Outer Banks rentals have always been popular among “the summer people” who come from all over the U.S. to North Carolina and prefer everything from a small oceanfront condo to a big estate that can accommodate an extended family. If you work with a reputable realty company that is familiar with the area, you not only get the service you need to make your vacation stay seamless, but you might also get tips on purchasing an oceanfront home rather than wasting your money by renting.
According to a recent Outer Banks realty and construction report, despite the pandemic, the real estate market in the Outer Banks has managed to keep ahead of the market shifts. Some experts say the market was so good in the first half of 2022 that it might never be duplicated. Home values increased, while many oceanfront properties have been purchased above the asking price not within weeks or days but within hours.
Values in the Outer Banks are said to have increased by nearly 50 percent or more, setting real estate records for units sold and overall sales volume. Housing inventory is said to have begun its expansion in February of 2022. The number of days available homes spent on the market fell due to a depleted housing inventory. But in the second part of 2022, the inventory is said to have started creeping back up.
Average home prices in the Outer Banks are said to be leveling off, which could be the result of a “new bottom” in the sales market.
An Outer Banks Market Summary
What drives the Outer Banks economy? Tourism. Most homes are investment properties or vacation homes. This is said to require a “strong buyer” who can afford to put 20-25 percent down on a prospective property. That’s said to be a major down payment in this difficult real estate market and a time of spiking inflation.
During the previous real estate boom prior to the COVID-19 pandemic, you could borrow cash relatively easily. Some borrowers were, in essence, unqualified. But in the new market, the borrower is generally expected to be overqualified.
Real estate professionals are looking for home purchases that involve at least 10 percent cash. This factor alone proves that the Outer Banks market is solid and not subject to a bubble that is about to burst anytime soon.
Referred to as the Northern Beaches, the Corolla area in the Outer Banks is said to have achieved the most turnover in two decades. New buyers are also spending money on remodeling. Construction professionals concur that the number of building permits applied for and granted over the latter half of 2022, thus far, has been outstanding. In theory, this should result in a massive spike in Outer Banks rentals and new homes sales over the coming years.
According to reports, new construction has been steady over the last half year. New subdivisions have sprung up in Kill Devil Hills and Corolla in particular. The lot prices remain “relatively low for the market.” Interested buyers should take into consideration that new constriction can give you more of what you wish for in a home than a remodel can.
Outer Banks Real Estate Predictions for the Second Half of 2022
During Q1 and Q2 of 2022, interest rates rose, the stock market tanked, and new buyer activity slowed as a result. However, new properties are being listed daily, so it should be a good time for buyers to return to the Outer Banks real estate market, even with rising interest rates.
However, construction and real estate experts agree that in Q3 and Q4 of 2022, new property listings will continue to rise due to a lack of “aggressive buyers.” The Fed has certainly agreed to raise rates another .75 percent as 2022 closes out. But quantitative tightening can only last for so long before easing begins again.
Real estate experts say they don’t feel like a “buyer’s market” will reemerge before 2023. But they believe there are terrific opportunities to buy as 2023 moves toward 2024. It’s all a matter of buyer patience and researching where you will likely find excellent bargains. You might even find a rent-to-own situation that meets your needs.