Sales

Buyers today are primarily looking for location, condition, and price in the properties that they purchase. Since the location is fixed, and rental homes are usually in good condition, the variable over which a seller has the most control when listing their home for sale is the asking price.

Traditionally, the best measures of a home's value are the price at which comparable properties have been sold and those that are under contract. We also study the prices at which similar properties are presently being offered for sale to get some feel for the competition. Despite the market indicators that lead us to a determination of the probable sale price for the home that is being evaluated, some homeowners choose to "overprice" their properties.

We hear a variety of reasons for overpricing including - "My home is unique, and market trends have no relevance"; "I recently spent a lot of money on a new heat pump or a new roof, and I want to recover those costs"; and, "I need to get this amount of money out of the sale." While each of these comments may have relevance to the seller, if they influence the objectivity of the pricing analysis and result in a listing price that is higher than current market conditions warrant, then, serious consequences for the marketing of the property and its eventual sale will occur.

---

Sometimes the future can become a little clearer if we look at the past. The graph on the right shows the trends in average residential selling prices since 1994.

A number of well-informed professionals have observed that the real estate market on the Outer Banks runs in 10-year cycles. If there is any substance to this comment, then I think it is fairly safe to say that the market is stabilizing and forming a foundation for its next movement upward.

My sense is that we have at least another year of flat selling prices, mainly because of the continuing inventory of foreclosed properties and short sales which places a ceiling on price appreciation. The good news is that the number of foreclosure filings has decreased on the island for the past three years, and the number of distressed property sales has increased. Last year, distressed property sales represented 56 percent of the total residential sales on Hatteras Island and 54 percent of unimproved lot sales.

---

Last month Alex and three members of the Outer Beaches' Sales Team completed an intense three-day course to receive the National Association of Realtors® Green Designation certification. The training was designed to prepare us to counsel clients and homeowners concerning ways in which scarce and declining resources might be managed in a way that meets present needs without compromising the availability of these resources for the needs of future generations.

Whenever we start talking about "green" initiatives, there is a spectrum of preconceptions that need to be overcome before getting to the underlying value propositions. These red herrings range from the "tree-hugger" label to the very prevalent phenomenon of "greenwashing" where claims are made about products that lack a verifiable positive effect on the environment. Once we get past these obstacles, there really are some actions that can, under the right circumstances, produce meaningful results

Examples of resources on which each of us can have a relevant influence include energy, water, and air quality. Some of the possible benefits of incorporating available green technology and behavior patterns into our homes and daily activities include lower utility expenses, reduced water consumption, and more efficient energy usage.

---

As we enter the holiday season, it is a time of the year when our thoughts frequently turn to appreciation for the many things for which we are grateful. With the spirit of the season in mind, I recently looked at the island's real estate market to see what good things there might be to brighten our expectations for the New Year. I was pleasantly surprised to see the positive momentum that appears to be building among the major market indicators.

---

With all of the negative press reports that real estate is receiving in the national news media, it is easy to take the commentaries at face value without delving more deeply into the broader picture. While the information that is presented is statistically accurate, it focuses on short term data, and it usually does not reflect the familiar axiom that "all real estate is local."

With this in mind, I recently took a look at how residential real estate prices on Hatteras Island have compared to the performance of stocks over the past eleven years. As a surrogate for the stock market, I used the S&P 500 index. The chart to the right shows the ups and downs of average residential prices on the island and the S&P 500 each year between 2000 and 2010.

---