I recently attended a meeting in which our Dare County NC Department of Transportation Representative Malcolm Fearing, and our local NCDOT District Engineer, gave a comprehensive overview of projects affecting Dare and Currituck County. Are you ready … believe it or not, NCDOT is stating that is has fully funded the construction of the new Currituck Mid-County Bridge in Corolla and has closed on the purchase of a land parcel which will be the east bridge landing area! This project is set to go with a start date in 2017! This will be a toll bridge. I still say that until I see the pilings going into the Sound I won’t believe it! But this information seems very solid! The other major project will be the replacement of the Oregon Inlet Bonner Bridge. A new Bridge will be built parallel to the existing bridge and once completed the old bridge will be taken down – except for a short span which will be left at the south end for walking & fishing. We may see movement on this project in 2016! In total, NCDOT has committed to Outer Banks projects totaling an approximate whopping $750 Million. These changes will bring much new activity to our area … Currituck & Dare County are about to take it to the next level!
Beach Nourishment … There are beach nourishments projects in the final planning stages for Duck, Kitty Hawk & Kill Devil Hills. Visit the Town Website for updates: TownOfDuck.com, TownofKittyHawk.org, and KDHNC.com.
There is much more to tell you, but I couldn’t fit it all in!
May the Year of 2016 bring you many Blessings!
Life is Amazing and Wonderful, and a Gift … Especially at the Beach!
God Bless, John