Hatteras Island Real Estate Blog

As the year progresses, there are very encouraging signs that the real estate market on Hatteras Island may be on the road to recovery.  Consider these market indicators:

• Average selling prices are moving closer to the historical growth curve that we saw prior to the boom years.
• The supply/demand curves are starting to trend slowly toward each other after being relatively flat and far apart for the past few years. If present trends continue, it looks like the market will be back in balance again in about two to three years.  This projection tracks closely with the estimates that are being given by industry leaders.  
• The number of monthly residential sales is starting to show a marginal increase. For the last several years about 10 residential properties have been sold each month on the island. So far this year, the monthly average number of sales has risen to 13.
• The Hatteras Island Pending Home Sales Index, a leading indicator of future sales, has remained above its long term downward trend for the past seven months.

We are not out of the woods by a long shot, and the recovery is anticipated to be gradual vs. a rapid turn around. There are still areas of significant weakness in the market.

• On a cumulative basis, between January and August, the number of foreclosure filings on the island equaled the number of sales of homes and lots.  Foreclosures nationwide are expected to increase through the fall of 2011 as exotic loans that were issued during the days of loose underwriting enter their interest rate reset periods. The magnitude of interest rate resets for No Documentation and Option ARM loans has the potential to create a second wave of foreclosures that could throw any market recovery off track.
• Very challenging financing conditions still persist for some segments of the market.  While loans are readily available to qualified buyers for loan amounts of $417,000 or less, financing is still tight, and underwriting requirements are still rigorous for higher priced residential properties and for unimproved lots. This year, only 6 homes have been sold with selling prices of $700,000 and above, and just 18 unimproved lots have been sold on the entire island.
• The presence of foreclosed properties and short sales, as well as the continuing gap between the supply of properties and the corresponding buyer demand, can be expected to keep pressure on the selling prices of both houses and lots.

For sellers of properties on Hatteras Island, the most important watchword in today’s market is “price.”  If you price your home or lot competitively, you stand a much better chance of selling it than if you hold on to unrealistic or outdated perceptions of value. For buyers, now is the time for action.  We are either at or very near the bottom of the current market cycle. There is a wide selection of properties from which to choose. Prices have significantly declined from the levels that existed during the height of the boom years, and interest rates continue to remain near historically low levels.

This entry was posted on Monday, September 28th, 2009 at 12:26 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.