March 2022 Real Estate Market on the Outer Banks, NC
OBX New Listings: Here Today, Gone Tomorrow
The calendar month changes, but the story stays the same. New listings remain few and far between, quickly changing hands the minute they hit the market. It’s a pattern the Outer Banks has been stuck on for more than two years.
Higher interest rates have made some buyers more hesitant, but not all. Of all properties listed in the OBX since the start of 2022, 81 percent are already off the market. While market indicators point toward a long-anticipated cooling-off period, eager buyers still can find plenty of sales.
OBX by the Numbers
The March 2022 MLS Statistical Report from the Outer Banks Association of Realtors includes some interesting data that reveals where the market might be headed in the short term. As of March 30, the MLS has 238 active listings.
Of note in the March Report:
• Inventory is down 24 percent across commercial, lots/land, and residential properties. Residential properties saw the steepest decrease in available listings at 30 percent. Lots and land saw the next steepest decrease at 24 percent, with commercial properties faring the best at only a 4 percent reduction.
• Sales are down 16 percent overall. When broken down by category, residential sales took the biggest hit at a 20 percent decrease. However, lots and land sales remained stable and commercial sales bucked the trend by increasing 45 percent.
• Selling prices remain high. Within the entirety of the MLS, only 50 residential listings are priced under $400,000. Of those, only 19 are on the OBX between Corolla and Hatteras. The average residential median sales price rose 27 percent over last year to $575,000.
Sustaining the streak
Like most of the U.S. housing market, the Outer Banks has been on a sustained streak of increased demand, reduced inventory, and rising prices since March 2020. How long it can support this frantic pace remains to be seen, but a few things have become clear.
- Demand will continue to outpace available inventory.
While inventory is expected to rebound slowly this year, demand doesn’t appear to be slowing. A recent report from the Dare County Tourism Board revealed new records for occupancy collections at the start of the year. Rental revenues also remained high, making it an excellent time to be a real estate investor in the Outer Banks.
- Inventory eventually will regain some ground, thanks in part to the rise in interest rates. The Federal Reserve raised interest rates once already and is anticipated to make several more increases to combat inflation as the year progresses. Typical home loan interest rates have risen from 2.6 percent a year ago to around 4.75 percent, tamping down some prospective buyers’ excitement.
- Prices will continue to increase.
Rental properties continue to be a hot commodity across all OBX towns. This makes available inventory increasingly attractive to real estate investors looking to make 10 percent of a property’s purchase price the annual rental revenue.
Even with higher interest rates, investors may not shy away from the marketplace. Their continued focus on available properties will keep property values — and sale prices — on the uptick for most of the year.
Only time will tell if buyers and sellers are in for more of the same through 2022.