Hatteras Island Real Estate Blog

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.

• This winter (January to March), a large section of Route 12 on Ocracoke will be closed while the bridges north of the village are replaced. During this time vehicles will be routed along the beach. At first, this may seem like a major inconvenience, but when you think about it, it sounds like one of those times that we will be able to tell our children and grandchildren, “I remember when the road on Ocracoke was closed, and we had to drive on the beach to get to the village!”

• When we travel to Hatteras Island from the north, we all use Route 158/168, and some use Route 13/113 along Virginia’s eastern shore. These are two extremely dangerous highways that experience a large number of fatal auto crashes each year. In many cases, the accidents are caused by vehicles crossing over the center line into oncoming traffic.  Our sense is that some of the drivers are falling asleep after driving all night to get to the Outer Banks. Please be especially careful whenever you are on either of these highways.

• If you would like to see the traffic conditions at various points along the way to Hatteras Island, the North Carolina Department of Transportation has 17 web cams along the highways in Dare and Currituck counties. These are in addition to the web cams on Hatteras Island. To view these web cams, go to  http://apps.dot.state.nc.us/tims/ for the off-island cameras and to http://www.darenc.com/webcam/  to see the cameras at the S-Curves in Rodanthe and just outside Hatteras Village.

• Finally, our suspicions that there were more visitors on the island this year were confirmed by an article in the Virginian-Pilot newspaper that reported that the Hatteras/Ocracoke ferry has carried 8,000 more vehicles this year than at the same time last year. We suspect that media reports noting that Ocracoke Island is the best beach in America have something to do with this surge. High gas prices have also been cited as a possible cause.

After some encouraging signs late last year, it was frustrating to see the Hatteras Island real estate market showing signs of further softening in the first quarter of 2007. Residential sales were down 13.5 percent, and unimproved lot sales declined 70.0 percent compared to the first three months of 2006. When all categories of properties are taken into account, total sales were off about 30 percent.

The Hatteras Island Pending Home Sales Index, an indicator of anticipated closings 45 to 60 days in the future, has steadily declined since last November.  The index is showing that current levels of residential contract activity are about 38 percent of the average level experienced in 2001, the first of the recent boom years. The index suggests that sales will be subdued for at least the next two months.

The supply of properties continues to exceed demand by a wide margin.  There is currently a 3.1 year supply of homes for sale on the island. The supply/demand relativity for unimproved lots is even more out of balance.  Presently, there is a 6.5 year supply of home sites for sale on Hatteras Island. There were only 6 lot sold on the entire island during the first quarter of this year!

As supply continues to exceed demand, the quarterly median selling price of residential properties has declined 35 percent from $645,000 in June 2005 to $419,000 for the first quarter of 2007. In contrast to 2006 when residential sales in the $400,000 to $500,000 range dominated sales, during the first quarter of this year, home sales in the $200,000 to $300,000 price range were most prevalent. Lot sale prices ranged from $125,000 to $220,000, indicating buyer preferences for the lowest priced properties. By contrast, during the first quarter of 2006, there were 20 sales with half priced over $300,000.

Geographically, first quarter residential sales were concentrated at the north and south ends of the island.  It is very interesting to note that oceanside properties in Waves, Salvo, Avon and Frisco were in least demand.  Oceanside properties usually represent the highest demand locations.

Over the Easter holiday, it was heartening to see an increased number of prospective buyers looking at properties.  We continue to anticipate improved market conditions later in the year, but we believe that the psychological boost of a reduction in the federal funds rate will probably be a key ingredient to the timing of any significant change in the direction of the real estate market on Hatteras Island.

After taking all of the statistics and observations into consideration, we think that it would be reasonable to conclude that the real estate market on Hatteras Island is still in the process of adjustment from the boom years, although we are seeing some positive signs that 2007 may be a better year than 2006 for both buyers and sellers.  The increased number of buyers looking at property is good news for sellers, especially those who have recognized that buyers are value-shopping, searching for the homes that are the most attractively priced and in the best condition.

Bottom line – It’s a great time to be a buyer on Hatteras Island!

Did you know that part of a major Hollywood movie is going to be filmed on Hatteras Island?  “Nights in Rodanthe”, based on a novel of the same name by Nicholas Sparks is scheduled to start shooting on May 9^th.  Richard Gere and Diane Lane will be the stars of the film.  Even more exciting, if you are on the island and would like to try out for a part, a casting call will be held at the Lost Colony building at Fort Raleigh in Manteo on May 4^th from 1 p.m. to 5 p.m. and again on May 5^th from 9 a.m. to 1 p.m.  Reportedly, as many as 400 locals may be selected for a scene depicting an oyster roast or a crab picking. There may actually be some speaking roles!

According to The Virginian-Pilot newspaper, “the story is about a divorced middle-age mother who meets a retired doctor and falls in love while visiting Rodanthe.” Scenes are scheduled to be shot in Manns Harbor, Manteo, Ocracoke, Rodanthe, the Chicamacomico Life-Saving Station, the ferry dock, and the Rodanthe pier.

In our opinion and in the opinion of others, not only will the movie be fun, but it has the potential to create an awareness of Hatteras Island and its natural beauty.

Who knows, we may see you on the silver screen!