A few weeks ago, I attended a conference that featured very successful real estate brokers from around the country. The consensus of opinion was that real estate markets nationwide are recovering and that a transition from the buyer's market that started in 2005 to the next growth cycle has begun. However, not all geographic markets are at the same point in the recovery process, and there are significant differences in the level of progress even within a specific market area.
Based on statistics through April of this year and comparisons of market indicators with the first four months of 2011, I believe that this assessment accurately represents what is occurring on Hatteras Island. Here is a look at some of the most relevant numbers which reflect the theme of more sales at lower prices.
The many activities associated with preparing the 2013 property revaluation in Dare County are nearing completion. "Property Revaluation" is the official term for a reassessment of property values. To determine values for taxation, North Carolina legislation requires that real property be reappraised at least every eight years, but counties have the discretion to conduct the revaluation more frequently. In Dare County, the last reappraisal of property took place in 2005, a year earlier than the eight-year requirement, in recognition of the substantial appreciation that real estate had experienced during the boom years.
Real property is assessed at 100% of the fair market value determined as of January 1st - the effective date of the revaluation. One misconception relative to assessed values is the belief that the valuation methodology used by county appraisers is the same as analytical procedures used by real estate agents to determine probable sale prices or by real estate appraisers to establish market values for loan purposes. Actually, the county's methods are somewhat similar, but not identical.
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.
All information on this website is deemed reliable but is not guaranteed. All reasonable efforts have been made to ensure that the information on this website is accurate, however, Outer Beaches Realty cannot be held responsible for errors or omissions.