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Ilona Matteson's Blog

By Ilona Matteson | Agent in 27927
  • The 2014 Outer Banks Fall Market Forecast

    Posted Under: Market Conditions in Duck, Home Buying in Duck  |  September 4, 2014 4:10 PM  |  57 views  |  No comments

    There are 5 separate aspects to this market analysis/forecast.

    1. Land Sales Data
    2. Home Sales Data
    3. Rental Report
    4. Home Starts Data
    5. Finance Market Data

    The purpose of this report is to provide an accurate accounting of what is currently happening in our local market and based on factual statistics, what is most likely to happen for the remainder of the 2014 calendar year.  While we don’t have a crystal ball with markets, we do have trends.  Those trends can give a fair gauge of what decisions need to be made and when.  Let’s get started!

    *The data below analyzes the difference between January 1, 2013 to August 1, 2013 and the same time frame for 2014. 

    Part 1 – Land Sales Data

    Corolla

    2013                                  2014

    Total Sold –                    69                                        22                         (68% drop)

    Avg Days on Mkt –      273                                     266

    Avg List Price -             $300,000                         $258,000          (14% drop)

    Avg Sold Price -            $272,000                         $250,000          (8% drop)

    Currently Available – 84  (28 month supply)

    Average Price - $223,000

    Duck

    2013                                  2014

    Total Sold –                    4                                          4

    Avg Days on Mkt –      267                                     1010

    Avg List Price -             $370,000                         $349,000          (6% drop)

    Avg Sold Price -            $320,000                         $311,000          (3% drop)

    Currently Available – 27  (47 month supply)

    Average Price $296,000

    Southern Shores

    2013                                  2014

    Total Sold –                    10                                        21                         (52% increase)

    Avg Days on Mkt –      454                                     384

    Avg List Price -             $185,000                         $249,000          (26% increase)

    Avg Sold Price -            $171,000                         $193,000          (11% increase)

    Currently Available – 31  (10 month supply)

    Average Price $181,000

    Southern Beaches (KH, KDH, NH)

    2013                                  2014

    Total Sold –                    50                                        49

    Avg Days on Mkt –      266                                     304

    Avg List Price -             $130,000                         $161,000          (19% increase)

    Avg Sold Price -            $113,000                         $143,000          (21% increase)

    Currently Available – 147  (21 month supply)

    Average Price $290,000  (This includes 7 oceanfront lots for sale over $1,000,000)

    Final Analysis

    • Land is a better value in Corolla
    • Southern Shores has the lowest supply of inventory relative to the number of buyers
    • Duck is the most expensive location with the most supply available
    • Unless your price is super aggressive, you can expect it to take almost a year to sell a vacant lot

    Top Prediction - Land sales will continue to stay low due to the greater availability of larger homes at lower prices (higher end properties cannot be rebuilt new for the same price as an existing home at today’s lower prices).

    Part 2 – Homes Sales Data

    Corolla

    2013                                  2014

    Total Sold –                    107                                     91                         (15% drop)

    Avg Days on Mkt –      261                                     254

    Avg List Price -             $672,000                         $741,000          (9% increase)

    Avg Sold Price -            $627,000                         $698,000          (10% increase)

    List to Sale % -             93%                                   94%

    Currently Available – 360  (28 month supply)

    Average Price - $750,000

    Breakdown of Sold by Price

    Under $350,000           18 (17%)                         14 (15%)

    $351,000 - $500           42 (39%)                         29 (32%)

    $501,000 - $700           21 (20%)                         21 (23%)

    $700,000 - $1M            13 (12%)                         14 (15%)

    $1M – up                          13 (12%)                         13 (15%)

    While it may look like the prices in Corolla are going up, looking at the break down of price you can see that fewer homes sold in the under $350,000 range as well as 30% of homes sold were over $700,000 in 2014.  That was only 24% in 2013.  So more of the higher end homes are selling.

    Duck

    2013                                  2014

    Total Sold –                    60                                        59

    Avg Days on Mkt –      247                                     288

    Avg List Price -             $723,000                         $674,000          (7% drop)

    Avg Sold Price -            $665,000                         $628,000          (6% drop)

    List to Sale % -             92%                                   93%

    Currently Available – 150  (19 month supply)

    Average Price - $706,000

    Breakdown of Sold by Price

    Under $350,000           12 (20%)                         19 (32%)

    $351,000 - $500           17 (28%)                         8   (14%)

    $501,000 - $700           15 (25%)                         11 (19%)

    $700,000 - $1M            9   (15%)                         16 (27%)

    $1M – up                          7   (12%)                         5   (8%)

    While it may look like the prices in Duck are going down, looking at the break down of price you can see that while more homes sold in the under $350,000 range, 3 of them in 2013 were co-ownership (avg price $30,000) and in 2014 there have been 7 co-ownership sales thus far.  This is creating a small skew in the numbers.  There was a noticeable jump in sales of the $700,000 to $1M price range.

    Southern Shores

    2013                                  2014

    Total Sold –                    42                                        59                         (29% increase)

    Avg Days on Mkt –      210                                     194

    Avg List Price -             $577,000                         $555,000          (4% drop)

    Avg Sold Price -            $545,000                         $520,000          (5% drop)

    List to Sale % -             94%                                   94%

    Currently Available – 96  (12 month supply)

    Average Price - $599,000

    Breakdown of Sold by Price

    Under $350,000           12 (29%)                         14 (24%)

    $351,000 - $500           14 (32%)                         24 (41%)

    $501,000 - $700           5   (12%)                         12 (20%)

    $700,000 - $1M            7   (17%)                         6   (10%)

    $1M – up                          4   (10%)                         3   (5%)

    The best news for Southern Shores is that activity has taken a sharp turn upward.  Notice the months of supply is a year or less and the average price is under $600,000.  This time last year, $599,000 was only 12% of the price range selling there.  Today it’s 20%.  This is a location to watch!

    Southern Beaches

    2013                                  2014

    Total Sold –                    322                                     289                      (10% drop)

    Avg Days on Mkt –      211                                     184

    Avg List Price -             $322,000                         $363,000          (11% increase)

    Avg Sold Price -            $302,000                         $348,000          (13% increase)

    List to Sale% -              94%                                   96%

    Currently Available – 538  (13 month supply)

    Average Price - $451,000

    Breakdown of Sold by Price

    Under $350,000           241 (75%)                      208 (72%)

    $351,000 - $500           51 (16%)                         31 (11%)

    $501,000 - $700           16 (5%)                           26 (9%)

    $700,000 - $1M            7   (2%)                            15 (5%)

    $1M – up                          7   (2%)                            9    (3%)

    Same story in the Southern Beaches.  Fewer homes selling under $350,000 and more expensive homes selling.

    Final Analysis –

    • Good news for those higher end sellers.  While your price may still be lower than you want, we have more buyers willing to spend in that price range.
    • All areas have at least a year of inventory going up to as much as over 2 years.
    • Corolla still seems to be the market with the biggest struggles
    • You can expect to sell within 93% to 97% of your asking price, ONCE THE HOME IS PRICED CORRECTLY
    • Average days on market is on average over 200 days which indicates the home goes through multiple price reductions before selling
    • The best strategy is to price the home aggressively from the start to avoid further losses

    Top prediction – inventory levels being so high will continue to stifle prices.  There is still another 3 to 5 years minimum before a rise in prices of any substance can be expected.

    Part 3 – Rental Report 

    The following data comes from a consensus of interviews with multiple property management firms.  I have no hard data to support this information.  It’s based on several interviews conducted.

    • More weeks are 100% sold out this year than last
    • More guests are booking “pre-reservations” for the same home next year upon their departure
    • More guests are waiting until the last minute to book reservations in order to obtain a lower rental rate
    • There is a higher percentage of weeks booked at a discounted rate than in years prior
    • More damage reports are being filed
    • More complaints and overall “difficult people” were mentioned

    Top Prediction – As the population of sites like hotels.com, priceline.com, etc. grows, the trend of seeing more last minute bookings and requests for a discount will rise as well.  Be prepared with your property manager to do an advertised rate and a secondary, discount rate in advance so you don’t loose a booking while the agency is trying to track you down for a decision. 

    Part 4 – Home Starts Data 

    This data is for Dare County only. 

    2013 January to May

    68 new starts

    $17,900,000 volume

    $263,000 average price

    2014 January to May

    78 new starts

    $22,800,000 volume

    $292,000 average price

    It seems that the spike in sales of vacant lots in 2013 is parallel to the spike in new home starts for the first part of this year.  With lot sales being down drastically in 2014 it will be interesting to see the impact on new home starts for the remainder of this year.

    Top Prediction – A number of spec homes were sold in the last 6 months in Kill Devil Hills Westside.  I think we will see more specs built in the lower end price range (under $350,000) as long as builders can continue to buy land under $100,000.  With fewer homes for sale under $350,000, this could be a real winner for investors. 

    Part 5 – Financial Market Data

    The following report is from a local lender, Drew Wright with OnQ Financial.  He can be reached at drew.wright@onqfinancial.com or 252-562.0194.  He is happy to provide info on prequalification to buy or refinancing an existing loan.

    Here on the Outer Banks we defy the rest of the country that typically see sales grow through the spring and into the summer. As is typical, our market slows down in the peak tourist visiting summer season. The reason is pretty simple- it is hard to show a house full of guests who want a week of uninterrupted vacation. Most rental companies and sellers are adamant about not showing a home that is occupied by guests.

    I am optimistic about what we see for our upcoming fall buying season and the biggest time for new construction. Inquiries and prequalification for both purchases and new construction are steady and higher than a year ago. So what can we expect for rates over the next three to four months taking us into 2015?

    First, just one year ago before the Federal Reserve announced they would begin scaling back mortgage backed bond purchases, rates were well below 4%. Closer to 3.50% to 3.75% for 30 year fixed rates. Rates quickly rose to about 4.50% and have pretty much quietly stayed in this range, until recently as they trended lower- closer to 4.25%.

    Most of the experts thought rates would continue to rise for all of 2014 and by most accounts should be higher than 4.50%.  By all accounts rates probably should be headed higher but there are many head winds to rising rates. Yes, the economy disappointed for the first few months but other factors outside of the Federal Reserve control also contributed. Other parts of the world even those with growing economies are scared to death of deflation and as a result are exporting their deflation to us, therefore keeping inflation as measured by the Federal Reserve in check.

    While I do believe the world economy is not as well off as ours, I do think our growth in the second half looks to be impressive with job creation above 200,000 for the next few months.  Also, unemployment claims just last week were below 300,000 for the first time in several years.  This will lead to higher rates by the Federal Reserve in 2015. Credit markets that determine interest rates will not sit idly by waiting for the Federal Reserve to act the and as a result we could be seeing the last rally in rates before they turn upwards closer to 4.50% in the next few months and closer to 5.00% in 2015.

    If you read Fortune Magazine (and the editor’s opinion) Andy Sewer thinks we are in a sweet spot of low inflation and increasing unemployment that will translate into a stronger US economy. He is a fan of the current administration, so personally I think he has an agenda, but his case of a growing economy is not totally unrealistic. Yes if you read the other popular financial magazine, Forbes, things do not looks so rosy.  I sit more in their camp and somewhere in the middle they are both right, which means a better growing economy. I do think we will hit better employment numbers and to most this means a rising Feds Fund Rate.

    Rates if they do rise, and I think they will, generally rise very gradually.  We may have a week of headline news of impending higher rates but it is just to gain attention mostly. Rising rates will make Adjustable Rate options more attractive. Right now the spread between 30 year fixed and ARM rates make the fixed rates for most buyers the better choice. If you are borrowing 750k or more the long term ARM’s are a better play but again you have to be in that loan amount category for me to really suggest it is the better option.

    Top Prediction – Rates will eventually go up.  This year is a pretty safe bet.  In order to offset just a 1% rise in rates a buyer has to spend MORE than 10% less just to keep the same principal and interest monthly payment.

    Example:

    $500,000 Loan – 4% interest – 30 years  = $2387 payment

    $450,000 Loan – 5% interest – 30 years = $2,415 payment

    Final Analysis

    • The fall market usually results in an 18% rise in inventory and similarly a 20% rise in buyer sales.  (versus spring, which is much higher for both)
    • Threat of interest rate hikes will likely cause some buyers to get off the fence and buy this fall
    • Multiple offers on the best priced homes will rise
    • Short sale and foreclosure home inventory will continue to drop
    • Prices will stay the same or slightly drop (less than 5%) due to inventory levels for most areas of the Outer Banks
    • Price reductions will continue to be the main tool used to get most homes sold, keeping the average days on market high
    • To beat the curve, price your home 5% to 10% below market value to entice multiple offers (driving up the price) and to sell quickly, avoiding the price reduction method of selling as well as further out of pocket costs
    • Rental income will continue to be strong and will support roughly 75% of the expenses of owning  (for most homes)

    My goal is to always provide unbiased information to every prospective buyer and seller.  I want you to have the FULL PICTURE of the market today so that the best decision for you and your family can be made.  I hope you got a lot out of this report.  I know I learned a lot in putting it together.

    If you have questions about buying or selling on the Outer Banks, I hope you’ll contact me to assist you in that endeavor.

  • July Update for the Outer Banks

    Posted Under: Market Conditions in Duck, In My Neighborhood in Duck  |  July 25, 2014 5:53 PM  |  39 views  |  No comments

    We are half way through the season and the traffic is an unkind reminder. Saturdays have been a bear for sure. The weather has been quite pleasant for the most part. With the exception of good old Arthur swinging through over the 4th! The beaches north of Oregon Inlet were spared from any major damage. Not even an evacuation! That was odd for sure.

    There are a few noteworthy topics this month. 

    Mid-Currituck Bridge – After months and months of silence on this topic there's been a few rumblings. Not good news at all, even though two local Reps are staying positive, it's an unlikely project to be revived any time soon.

    You be the judge – Article 1 and Article 2:

    Insurance for NC - Unless you act today, thousands of NC property owners could continue to face sharp increases in their insurance rates, as much as 35% for barrier islands and 25% statewide. The North Carolina General Assembly is considering a bill right now that would protect them. It would create transparency, accuracy, and fairness in the insurance rate-setting process. The House passed the bill unanimously, and now it's time for the Senate to take action. Please contact NC State Senator immediately and request a vote on HB 519, Property Insurance Rate-Making Reform.

    Click here for more info.

    Market Update  Not much has changed since last month. Activity is strong, while prices continue to be affected by the large inventory numbers. Average days on the market is still over 200 days for most areas. The month's supply of inventory for most locations is at least 12 months with Duck showing 18 and Corolla at a whopping 30 months. What does this mean? It means we are still recovering. This is not a short term process.

    I'm putting together a special email with a full Fall Forecast for the Outer Banks Market. If you want to receive the Fall Forecast, email me at ilona@beachrealtync.com with the words "Fall Forecast". 

  • June Outer Banks Market Update

    Posted Under: Market Conditions in Duck, Home Buying in Duck  |  June 30, 2014 6:10 PM  |  94 views  |  1 comment

    Activity has definitely improved in the 2nd quarter over the poor performance of the 1st quarter.

    Here are the main highlights: 

    • While it seems that the median sales price is rising, a closer look into the numbers reveals that instead there are simply fewer homes available in the under $300,000 range.  With more homes selling in the half million range, it’s pushing the average sale price up.  However, that’s NOT the same as prices are rising.
    • There is still over 20 months of inventory on the market for our local area.  A normal market is 4 to 6 months.  We have 3248 properties for sale.  Typically in a normal market we carry an inventory of about 1500.  With double the inventory we normally have, you can see appreciation for our market is just not feasible at this time.
    • Distressed sales have become such a small portion of our market, they are almost inconsequential.  The real strain on prices is over supply of inventory with unmotivated sellers.  Keep in mind, we CAN sell your home…you just have to be willing to accept the current market conditions.  If you’re not serious about actually selling, taking your property off the market is the most beneficial thing you can do for everyone.
    • Activity for May was way up from April, however year to date our number of sales is still down 5% for total units sold.  Again, we suspect we will make this up over the summer and have a busier than normal summer selling season.  There’s no financial gain to wait until the fall to list your home.

    If you’d like more information on buying or selling, simply click through to send your inquiry.

  • May Outer Banks Market Report

    Posted Under: Market Conditions in Duck, Home Buying in Duck  |  May 22, 2014 7:00 AM  |  153 views  |  No comments

    Overall, April was strong with monthly unit sales up 24% over March sales.  However, overall unit sales are still down by 12% for 2014. To break it down even further, Residential unit sales are down by 7% and land sales are down by 30%.

    Some good news is the number of listings placed in an Under Contract status continues to climb in 2014 yet are not at the levels we experienced in 2013 – down 26% from 2012.

    Distressed unit property sales continue to crawl upwards for 2014 but they are down by 44% from 2013. Additionally, the average sales price for a potential short sale is down 13% but for bank owned properties the average sale price is up 25%. Distressed property sales have been on a steady decline. Still, distressed sales only make up 6% of all sales.

    Foreclosures – For many months it has been reported that the number of Dare County foreclosures has been declining. In April, the number of foreclosures took a dramatic turn – up by 133% over March. It will be important to continue to monitor the foreclosure filings to determine if this is a trend.

    In summary, the activity has increased, but is still slower than last year.  Prices remain steady in most markets, reporting a slight increase for year to date so far.  Does that mean prices are going up?  Sadly, no…it's nearly impossible with the amount of inventory on the market right now.  It does mean, however, we are selling MORE high end homes which is fantastic news all around!  It also means the majority of homes for sale under the $300,000 mark is greatly diminishing.  That's great news for those looking at signs of recovery.

  • It's a Coulda, Woulda, Shoulda Market!

    Posted Under: General Area in Duck, Market Conditions in Duck  |  July 9, 2012 4:07 AM  |  191 views  |  No comments


  • Update to My 2012 Predictions

    Posted Under: Market Conditions in Duck, Home Buying in Duck, Home Selling in Duck  |  February 17, 2012 12:26 PM  |  264 views  |  1 comment
    It’s already time to update you all on some of my 2012 Outer Banks Predictions!  In just a month’s time we’ve already seen a few interesting things happen.  In case you missed the original email with all 10 of them, here’s a link.
      
    Prediction – 2012 will see an increase in the number of sales over last year by 15%. 
    Update - According to the numbers just released by our local association, residential sales for January were up 13% over last January.  There’s no doubt this will be a great year to buy a home!

    Prediction - Home values will drop another 5% to 7%. 
    Update - Sadly I have to report there is already a 2% drop in median value of residential home prices just for January.  With the Spring market coming up, the drop should stymie for a few months.  It’s definitely clear selling sooner is going to be better than later!

    Prediction - Your Dare or Currituck County Tax Assessment will be re-adjusted in the next 12 months and you’ll probably see a 25% to 30% drop in the Tax Assessment. 
    Update - Dare and Currituck County will NOT have new assessments until 2013.  The appraisal department informed us that the assessments will not be complete until next January and at that time the County will mail the notifications to homeowners.  The websites will not be updated until after the notification.

    I’ll keep you updated with any other major news!  As always, let me know how I can help with your Outer Banks Real Estate needs!
  • Top 10 Outer Banks Real Estate Market Predictions

    Posted Under: General Area in Duck, Market Conditions in Duck, Home Buying in Duck  |  January 13, 2012 9:44 AM  |  343 views  |  No comments

    Top 10 Outer Banks Real Estate Market Predictions

    Happy New Year!  We’ve had a really exciting time recently on the Outer Banks.  So many great things are happening and yet in some ways there’s still some struggle.  This year I wanted to share with you some predictions I’ve made about our market for 2012.  Let’s see how many you agree with, disagree with, share your own predictions or just follow along.  At the end of the year it will be fun to take a look back and see what we got right!  Here goes…

     ·         The Mid-Currituck County Bridge project completion date will be postponed…again!  If you’ve been around the Outer Banks any length of time, I’m sure you’ll agree this prediction really needs no further explanation.

    ·         2012 will see an increase in the number of sales over last year by 15%.  In 2010 we saw our first signs of hope when number of sales closed at 25% more than 2009.  In 2011 we kept pace, closing out the year at less than 1% difference.  I believe 2012 will go up due to increasing confidence and the unbelievable deals offered here.
    ·         2012 will prove to be the best time to buy in 2 generations!  If you’re on the fence and waiting for the perfect moment to buy that beach home, it’s here!  There are so many properties that have excellent rental returns, we have the lowest interest rates and prices unseen since 2000!  You’ll be saying “shoulda, coulda, woulda” if you wait to invest.

    ·         Interest rates will rise mid-year.  As consumer confidence builds and nationally the housing market continues to see good news rates will rise as that goes hand in hand with greater housing demand.

    ·         Building starts on the Outer Banks will go up.  Lot sales have taken the greatest hit in value.  We’re starting to see lot sales go up in double digits!  People are realizing with today’s extremely low lot prices, they can build for about the same as buying an existing house.  For several buyers this year that will be an appealing option!

    ·         2012 will be another record year for rentals.  If you rely on that income, good news…you’ll get it this year.  As airline fees continue to go up and the Outer Banks becomes an even more popular wedding destination we should be packed to the brim for about 20 weeks this year.

     ·         There will be a small drop in the number of Bank Owned homes for sale.  We have had a steady inventory of distressed homes at around 14% each month.  In addition we closed out 2011 with an average of 36% of closed sales each month being a distress sale.  That dropped 2% from 2010.  While distress inventory isn’t going to go away anytime soon, we see no evidence that it will rise and more evidence we could see a percentage or two drop for the second year in a row!

    ·         Home values will drop another 5% to 7%.  The median home sales price dropped 6% in 2011.  With inventory levels out of control and still a good number of distress sales, sadly we aren’t out of the woods just yet.  Continue to plan on another 6 to 7 years before home prices will be measurably higher than they are today.

    ·         Your Dare or Currituck County Tax Assessment will be re-adjusted in the next 12 months and you’ll probably see a 25% to 30% drop in the Tax Assessment.  Now, don’t get too excited yet.  Once that happens you’ll see the battle begin to raise that Tax Rate so that your actual tax bill doesn’t change too much.  The budget hasn’t changed that drastically that the County can give you a 25% drop in your property taxes.  Now, considering taxes here for a million dollar property are around $4500, that’s really not much to complain about!

    My last prediction is that for my personal business, this will be my best year ever!  I have so much enthusiasm about this market I can hardly control myself.  I know there will be tough conversations with several sellers this year and tough negotiations with buyers as well.  All in all, I feel it’s a great time to be an American and I love watching our country fight to get back to an economy we can all enjoy again!
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