Hatteras Island Real Estate Blog

• A little over 13 percent of all mortgages are classified as sub-prime by the Mortgage Bankers Association. About 11 percent of the sub-prime loans are more than 90 days past due or are in the process of foreclosure. This means that roughly 89 percent of the sub-prime category of loans are being paid on time or are less than 90 days delinquent.

• Looking at the broader mortgage market, the Mortgage Bankers Association recently reported that the delinquency rate for all outstanding loans during the 3^rd Quarter of this year was 5.59 percent. Loans in the process of foreclosure added another 1.69 percent for a total of 7.28 percent. In other words, 92.7 percent of all mortgage loans were not delinquent or in the process of foreclosure.

• As a point of reference, at the end of September, only 29 out of an estimated 8,600 privately owned real estate parcels on Hatteras Island were in foreclosure – about three-tenths of one percent.

• Foreclosure problems are most pronounced in seven states – California, Florida, Nevada, Arizona, Michigan, Ohio and Indiana.  The foreclosure troubles appear to be greatest in states that had the highest levels of speculative activity during the boom years and those in the Midwest with significant unemployment related issues.

• The relativities associated with the mortgage market issues also need to be appreciated. According to the Mortgage Bankers Association, “While subprime ARM delinquencies and foreclosures are climbing in all states, in most states the actual number of loans involved is fairly modest. For example, the number of subprime ARM foreclosure starts in California during the third quarter equaled the starts in 35 other states combined.”

• According to the U.S. Census Bureau’s 2005 housing survey, there were 74,931,000 occupied residential units in the country. One-third of these properties (24,776,000) were owned free and clear with no mortgage debt.

• With regard to the second home market, a survey conducted earlier this year by the National Association of Realtors estimated that 25 to 30 percent of vacation and investment properties did not have any mortgage debt.

Analyzing real estate market statistics is often like looking at the ocean after a storm. There are a lot of cross-currents, and rarely do all of the indicators point in the same direction. This seems to be the situation in the market today. 

• The statement that the market appears to be stabilizing means that while market statistics still reflect a decrease relative to the same periods last year, the rate of decline seems to be slowing.

• The supply of residential properties and unimproved lots continues to exceed buyer demand by a wide margin, subjecting prices to ongoing downward pressure.

• There are huge unknowns in the broader economic environment that could affect future results here on the island including – the threat of recession, increasing losses and dislocations in the mortgage market, an energy crisis precipitated by rising oil prices or supply disruptions in the Middle East, and slowing foreign economies.

Over the past few months, a variety of very interesting and important issues concerning Hatteras Island have been at the forefront of our local headlines.  Some have been resolved, and others will probably be with us for the foreseeable future.  Here is a summary:

• Hurricane Noel passed well east of Hatteras Island earlier this month.  We experienced strong winds but no significant damage.  The main impacts were that Highway 12 at the north end of Rodanthe was closed for a while, and the power was out for about three hours.  Everyone breathed a sigh of relief that the island made it through another season without a major storm.  If you would like to see some incredible kite surfing videos go to - http://www.youtube.com/watch?v=ajQrWFVqxz0

• You may recall the anxiety that arose earlier this year when a federal judge ruled that because the National Park Service did not have an off-road vehicle plan, there was no legal basis for allowing anyone to drive on the beach.  The National Park Service, which has been working on the necessary plan for some time, took no subsequent action to prevent or restrict beach driving except in areas where endangered species were nesting. The pace of progress was apparently not swift enough for some environmental groups, and the Southern Environmental Law Center (SELC) filed a suit in Federal Court on September 18^th, claiming that the National Park Service was not meeting its legal responsibilities to develop a beach driving management plan, and it was not doing enough to protect endangered species.  The director of the SELC indicated that the groups involved in the lawsuit would not seek an injunction preventing beach driving “at this time”.  Most recently, the Dare County Board Of Commissioners took action to be a party in the lawsuit. Driving on the beach has not been impacted, except for limited area closures, although a cloud of concern continues to hover over this important aspect of Hatteras Island’s unique appeal.

• On Ocracoke, the North Carolina Department of Transportation (NCDOT) is getting ready to replace the seven bridges on Highway 12.  Between January 2^nd and March 15^th, a portion of Highway 12 will be closed to traffic.  Reportedly, only four-wheel drive vehicles will be permitted to use the 3 mile beach detour around the construction area.  Other vehicles will be expected to use the Swan Quarter and Cedar Island Ferries to get to and from Ocracoke.

• Discussions and meetings are still being held regarding the replacement of the Bonner Bridge over Oregon Inlet.  The NCDOT has stated that with the proper repairs, the existing bridge should last another ten years.  It appears that the “short bridge” alternative will be the favored option.  Under this choice a new bridge would be built parallel to the Bonner Bridge.  If the parties involved in the protracted negotiations can reach agreement, bids could be solicited in early 2009 with the completion of construction possible in 2013.

• A Wings store is planned for Avon.  The store will be located on an unimproved lot north of the Avon stop light between the Subway and the mobile home community across from the Ocean Isle subdivision. Since the property is relatively narrow, the exposure on Highway 12 may be less than the frontage that characterizes most of these stores. 

• Hatteras Island now has an online newspaper – the Island Free Press. We encourage you to visit the Island Free press web site at – http://www.islandfreepress.com where you can sign up for automatic e-mail notification when new articles are posted.  We are certain that you will enjoy the wide range of content including, Local & Community News, Island History, Fishing, Real Estate & Business, Life & Lifestyles, Special Features, and Links.  We will be writing the main real estate articles for the site.  The Island Free Press fills a long-standing void in reporting news and events concerning the island, and we are pleased to be a part of this exciting new venture.

Please contact us at hranicka@hatterasisland.com if there are  any topics or issues that you would like us to research or analyze.

The recent tragedy in Minnesota has served to focus renewed attention and generated an increased sense of urgency concerning the need to replace the bridge over Oregon Inlet.  As you know, the Bonner Bridge is Hatteras Island’s only non-ferry, land link to get on and off the island. Here is a brief summary of the situation.

• The Bonner Bridge is about 44 years old.
• On a scale of 0 to 100, with 0 being the worst, the bridge has a sufficiency rating of 2!
• The state of North Carolina has scheduled $40 million in repairs over the next two years.
• State officials say that despite its low rating, the bridge is safe, and with the proper maintenance and repairs, it should last another 10 years.
• Meetings and deliberations concerning construction of the new bridge have been going on for nearly 17 years without a decision authorizing the start of construction being reached.

Hatteras Island’s county commissioner, Allen Burrus, recently gave a very eloquent summary of islander’s feelings and the facts about the bridge situation.  We recommend that you view Allen’s presentation on a YouTube video at - http://www.youtube.com/watch?v=q4SEQKYRR6c

If you would like to learn more about the issues and the status of efforts to get construction started on the new bridge, please visit - http://www.replacethebridgenow.com/

Any help that you might be able to give to support this vital project would be greatly appreciated.

A variety of issues concerning driving on Hatteras Island beaches and a surprise ruling by a U.S. District judge have taken center stage in local news reports during the past week.

There are three main topics that are the focal points of the discussions:

• On Friday, July 13^th, a new interim protected management plan for the Cape Hatteras National Seashore was completed.  The plan identifies the Park Service’s strategy for managing piping plovers and other protected species. The piping plover is a species of shore bird that is protected under the Endangered Species Act.  As we understand it, the management plan contains a proposed critical habitat designation for piping plover wintering areas that could result in the closure to beach driving during certain times of the year of areas at the south end of Bodie Island at Oregon Inlet, at Cape Point, at Hatteras Inlet, and in areas on Ocracoke Island.  Several groups that are advocates of recreational beach driving have lobbied for the Cape Hatteras National seashore to be exempt from the proposed critical habitat designation. Public comments on the proposal can be made through the end of July. For further information on the plan and to submit comments, please go to - http://www.fws.gov/nc-es/piplch/piplch.html

• In a separate action a few days later, the National Park Service temporarily closed the spit at the southern end of Bodie Island to off-road vehicular traffic in order to protect piping plover chicks that have recently hatched.  Simultaneously, the Park Service opened an additional half mile beach north of Oregon Inlet to compensate for the closure. The temporary closure is expected to last about a month.

• On Tuesday, July 17^th, while hearing a case involving reckless driving on the beach near Oregon Inlet, U.S. District Court Judge Terrence Boyle observed that the Cape Hatteras National Seashore “does not have regulations in place to govern ORV (off-road vehicle) traffic.” The judge’s order indicated that, in the absence of an off-road vehicle management plan and specific authority from the Department of the interior or its designee, it was a violation for anyone to be driving on the beach!  It remains to be seen how the National Park Service will ultimately respond to the judge’s ruling. For now, the Park Service appears to be taking the position that the order is not an injunction against beach driving, and tickets will not be issued for responsible driving on the beach.

Driving on the beach is an important part of Hatteras Island’s attractiveness, and if the beaches were to be closed to off-road vehicle use, it would have a significant impact on the economy of the island.  Our hope and our expectation is that compromise and reason will prevail, resulting in a solution that protects endangered species while allowing acceptable access to the beach for those who want to drive on it.