I’ve been thinking about this blog for a couple weeks and how things in the Outer Banks real estate market seem to be shifting. Over my 16 years in selling real estate, we have seen market conditions change with the boom of the early 2000s, then the crash that followed with foreclosures and short sales to recent improving market stability. The end of 2019 we saw the decline in stock values and some market fear, leaving me to wonder how 2020 would shape and then along comes the pandemic. The closure of our beaches in March slowed our market and buyers were apprehensive to close with no timeline to reopen. During the closure we remained steady with sales inquiries from buyers/sellers and continued our marketing efforts, even putting homes under contract and having closings. Then came May 16…time to reopen our beaches…and the boom started.
Since our beaches reopened on May 16, our sales inquiries have exploded. A hot market we haven’t seen since the early 2000s creating long ago scenarios like multiple offers and double-digit showings on turnover. But this market is different, the 2000s boom was built on credit, credit, borrow, borrow and this boom is building on solid cash.
So, to finally to get the point of this blog…is this market a short term boom? is this based on the 2 month closure of our beaches and these are buyers who planned to buy anyway? Or is this based on something different? is this a reflection of lifestyle changes set in motion by the pandemic? are these buyers looking to live a different lifestyle as they continue to work from home for the foreseeable future?
The Outer Banks market has always offered a pretty simple “sauce” and 3 basic scenarios of buyers.
- The largest market segment of buyers are those who are looking for second or vacation home with a 10% ROI based on rental income.
- Next up is buyers looking for a primary residence
- Finally, we have the smallest “silver tuna” group of buyers who are looking for a second home period, no rentals just straight second home for personal use.
What is the shift? We are seeing buyers from scenario #1 shift to scenario #3. Many of the buyers we represent and offers we see for our listings have the same request – no rentals. Even homes currently in a rental program, the buyers are looking to move guests or asking to not take any additional reservations. This is a market condition we have never seen.
A recent survey and blog by Zillow was titled, “A Rise in Remote Work Could Lead to a New Suburban Boom” and the information is very interesting.
“Zillow survey suggests housing preferences could be upended in a post-pandemic America, leading to major questions about the future of dense metro cores.
– Three quarters of Americans working from home because of the coronavirus say they want to continue if given the option, and two-thirds say they would consider moving if given that flexibility.”
Is this market our version of a suburban boom? Only time will tell but when Americans are given the choice where to live, why not live at the beach?