As the summer heats up, real estate sales continue to cool. I’ll explain as I examine the July Statistical Report just out from the Outer Banks Association of Realtors. I’ll give you some of my analysis as well.
July stats vs. historic stats
OBAR said in their June report sales were cooling, a trend that continued in July. When compared to last year they certainly are. Residential sales for the month of July are down 35% compared to July of 2020. Total monthly sales are down 20%.
If you just hear those stats, you might think the market is really slowing down, and we are getting back to normal. We are not. July 2020 was the beginning of an unprecedented period of historically high sales.
The data provided by OBAR goes back to 2005. Before last July there was only one month where total unit sales were over 400. May of 2005, 401 total sales. Since last July there have been nine months with total sales of 400+ units. The average for the last 13 months is 406.
Compared to July of 2019, residential sales are up 40%, and total sales are up 55%. July 2021 lot/land sales are up 67% compared to 2020 and 107% compare to 2019. July total unit sales are 360. So maybe we are cooling from the high.
But the last time total unit sales were over 300 was in April of 2005 with 318 total units. From May 2016 through May of 2020 the average total monthly unit sales is 207. Cooling yes. Back to normal, not hardly.
The feeding frenzy appears to have diminished a bit. For example, not as many homes are going under contract during the first seven days. But demand is still strong, prices continue to rise, although at a slower pace. And inventory is still low. This strong seller’s market isn’t over yet!
I have to salute OBAR, who gives local REALTORS® such great data to help keep ourselves, and our clients educated. This helps everyone make informed decisions.
Back to that data, yearly sales are up; total sales up 65%, residential up 52%, lot/land up 147%. Compared to 2019 total sales are up 86%!
Total inventory is down 32% compared to last year, 54% compared to 2019. Residential inventory is down 46% compared to July of 2020, and 68% compared to 2019. Lot/Land inventory is down 17% compared to last year, 31% compared to 2019. On August 9th, the day I wrote this report, there are 500 active listings compared to 1491 in 2019.
Strong sales equal strong demand for historically low inventory. It’s not a bubble, it’s a lack of inventory.
That is also fueling the increase in prices, with the median residential price up 34% compared to last year at $490,000. Compared to 2019, that is a 56% increase.
The current market
Low interest rates are another component continuing to drive the market. Sam Khater, the chief economist at Freddie Mac, pointed out the interest rates have again dipped down to historic lows.
So the good news for buyers in all of this (yes there is some) along with continued low interest rates the feeding frenzy we have been experiencing has slowed. You may still run into multiple offer situations, but with less competition than before. You still need to prepare yourself with all of your financials in order, a pre-qualification letter, or proof of funds. It is still a seller’s market.
Some sellers are still of the mindset that since it is a seller’s market, let’s put a high price on the property and negotiate down. What happens is the high price deters buyers. The property sits on the market until the seller lowers the price enough to generate buyer interest. Have your REALTOR® show you the data used to determine the market value of your property. They want you to get get the most for your property just as much as you do.
August stats by area
Below are the stats for the individual areas for the month of July:
- Corolla – Sales down 41%, median sales price up 28% to $719,500.
- Duck – Sales down 61%, median sales price down 7% to $486,000. But without the co-ownerships, where 5 plus weeks are sold, not the property itself, sales were down 48%, median sales price up 83% to $1,031,999.
- Southern Shores – Sales down 20%, median sales price up 20% to $611,000.
- Kitty Hawk – Sales down 59%, median sales price up 29% to $508,000.
- Colington – Sales down 37%, median sales price up 15% to $343,750.
- Kill Devil Hills – Sales down 24%, median sales price up 16% to $383,750.
- Nags Head – Sales down 43%, median sales price up 27% to $607,500.
- All Hatteras – Sales down 43%, median sales price up 36% to $510,000.
- Roanoke Island – Sales up 6%, median sales price up 19% to $422,000.
- Currituck Mainland – Sales up 17%, median sales price up 15% to $319,000.
- Ocracoke – Sales up 200%, median sales price up 22% to $432,500.
Information in this article is based on information from the Outer Banks Association of REALTORS® MLS for the period January 1, 2019, through August 9th, 2021.
Mike is a long-time “Outer Banker”, both as a vacationer and a full-time resident. You may also know him as “Moose”, his nickname since he was 15 years old, and his on-air radio name for decades in Raleigh, Greensboro/Winston-Salem, Norfolk, and formerly on Beach 104 every morning on the “Moose & Jody Show” for over 14 years. Michael has built successful businesses on the Outer Banks. He is active in the community as well as a founding board member and Vice President of “Outer Banks Forever”, Past President of “The First Flight Society”, a founding member of “The Outer Banks Bicycle & Pedestrian Coalition”, and Past President and current member of “First Flight Rotary. Moose shares your love of the Outer Banks and understands the uniqueness of the area. Learn more at mooseobx.com