Category Archives: Buyers Info

Tax Reform Threatens the Holy Grail of Real Estate – The American Dream of Home Ownership and the Mortgage Interest Deduction

Tax Reform Impact on Real Estate

Most people would agree that the US tax code is too complex and should be simplified. Once you move from the general concept of simplification to the execution is where the difficulties occur. Personal self-interest favors keeping tax deductions one qualifies for while eliminating deductions of one’s neighbor.

Mortgage Interest Deduction

Tax deductibility of mortgage interest has been favored by the real estate industry for, what seems like, forever. Actually, it dates back to 1913 and most consider it sacred and not to be touched by any reforms. The current proposal leaves it in place, but ineffective or irrelevant, to all but the wealthiest Americans.

President Trump’s tax overhaul plan removes every deduction except for the home mortgage interest deduction and charitable contributions. Many experts argue, nonetheless, the plan effectively makes both these deductions irrelevant by doubling the standard deduction to $12k for single tax payers and $24k for married couples. No longer would state and local taxes be deductible. Effectively, over 80% of homeowner’s who itemize under the current tax system would see a greater benefit by taking the standard deduction under the new plan.

For example, a couple with a $500k mortgage (which is much higher than average) at 4% interest would pay about $20k in interest. That couple would then have to donate $4k to charities to match the standard deduction under the new plan. Fewer homeowners would choose to itemize deductions as the standard deduction would be more beneficial. This would effectively eliminate the incentive to buy homes and donate to charities. Many experts believe this could further decrease the US homeownership rate, which is currently 63% down from 69% in 2004.

Is the US destined to become a nation of renters?

The National Association of Realtors suggest most middle income homeowners who currently itemize would likely pay higher taxes due to the elimination of state and local tax deduction and dependency deductions that would be folded into the higher standard deduction.

A recent Fortune article states it a little differently, “The elimination of mortgage-related tax savings for most homeowners, and reduction for others, compounded with the loss of tax savings from deducting property taxes means the after-tax cost of home ownership will increase. A taxpayer in the 25% tax bracket with $11,000 in mortgage interest and $5,000 in real estate taxes would receive tax savings from these itemized deductions of $4,000, or $333 per month, under the current law. The elimination of the home-ownership tax subsidies means that the after-tax cost of home ownership will increase”.

Rental property owners will likely continue to enjoy favorable tax benefits.

Rental Property

While the proposal does not have all the details specified, it does not appear to reduce the tax subsidies benefiting owners of residential rental real estate.

Residential rental property owners and vacation rental property owners may continue to deduct mortgage interest paid to purchase the rental property and can also deduct state and local property taxes. These items are not considered itemized deductions but are deductions in computing net rental income.

Eliminating the state and local tax deduction under the proposal only applies to an individual taxpayer’s itemized deductions. Rental property owners will still receive the federal tax savings from both mortgage interest and real estate taxes. Clearly, the proposal creates a stark difference in the tax treatment and incentives between owner-occupied homes and rental properties.

Furthermore, rental property owners can also deduct the cost of maintenance and depreciation. When it comes time to sell, the rental property owner can use a 1031 exchange and avoid taxes on the sale and acquiring a like property. The proposals reduced tax rate of 25% for pass through will further benefit real estate rental industry.

Individual Tax Rates

Tax brackets under the new plan would also be reduced from 7 currently to 4. The top tax bracket would be reduced from 39.6% to 35%. Next, there would be a 25% and 12% bracket. The fourth bracket in the plan was not described in detail but would be for the highest income households and exceed the 35% bracket.

The alternative minimum tax and estate tax would be eliminated from the tax code.

The plan did not define tax treatment for dividends or long term capital gains, or the profit on the sale of one’s primary residence.

The gift tax was also not mentioned in the proposed tax plan. Gift taxes are payable on gifts of more than $14k annually. “Gifts” are commonly used by first time homebuyers.

Small Business

Changes in taxes for small or family owned businesses was included in the plan but not well defined. Some of these are organized as flow through businesses or pass through (sole proprietorship’s, partnerships or S Corporations) but it is unclear if all business structured as such would have a 25% maximum tax rate or if it would only be limited to an organization that meets criteria for “small” or “family owned”. It could also be defined with a revenue limit. Many legislators have previously indicated that “professional service” companies like healthcare, legal, accounting would not be eligible for the 25% maximum rate.

Corporate Taxes

The Corporate tax rate is to be reduced to 20% in the proposal. This is believed to work as an incentive to keep companies in the US instead of moving profits offshore. However, labor and raw material costs would have to be competitive to wipe out the incentive to operate globally in the most efficient manner.

Expensing Structures

The tax proposal would like to create incentives for companies to invest in new assets by allowing full depreciation or immediately expensing to lower taxable income. While all eligible assets were not specified, structures were specified, which is believed to mean buildings. If borrowed funds are used to purchase new assets and then the assets are depreciated immediately then the interest expense would not be deductible.

The tax proposal does keep the low-income housing credit to continue to provide an incentive to developers to build affordable housing.

Tax planning and preparation can be complicated, hopefully tax reform will simplify the process for most Americans. In the meantime, it is always best to consult with an expert in this area for specific advice that considers your exact circumstances. The Eillu team has decades of experience selling real estate on the Outer Banks and have insight to structure 1031 exchanges and more complicated deals. Schedule an appointment today to learn how to maximize the profit on the sale of your home with our low real estate listing commission.

MLS Monthly Outer Banks Market Report


September 2017 Outer Banks Real Estate Market Outlook and Current Statistics

Outer Banks Real Estate Market Outlook Sept 2017

The Outer Banks Association of Realtors released the September 2017 MLS Statistical Report – you can get the full report here.

Real estate sales for September 2017 in the Outer Banks increased slightly from August with 156 units to 158 units. This is almost the same as September 2016 sales of 159 units. Under contract units increased by 6% to 442 from August reported 419 units under contract. The average home price increased by 4% compared to 2016. The median single family home price has increase by 2% in 2017 while condos have increased by 5% in 2017. Some highlights from this month’s report follows.

Overall Market

Residential inventory decreased by 10% in September following last month’s 8% decrease both compared to last year. The inventory trend has continued downward for the past few months. Active residential inventory is 1484 units. The quantity sold increased by 11% following last month’s 11% increase; with volume sold up by 16% following the same increase last month.

Lots and land quantity sold increased by 6% after last month’s increase of 8%. The average sale price for lots fell by 191% and while the median price increased by 4%. Land inventory is down by 13% compared to last year.

Commercial unit sales are down by 24% following last month’s decrease of 20%. Only 16 commercial units were sold compared to 21 last year. The average and median sale prices have little relevance with such a small sample and appear skewed from a large sale last year. Commercial inventory is down 22% compared to last year with only 57 units active on the market compared to 73 units last year.

Distressed Property

Distressed sales increased in September and were 9% of all residential sales compared to 2% reported last month. There were 22 residential short sale units sold, compared to 24 short sales this time last year; an 8% change from one year ago. The average sale price decreased by 12%. The median sale price increased by 6%.

Sales for bank owned properties increased by 11% from 57 units to 63 units compared to last year. The average sale price for Bank Owned property fell by 8% compared to last year; while the median decreased by 1%.

Overall, the quantity of distressed property sold increased by 5% compared to the same period in 2016. The average price decreased by 11% and the median increased by 3%. Total volume sold is down by 8% compared to last year.

The effect distressed real estate will have on the overall Outer Banks market will continue to diminish as foreclosure and short sale inventory is depleted and the market returns to pre-recessionary levels of distressed real estate.

Residential

Single family unit sales increased by 13% slightly higher than the 12% reported last month, with 1275 units compared to last year 1130 units. The volume sold increased 17% with the average sale price increase by 4% and the median sale price increased by 2%.

Condos unit sales increased by 12% following last month’s 16% increase compared to last year. September condo unit sales were 151 compared to 135 a year ago. The volume sold increase by 10% following last month’s 14% increase. Median sale prices for condos increased by 5% compared to last year. Average sale prices fell by 1%, compared to last year. Unlike many other markets, the Outer Banks did not see an oversupply of condo construction during the boom years and current demand for condos has been strong in 2017.

Residential land unit sales increased by 3% in September. This follows the 5% YOY increase reported in August and a 19% increase reported in July. The average sale price fell by 11% while the median price was unchanged compared to last year.

Overall Days on the Market for the all residential properties is down by 39% in September following the reported 23% decrease in August. Days on the market is 124 versus 203. Upon closer inspection, for the 800 units sold since Jan. 2017 the average days on the market is a startling 46 days. Outer Banks properties are selling much faster; especially new inventory.

New Construction building permits are down by 16% with 184 units compared to 220 last years. Building permit value decreased by 21%.

Outer Banks Town Statistics

The September 2017 median sale prices for the towns in the Outer Banks and the percent change compared to 2016 appear below:

Sept 2017 OBX market report

Sept 2017 OBX market report data table

Corolla experienced the largest percentage gain of 13% compared to 2016. The next highest YTD increase was Hatteras Island at 8%; these towns are unchanged from June, July and August.

The Outer Banks real estate market is on track for a solid sales year. OBXMLS reports 442 under contract compared to 419 units reported last month. October is a great time to visit the Outer Banks and view real estate as the crowds have reduced and the weather is warm during the day but with low humidity and cool at night. Experience the colors of fall on the OBX; the marsh grass gets a pewter color, the sea oats rustle in the breeze and the deciduous trees change into the reds and golds!

If you have been thinking about an Outer Banks vacation home purchase, second home purchase or permanent home, now is the time to act. Purchasing power will decrease once the anticipated mortgage rates increase. Smart buyers and investors will lock in rates now before the increase.

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If you have considered selling your Outer Banks home, now may be the best time. The lower inventory levels will allow your property to be seen with less competition. The strong demand will sell your home with fewer days on the market. Our 1.5% listing commission will save you thousands of dollars!

The rental market continues to be strong to provide income from the investment and enjoyment for the family for years to come.

The Outer Banks continues to be named a top beach destination every year. Beach nourishment has recently been completed for a large portion of Dare County beaches and will ensure strong future appreciation for real estate.

Schedule an appointment today to find your vacation rental property, second home or investment property.

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How Will NFIP changes Impact you Outer Banks Home Purchase or Sale?

impact on Outer Banks for National Flood Insurance Program Changes

NFIP Expiration Date Extended to December

The National Flood Insurance Program (NFIP), administered by Federal Emergency Management Agency (FEMA), was set to expire on September 30, 2017.  With consideration for the areas impacted by Irma and Harvey, the US Senate voted to extend the NFIP on September 7; the House of Representatives passed the legislation on September 8th and the President signed it into law later in the day.  This is a reprieve but not a solution.  The deadline for something to be done is now December 8th 2017.

The new legislation provides 3 months to find a solution.  It is time needed for the folks impacted by recent storms and for law makers to come up with a real long term solution.  The National Association of Realtors (NAR) advocates a comprehensive re-authorization of the NFIP to cover the 5 million homeowners and 22,000 communities around the US.  The NFIP has been extended 17 times and lapsed 4 times between 2008 and 2012.  It is time to quit kicking the can down the road and find a long term solution.

NFIP Purpose

Established in 1968, the NFIP has played an essential role in efforts to prevent and recover from flood disasters.  Floods are the number one disaster in the US for the number of lives lost and property damage.  Flood insurance coverage is mandatory for property in a high risk area where the mortgage is provided by a federally backed or regulated lender.

The NFIP encourages communities to implement flood plain management policies and provides affordable insurance based on flooding risk as determined by the flood insurance rate maps.  The preliminary rates maps for Dare County were released last year and lowered the risk for 15,970 buildings.  Flood maps are revised every 10 years. 

As our previous blog post concluded: “just because you no longer are required to have flood insurance does not mean that you should cancel the policy.  A preferred risk policy may reduce the cost and provide valuable protection.   It could also be a lower cost option in the long run should the maps revert back.  Keeping the insurance in place may also make the property more saleable and provide the additional option of the new owner assuming the insurance policy after the sale.”

“Remember, annually over 20% of all flood insurance claims are from properties not in a designated Special Flood Hazzard Area (SFHA).  Operate accordingly.”

Many people do not carry flood insurance unless they are required to.  Only an estimated 20% of homeowners in the area affected by Harvey even bothered with flood insurance, a number that has been dropping in recent years.  This trend has complicated and driven the NFIP further in debt since the government eventually pays for damages not covered by insurance.  Katrina, for example, had a flood insurance payout of $16.3 billion. But Congress authorized supplemental spending of more than $100 billion to provide relief and temporary housing and to fix the broken levies. Harvey and Irma are likely to have a federal cost even higher.

NFIP Impact on Real Estate Sales and Purchases

The NAR released a statement “When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result. That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection from the No. 1 cause of loss of property and life: flooding.”

“This problem affects far more than coastal communities, and prospective homeowners aren’t the only ones at risk. Policyholders in over 22,000 communities across the country depend on the NFIP to protect homes and businesses from torrential rain, swollen rivers and lakes, snowmelt, failing infrastructure, as well as storm surges and hurricanes. When that lifeline is cut off, the NFIP can’t issue new policies or renew existing residential or commercial policies that expire. That means current home and business owners may find their most important asset unprotected.”

“Last year was the third largest claims payout year in NFIP’s history, costing more than $4 billion. While there were five billion-dollar floods, including Hurricane Matthew, four of the five were inland, and the largest single event was in Baton Rouge, Louisiana in August, just one year out from the NFIP’s expiration date.”

If the NFIP were to expire without a reauthorization or alternative solution, it will prevent new flood insurance policies from being issued.  Existing policies will remain in effect but claims could be put on hold until new legislation is passed.  There are few private insurers for flood coverage.  With NFIP in place, private insurer’s rates need to be competitive with NFIP, which are currently subsidized.  If the NFIP were to expire, flood insurance rates could become unaffordable.

NFIP History

The NFIP is over $24.6 billion in debt.  Storms like Katrina going back as far as 2005, and Sandy in 2012 have placed the agency in debt before claims for Harvey, Irma and even Marie are even tabulated.  Back in 2012, the NFIP was extended for 5 years and called for rate increases.  Many coastal residents felt they were bearing the brunt of the increase while not contributing most of the costs of the debt. 

Many recent storms had a greater impact inland than on coastal areas.  Willo Kelly, Government Affairs Director for the Outer Banks Association of Realtors and Outer Banks Home Builders Association, notes that up until Hurricane Matthew last year, North Carolina policyholders were paying more into the program then they were getting back in claims.

Finding Solutions

Reauthorizing the NFIP while encouraging the private flood insurance market development can provide options for a stable, affordable and sustainable flood insurance market.  Fifty years ago, when the NFIP was created, the private sector had no interest in participating since the risk was high and unpredictable.  Today, however, technology has made it easier to manage and predict the risks.  Encouraging the private flood insurance market to develop while phasing out the role of the NFIP can provide a long term viable solution.

One reform bill, the 21st Century Flood Reform Act, includes new coastal designations which could result in increased premiums for some property owners.  It would include an inland rating and a coastal rating.  The bill includes a provision where rates could rise as high at $10k per year, which is unaffordable for most property owners.

Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) in 2012, a five year reauthorization of the NFIP that revised the national mapping program and certain rate increases to achieve fiscal soundness by moving away from subsidized rates to full actuarial rates that are more reflective of risk.

Congress later passed the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), which repealed certain parts of the 2012 act (BW-12), restored grandfathering, limited certain rate increases and changed the approach for fiscal soundness of the fund by adding an annual surcharge to all policyholders.

Up until 2005 the NFIP was largely self-sustaining.  The NFIP covered claims with insurance premiums; and occasionally needed to borrow (and repay) funds from the treasury.  Evidence of mismanagement goes back to 2005 with Hurricane Katrina, where claims for uninsured damages were paid out and cost the program millions of dollars in additional losses.  Experts argue current rates in North Carolina cover the cost of claims. 

Long Term Planning & Management

Critics of the NFIP cite the mere existence of the agency and the subsidized insurance rates encourages development in flood prone areas.  As more flood prone land is developed, losses continue to mount. 

Repetitive flood losses on the same dwelling without raising the structure or other abatements is not a smart use of resources when flooding is likely to reoccur.  There may also be some areas that may require a retreat rather than rebuilding. 

There are several Texas communities where the same dwelling(s) has flooded 3 times in the last 3 years.  Hard hit is Willow Meadows, Houston, and Meyerland to name a few.  Some are seeking a home buyout where the resulting open land could then be used for drainage channels and absorption.

No matter where you may stand on sea level rising, some forecast must be used to predict future potential risks and adopt smarter building practices to minimize losses during a flood event.

Risk Evaluation

It has taken us since 1968 to get to this point and I don’t believe there is a fair solution that will fix the problem overnight.  It is likely a phased approach will be needed to implement changes gradually. 

Real estate buyers rely on FEMA’s flood maps to determine the flood risk on a property based on what “zone” it’s in. Unfortunately, FEMA’s flood maps are often inaccurate, outdated and not reflective of true flood risk. The result is that some homeowners pay too much, while others pay too little. That’s a problem and inherently not fair.

It is unfair to implement dramatic and sudden premium hikes on homeowners who bought their home before they knew the true risk.

Currently, it can take 10 years to update the maps.  As a result, it’s not unusual for homeowners in a lower-risk zone to suddenly discover they’ve been mapped into a higher-risk zone, which means higher premiums.  Sometimes much higher.

In some areas, homeowners have spent thousands to raise their property to reduce flood risk, and the potential burden on tax payers.  But, what happens when a homeowner raised the property by 2 feet only to find out the new FEMA maps require a 3 foot increase.  The homeowner’s investment is wiped away.

Outer Banks communities have been pro-active in managing the flood plains to minimize damage due to flooding.  In recognition of the effort, many residents in these communities receive a discount on the flood insurance premiums by reducing the risk.  Southern Shores for example, has a rating of class 6 in the community rating program and qualifies for a 20% discount on flood rates.

If you are buying or selling real estate, you can rely on the information and advice from the Eillu team.  Subscribe to our blog to stay up to date with Outer Banks area and real estate news.

MLS Monthly Outer Banks Market Report


Comprehensive Home Buyers Checklist Prior to Closing

 

If there are any issues discovered during your final walk through, immediately contact your agent to discuss them. Your Eillu real estate agent can advise you regarding appropriate courses of action. Depending on the severity of the issue, several courses of action can be taken. A minor item could be overlooked or you could seek financial compensation or repair by the seller. For more information on buying Outer Banks Real Estate or to learn more about the Outer Banks in general, please contact us and check out our blog. We are here to help you make your dreams come true.

OBX relocation guide


Enjoy The Best in Outer Banks New Home Design at The Parade of Homes

Outer Banks Parade of Homes 2017

The Outer Banks Parade of Homes is quickly approaching.  This year the event runs from Oct 5th to Oct 8th from 10am to 6pm and 10am to 3pm on the 8th.  This popular event showcases the best in Outer Banks New Homes.

This annual event is anxiously anticipated by locals, out of town home owners and tourists alike.  The event is sponsored by the Outer Banks Home Builders Association and has been a tradition for 25 years.  Tickets are only $10 for the 4 day event and proceeds benefit the food pantry and other local charities.  You can purchase your tickets at any home on the tour.  There are 15 homes included in the 2017 Parade of Homes.  It is a self-guided tour and you may visit the homes in any order and stay as long as you like.  

2017 Outer Banks Parade of Homes Map

October is one of the best months of the year to visit the Outer Banks.  Temperatures are cooler but the ocean is still warm enough to swim.  Crowds have thinned so visiting your favorite restaurant means no long wait times.  The crisp fall air makes biking, jogging and outdoor activities sheer pleasure.  What better time to visit all the new and exciting developments, OBX new homes and innovative materials from the best builders on the Outer Banks? 

The Parade of Homes tour spans 65 miles of pristine Outer Banks from Corolla to Manteo. The diverse landscape from sound to sea is enchanting in the fall (and frankly, the whole year). During the tour, one gets to see more of the Outer Banks than even most locals routinely get to. 

The Parade of Homes is a self-guided tour that allows you to leisurely dawdle at the homes that capture your interest, chat with the builders or Realtors and glean insights and ideas for your new dream home or remodeling project.  Tickets allow you to tour any of the homes on any of the 4 days provided for the event.   So grab your map or GPS and take the tour.   

While you are in Corolla, stop by our featured listing in Monteray Shores at 848 Golden Bluff Way.  It is one of the most attractively priced new homes in Corolla at $399,900.  Ask us about our other OBX new home projects.

The homes are divided into categories.  “The category is determined based on the actual raw cost of the home itself, exclusive of overhead, profit, the lot and any other amenities like landscaping or a pool. Simply stated, it is the amount that it cost for all of the building materials that were delivered to the site plus the amount of money that was paid to our skilled tradespeople to turn the materials into the finished product you are touring,” according the OBHBA. Each participant gets to vote for the “People’s Choice” award in each category as well as the judges selecting their winners.

Unlike other tours or events, the Parade of Homes has something for everyone.  While there are high end luxury homes (who doesn’t want to drool at them); there are also smaller homes.  This year’s event features homes from 1,240 to 10,646 sq. ft.  The tour includes 3 br to a whopping 24 br home!  Even if you do not plan to buy, sell, remodel or build a home in the coming year, it is an interesting event to attend and you may be surprised and be inspired.

Each home is built by expert craftsmen (and women) who know the Outer Banks and the climate and conditions prevalent here.  Over decades they have honed their skills and know what works and stands the test of time.  Our environment can be harsh with wind, sand and water.  Using materials that perform in this environment but are attractive, energy efficient and sustainable are the hallmarks of the homes chosen to be included. 

I find it worthwhile to pay attention to the small details.  While the Outer Banks New Homes are decorated for varied taste, there is always something to be found that can easily be incorporated to your home.  Technology, green materials and innovative products are ever emerging and it is fascinating to witness the new applications and become aware of the possibilities.  

Contact Eillu today if you like to visit the Parade of Homes with one of our Realtors.  It is an excellent way to see what the Outer Banks has to offer and to zero in on what will make your retirement home, vacation home or investment property perform beyond your expectations.  Taking the tour with one of our Realtors allows us to get to know you better, what you like and don’t like, to ultimately find the best OBX home or investment for YOU!

Build Outer Banks Dream Home    


Golfers Delight at The Village at Nags Head – 5 BR, 4.5 Bath Home priced at $479,000

5311 S Chippers Court - exterior

This delightful home is located in the center of the Nags Head Links golf course in The Village at Nags Head.  The location provides exquisite sunset views over the Roanoke sound while being just steps away from the lush greens and fairways on the course. Nestled in a quiet cul-de-sac, this 5 BR, 4.5 bath home is 2,865 sq ft and has something to offer for every member of the family.  The home is attractively priced at $479,000 and located at 5311 S. Chippers Court, Nags Head NC 27959.

5311 S Chippers Court - sunroom

The home is ideal for enjoying the outdoors with 3 levels of decking at the back of the house and two covered deck areas at the front. 

There is a cozy porch or sun room, finished with wood walls, on the upper level that is just begging you to lounge with a good book or break out the game board for a round of Monopoly.

5311 S Chippers Court - kitchen

This home is bright and airy everywhere you look.  The classic white kitchen has an abundance of cabinets and counter space to please every chef in the family.  There is a separate pantry and an island bar area with seating for 3. 

5311 S Chippers Court - dining room

The open concept floor plan includes the generous dining area, with seating for 10, and living room, with couch and loveseat conversation area.  The living rooms has a cozy gas fireplace with TV and media above as the focal point. 

5311 S Chippers Court - living room

It is tastefully decorated throughout with selected coastal details and shades of blue.  Furnishings are comfortable and sturdy with the wood of the furniture matching the window and floor trim in contrast with the clean crisp white walls.

5311 S Chippers Court - foyer

5311 S Chippers Court - master bedroom

Simple design details, like ceiling borders from the bedroom carried over into the bath for a cohesive look and flow.  Four bedrooms have sliders for access to the decks and to take in the outdoor views.

The lower level of the home has a game room with pool table.  The futon provides a relaxing place to sit while watching a match and extra sleeping for additional guests.

5311 S Chippers Court - game room

The hot tub is located on the lower level deck with privacy provided by the oleander foliage that stays green year round but has flowering blooms in the summer.

5311 S Chippers Court - view

Built in 2001, this home has been lovingly maintained and is clean, bright and airy.  Perfect as a 2nd home or a vacation rental with available amenities to entertain every member of the family. 

There are 2 sound accesses and a private oceanfront bath house.  Membership to the Nags Head Golf Links course / clubhouse and the Oceanfront Beach Club with community pool is optional.  

5311 S Chippers Court - ocean

Call today to schedule an appointment to view this terrific property. 

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3 Steps to Buy an Outer Banks Vacation Home

3 Steps to Buy an Outer Banks Vacation Home

Buying an Outer Banks vacation home is easier than you may imagine.  From Corolla to Hatteras and everywhere in between, we have all types of property available.  In fact, the Outer Banks of NC, affectionately called OBX, is one of the best values on the East Coast for vacation homes or investment properties.

Step 1 – Know what you are looking for

A one bedroom condo may be ideal for the retired couple who would like to travel to other locals throughout the year.  There are townhomes, small 2 bedroom beach bungalows and 23 bedroom “mini-hotels” and event locations.  These vacation rentals are perfect for destination weddings and corporate retreats and large extended families. 

One of the hardest steps to complete is to narrow your search and define what you are looking for and why.  This is one of the most important steps.  Without clearly defined goals and objectives there is just too many competing locations and properties.  The choices can prove to be over whelming if one does not have a clear check off of investment priorities.

Reason for Purchase

Your reason for purchasing an OBX home should drive the types of homes you consider. 

A second home only used by the immediate family will only need to include those items to appeal to the family.  Empty nesters may consider a smaller home that can also be used as their eventual retirement home.  An elevator or ground floor living may be desired for aging in place.

A second home used by multiple generations may include more amenities with wide appeal.  A private pool and hot tub may be a necessity in one family but a community pool available would be perfectly fine for another family. 

A legacy home for current and future generations to enjoy is another reason to purchase.  A home in this category is less about fads and amenities and more about family bonding experiences.  It is about quality materials that stand the test of time.  It is having something for each generation to create lasting memories from toddlerhood to grandparents.

An investment property, not intended for personal use, will require having the amenities in demand with vacationers.  It used to be that families came to the beach and creature comforts like air conditioning were not required. 

A game room, theater room, outdoor kitchen are other common amenities one should consider and rank prior to beginning your search.  Creating a list of must have items can reduce confusion after viewing multiple homes with lots of different features and amenities.

For many folks today, renting a vacation home allows them to enjoy comforts not afforded to them at home.  A private pool, hot tub, elevator, game room, outdoor kitchen and bar area at the pool and home theater are only a few of the luxuries sought after.  A modern kitchen with full appliances, washer/dryer, flat screen tv’s, video games are almost considered commodities these days.

Self-manage or hire property manager

The amenities included in your vacation home or investment property should be carefully considered.  Purchasing a home with added amenities not only has an upfront cost but has an additional weekly or annual cost for cleaning and maintenance.  As more amenities are added the complexity of self-managing increases especially if you live remotely. 

Even if you will hire a professional property manager to manage the home, the cost of additional features can negatively affect your bottom line.  One home, I recall, had such a sophisticated smart home system with all audio and visual electronics connected and multiple control points that is was overwhelming for most guests or visitors to operate.  The property management company received a call to re-set the system almost weekly and the home owner incurred higher costs without increased guest satisfaction.  Eventually, he “dumbed” the system down to make it easy for guests to understand and reduce maintenance costs.

Location, Location, Location

Most investors will want to select a location that is within a comfortable drive from their permanent home for their vacation home or investment property.  Locations within 3 – 5 hours are practical should you want to spontaneously visit or should something require your attention. 

For maximum appeal to potential renters or future buyers, look for a place within three hours’ drive of a major metropolitan area (and where you live).  Locations, like Ocracoke Island, that require a ferry to get to the island can limit your accessibility in bad weather or when ferry schedules are reduced.

It is helpful to be familiar with all the towns on the Outer Banks before narrowing down your location.  Each area has its own character and vibe.  The Outer Banks has areas that range from a small town with few vacationers to sleepy fishing village to resort with high end amenities; we have an area that will fit the vibe you are looking for. 

Consider how an area changes with the season

Keep in mind that each of these towns or areas can be very different in the summer compared to winter.  Some of our towns remain vibrant in the off season due to the number of year round residents.

While others can go from thousands of visitors in the summer to a few hundred residents in the winter.  As a result, restaurants do not remain open all season and even the grocery store may not be stocked with your favorite items.

Within each town are usually several environments.  On this barrier island that may only be a mile wide, there is the oceanfront, the sound front and in between. 

The area in between is usually sub-divided to east and west of route 158 or the by pass for locations in Kitty Hawk and South to Nags Head.  The homes located east of route 158, or “between the highways” are a short distance to the beach and a comfortable walk without crossing the highway.  Route 12 runs north to south along the ocean front in this area but is pedestrian friendly compared to the 5 lanes of route 158.

Hire a real estate agent and get out and talk to locals

One of the best ways to answer questions about location is your local real estate agent.  At Eillu, we have written blogs on the various locations in the Outer Banks to give you the inside scope.  You can call or chat with our agents’ real time to answer your questions or go out and visit the locations to compare for yourself. 

Get some unbiased insight from locals if you believe real estate agents just want to make a sale.  Even if you’ve been vacationing in the same area for years, venturing to other nearby towns may provide new alternatives.  Talk to residents while shopping, visiting restaurants to get to know the place from a locals point of view. What do they like about the area, how has it changed, what types of people are moving there and what it’s like off-season. Visit in the off-season and rent a home you are considering purchasing to “try it before you buy it”.  You should have a clear idea of how the area may change from season to season.

Step 2 – How much can you afford?  Get local financing

Financing is available for second home, vacation home and investment property purchases.  Some investors prefer the simplicity of a cash deal and a quick closing but a visit to a local mortgage lender will allow you to obtain a pre-approval and provide a second opinion of how much you can afford.

Typically, buyers will make between 20% to 50% down payment toward the real estate.  Debt payment for all mortgages should be less than 36% of your gross income.  However, rental income from the real estate being purchased can be included when calculating the ratio.

A local mortgage lender should be consulted as they are aware of market conditions, valuations and rental income estimates for the area.

Your Eillu agent will match what you are looking for to the best properties that fall within your budget. 

Understand cost to manage and maintain

Affordability does not only apply to the initial purchase of the home but also to the ongoing cost to maintain and manage the property. 

Make sure you have estimates from local providers for the following.  Do not base the cost of your home market for the same items as there can be significant differences in cost across geographic areas.

  • Utilities (water, sewer fees, cable, garbage, phone)
  • Property Taxes
  • Insurance (Homeowners, flood, wind & hail)
  • HOA fees
  • Winterization
  • Fees for Property Management (usually a percent of gross rentals) or VRBO / Airbnb listing fees
  • Fees for professional services like weekly cleaning, deep cleaning at beginning of season, pool and hot tub cleaning & maintenance
  • Security monitoring
  • Landscaping
  • property repairs and maintenance

The above expenses are deductible if you are renting the home out (your use is less than 14 days or 10% of rentals). 

You may also want to consider a new home.  A home warranty and increased energy efficiency will reduce you costs to manage and maintain while the newness will attract potential renters.

HOA

Understand the amenities offered and the particular rules for the HOA (Home Owners Association) for any vacation home under consideration.  Costs can vary dramatically from one community to the next and you want to make sure you are getting a good value and management team for your dues.  Take note of the condition of the property and ask about any special assessments that may be under discussion or recently approved.

The rules of the HOA will also impact your decision.  Some HOA’s have strict rules regarding materials or colors used when owners are maintaining or improving their home.  These rules can be advantageous to make sure homes conform to a look and style or, depending on your taste, a limit to expressing your personal style.  The rules of the HOA may also limit parking for boats, recreations vehicles and trailers on your property or on community property.  Understanding the HOA rules will let you know if the community is a good fit for you and your family.

Tax Planning – 14 day or 10% rule

You may rent your place for up to 14 days a year and pocket the rental income without having to declare it on your tax return. This is ideal if you want to allow immediate family to enjoy your vacation home and use it as a second home for your family.

If you rent out the home for more than 14 days a year, you must report the income, but you can deduct certain expenses.  You may also depreciate the real estate itself and a separate, accelerated depreciation of personal property such as furnishings.

If your personal use is more than 14 days a year or more than 10% of the time it is rented, whichever is greater, then the home is a personal residence.  If your use is less than 14 days or 10% then it is a rental property.  This distinction is important for tax considerations.

Collect the tax exclusion twice

Vacation home owners whom sell their primary residence can qualify for up to $250k (single) or $500k (married filing jointly) exemption from taxes on the profit from the sale. 

Next, if they make their vacation home their primary home or retirement home after the sale of their primary residence, they may collect the tax free profits again.  They are required to have the vacation home as their primary home for 2 of the 5 years before the sale and the sale must occur more than two years after they previously claimed the exemption.

Step 3 – Buy the best match

Get the Sale Comps and Rental History

Your Eillu real estate agent can provide listings for you to consider based on your investment criteria and your budget.  In addition, your agent can provide recent sales comps for you to compare to any properties you are considering purchasing to assess how good an investment it may be.  Vacation homes in a property management program typically have a rental history to provide an estimate of income and expenses for the property. 

Eillu has over a 20 year history of serving the Outer Banks market and will offer expert advice regarding which property should perform best over time and meet or exceed your investment criteria.

The location of your vacation home is the most important consideration for rental performance, long term appreciation and your families enjoyment.  The location counts more than any other single factor. A vacation home should be a special place with — a view of the ocean, a dock on the sound, or a peaceful deck with the smell of salt in the air.

The Outer Banks rental market continues to be strong to provide income from the investment and enjoyment for the family for years to come. The Outer Banks has been named a top beach destination every year.  For more information on buying Outer Banks Real Estate or to learn more about the Outer Banks in general, please contact us and check out our blog.  We are here to help you make your dreams come true.

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Live The Dream: What is Year Round Living Like in the Outer Banks?

year round living in OBX

I have often heard from vacationers to the Outer Banks how they would love to be able to live here and not just visit on vacation.  Their vision includes a leisurely cup of coffee on the deck while the ocean waves makes music soothing to their ears.   

I also am aware of a few who moved here without understanding what it was like year round and didn’t stay. 

The Outer Banks is unlike any other place in the world.  I will venture to say it is really two places:  the summer place where 250k visitors arrive (and leave) every week and the winter place where 35k residents enjoy the change of seasons.  But, like any location; there are advantages and disadvantages. 

You have come to the right place to get the real scoop.

The Seasons

The summer and winters on the Outer Banks are very different.  Summers can be challenging due to the traffic and number of visitors.  Winters are milder than other nearby locations due to the proximity of the ocean and sound but tend to be very windy. 

Winters do tend to be sunny with a Carolina blue sky that can’t help but to make you smile.  This is contrasted with gray winter skies common in northerner locations.

Average temperatures in the Outer Banks are in the low to mid 50’s during the winter and go up to the high 80’s in the summer.  Ocean breezes in the summer are refreshing.  While northeast wind in the winter can be bone chilling. 

Some folks find winter long and boring.  It really doesn’t get cold until December.  January through March can be difficult for many folks once the holidays are over. 

However, the off-season is when residents get to spend time with each other.  Restaurants are uncrowded and sponsor events, activities, festivals and fundraisers.  The area has some of the best restaurants in the world and it is great to be able to enjoy them without a wait or being rushed.  Entertaining friends at home is fun and helps to pass the winter with lots of laughs.

We do occasionally get snow.  Usually, only a dusting or a few inches.  It is magical and transforms the island beautifully.  From viewing the ocean with snow covering the sand to seeing skiers on Jockeys Ridge or the forested areas covered in snow is just magical.  The snow doesn’t usually last long as the sun or salt makes it disappear within hours or a day. 

Although, I do remember one year when we got more than a foot of snow.  Most towns do not have snow removal budgets or equipment so school was closed for almost a week.  Even the kids were tired of the snow that time.  Generally, Outer Bankers are not good drivers in the snow (but don’t tell anyone I said so).

There are always a few teaser days in the winter where temperatures get into the 70’s and it feels like winter may be over.  They have to be seized when they occur as it is fleeting.  I can also recall a December day where temperatures reached the 80’s and I actually went swimming in the ocean.  These days are gifts to be cherished.

Many people that work and live in the Outer Banks year round do not get to the beach that often in the summer.  It is the busy season and most are busy working.  Even if you are not working, it is likely that your friends are working.  Living here and working here year round means you don’t get to enjoy the summer as much as you expected.

While you may not get to enjoy summer as much as you thought, you do get to enjoy and appreciate the other seasons.  A winter walk on a deserted beach is very peaceful in a zen sort of way.   Winter sunsets and stargazing is absolutely spectacular.  Being able to view and appreciate all the wildlife and beautiful scenery that is the Outer Banks is a gift that never fails to delight.

 It is the slower pace off-season where one can take the time to live in the moment, recharge and appreciate the beauty that is this barrier island.  There is a different rhythm to living year round on the Outer Banks.

Fall is a favorite time of year for many locals.  The weather tends to be warm without the high humidity with nights cooler.  I frequently turn off the A/C for the fall months and enjoy the moderate temperatures and gentle breeze.  The ocean temperatures are still warm enough for swimming.  Summer visitors have thinned and locals can take a breather from long summer working hours.  There are lots festivals, events and activities. 

Spring is a close second for a favorite season for most locals. There are a few days where the pollen becomes thick and will cover furniture with a layer of the yellow stuff if you keep your windows open.  I learned this the hard way after spring cleaning and throwing open the windows. 

Check out this post with 25 reasons to love living on the Outer Banks.

Working or Retired

Employment opportunities are limited in the Outer Banks.  If you are self-employed or can tele-commute than you are truly blessed. 

Many positions are seasonal.  As you can imagine, many jobs revolve around the tourism industry and related services.  Having a year round job is a privilege. 

If you are lucky enough to have a year round job, consider the location of where you live carefully to account for summer traffic and commute time. 

Most jobs here are not highly paid.  Many people will hold down 2 jobs to make enough to survive.  It is a tradeoff for quality of life.

Most year round residents live on the west side of the island.  Vacationers tend to prefer oceanfront so most of these are in a weekly rental program.  Many oceanfront or Oceanside homes are empty in the winter and full in the summer.  If you are living there year round, your “neighbors” will change each week and some may play music loud or have a party. 

Many residents prefer to live where other year round residents live for a community vibe and to get to know their neighbors.  Real estate and rents tend to be lower on the west side of the island with the exception of sound front locations.

If you are retired, you will have lots of opportunities to volunteer or be involved in the community.  No matter what your interest or skill, there are lots of volunteer opportunities in OBX.   Retirees also enjoy many tax benefits in NC; you can read more about that here.

Schools

If you are locating to the Outer Banks with a family that has school aged children, then the school system is very important to you.  The Dare county schools system is highly rated.  Students from Duck to Nags Head and Manteo attend Dare County Schools.  Families with school age children tend to reside in Dare County.

Corolla and Corova are located in Currituck County.  The County schools are located on the mainland and requires a very long bus ride.  There is a Charter School located in Corolla.  Water’s Edge Village School serves students in Kindergarten to 8th grade.  The school has just completed its 5th year and may expand to higher grades in the future.

Location

Location is an important consideration; not just for schools.  Some areas on the Outer Banks are more isolated in the winter than others.  Generally, Duck to Nags Head has more stores, restaurants and activity year round than does Corolla or Hatteras Island.  Manteo is the County seat and has a robust community and year round population.  

Consider these items before selecting the Best Outer Banks Neighborhood for Investment, Retirement or for You and Your Family to Enjoy.

Cost of Living

Housing is the most expensive factor for the cost of living.  Oceanfront real estate tends to be most expensive.  Communities on the west side of the island are an affordable alternative and still places residents only minutes to the beach and the plentiful beach accesses. 

Year round rentals are sometimes difficult to find.  Some vacation home owners will rent their homes as a winter rental but this requires the occupant to move prior to the summer season.

Insurance is more costly than inland areas. Check out these tips for shopping for Outer Banks insurance.  Learn about the types of insurance policies needed for coastal eastern NC.

Property taxes tend to be lower than other areas.  Groceries, gas and other essentials may be marginally more expensive.

Shopping

The Outer Banks has some nationally known shopping available like Wal-Mart, K-mart, Home-Depot, Lowes and Belks.  There are numerous boutique stores for almost any niche.  Nags Head also has an outlet mall featuring top name brands. 

Of course, today in the age of the internet, shopping online and having an item delivered to your home is much more common. 

Some residents prefer to visit Norfolk/Virginia Beach area for shopping or a Costco run.  This is about 1.5 hours away but has a selection of stores and shopping that includes most anything you would need or want.

Healthcare

The Outer Banks Hospital is located in Nags Head and is part of Vidant Health and Chesapeake Regional Healthcare.  It provides urgent care services as well as practicing specialists.  It is also affiliated with the Outer Banks Medical Group which has facilities located from Southern Shores to Manteo and even Avon for convenient access to care.  For even more choices, Virginia is only 1.5 hours away. A list of healthcare service providers can be found here.  This list of healthcare providers includes telephone and addresses and veterinarians.

Crime

The Outer Banks has a low crime rate.  While many areas have a place where it is known not to visit after dark, there is no place on the Outer Banks that I would be afraid to visit at night and alone. 

Pollution

Most people who come to live in the Outer Banks have a love of the ocean and the natural environment.  We wish to protect this environment for future generations. 

Talk of drilling for natural gas, repealing the plastic bag ban or anything that will negatively affect the environment are a sure way to rally public opposition. 

There is not any heavy industry as a source of pollution.  Run off from farms inland has been a concern for the purity of the sound and measures have been put in place to reduce the run off and any negative effects.

Community

The community of residents of the Outer Banks is one of the most supportive I have ever been privileged to know.  Young and old alike are friendly, with a smile or a wave.  Once the crowds thin out after summer, most of the locals are familiar faces around town.  While not all year round residents know each other, I would venture to say we are probably only 2 degrees of separation between any locals with reference to the 6 degrees of Kevin Bacon.

It is common to see a post on social media or from a local restaurant sponsoring a benefit for a resident with a disease or who has suffered in an accident.  The community rallies and everyone does what they can.

The community is resilient.  Neighbors help neighbors without being asked.  After the recent power outage, folks in the northern beaches looked for ways to help the residents of Ocracoke and Hatteras recover their losses.  After a storm or other event, it is likely people will just show up to help.  They may provide labor in the cleanup, food for the workers or supplies. 

The Outer Banks is a small town with small town values.  If you are looking for cultural sophistication, the Outer Banks is probably not for you.  With that being said, there are plenty of artists and musicians that call the OBX home and their contribution to the community is immense. 

The Outer Banks still retains an innocence from another time; it still resembles Mayberry (especially Manteo) where the late Andy Griffith resided.  From the annual Saint Patrick’s Day parade to fundraisers like the Festival of Lights, there is an active and vibrant community that cares about each other.  I think this is becoming rare in most places. 

The Outer Banks of NC has a different rhythm and pace over the course of a year.  It is not right for everyone but it is perfect to us that call it home.  I am happy to have raised my kids here and I know the spirit of the ocean will always be with them. 

I know that no matter where they choose to live the sweet carefree days at the OBX beaches will always be pleasant memories.  I hope to stay here, retire and be able to provide the same kind of memories for my grandchildren. 

 If you are considering purchasing a retirement home, an investment property or a permanent move check out how OBX compares to other resort areasSchedule an appointment today to visit available homes or get familiar with each neighborhoods unique vibe to find the best place to locate for the good life!

Eillu relocation guide to Outer Banks


How Much Real Estate should be Included in Your Portfolio?

Diversify Investments – How Much Real Estate should be Included in Your Portfolio

With the stock market recently reaching a record breaking level at 22,000, you may be looking for other investment alternatives.  Real estate is an important element for a diversified portfolio.  Most individual investors do not consider real estate when allocating assets among investment alternatives.  However, North American pension funds, insurance companies and high net worth individuals allocate from 8.5% to 24% of their portfolio to real estate assets.  Globally, the allocation of real estate is higher at 32%.

Real estate has low correlation to stock market

Real estate is an important element for a diversified portfolio.  It is relatively stable and has a low correlation to the stock market.  Real estate is part of a long term strategy for investment performance.  Typically, holdings should be kept for 5 years or more.  Real estate is not as liquid as stock investments but is more stable over time.

How about REIT’s?

Real estate investment trusts (REIT) are one form of real estate investments that are more liquid since some REIT allow redemption prior to the fund being liquidated in 5 to 10 years.  Many experts would argue that REIT are more a component of your stock portfolio than holding real estate since they behave and correlate more like a stock.  I would suggest these investments more appropriate for an investor that seeks a more passive real estate investment.

Millennial’s & Home Ownership Rates

The American dream of home ownership is alive and well.  The US Census released the 2nd quarter 2017 home ownership rate at 63.7%.  Households ages 65 and older have the highest rate at 78.2% while households under 35 have the lowest at 35.3%. 

The under 35 age group is one of the largest age groups in recent history and will likely drive demand for housing in the decades ahead.  The Millennial generation (75.4 million) has overtaken the baby boomer generation (74.9 million) as the nation’s largest living generation.  The millennial generation is projected to peak at 81.1 million in 2036.  This group is increasing purchasing real estate and has generally skipped purchasing a starter home to find a home they can hold for a longer period of time. 

What about your personal residence?

Most experts agree that your personal residence does not count as a part of your real estate allocation for your investment portfolio.  The main reason is it is not disposable.  Should you sell, even if you realize a large gain, you will still need to most likely reinvest the gain in a new home to maintain the same standard of living. 

A vacation home that is treated as an investment can be considered part of your real estate allocation for your portfolio.  The operating income from the vacation home provides partial liquidity and appreciation can be a significant portion of your total return.

Seller gains highest since 2007

According to ATTOM Data Solutions, homeowners who sold in the 2nd quarter 2017 gained an average price appreciation of $51,000 since purchase.  This is the largest average price gain for home sellers since the recession. The last time appreciation was this high was 10 years ago when sellers made an average profit of $57,000.

Time to rebalance and diversify?

Now that the stock market has reached a record high level, it may be time to look to re-balance your portfolio and include more real estate.  Like the saying goes…”buy low and sell high”. 

Selling excess stock assets to create the proper portfolio balance can fund the down payment required for a real estate investment.  Add this to a mortgage on the property to leverage “OPM” or other people’s money will magnify your returns. 

So, if you put 20% down and the price appreciation on the real estate is only 3% per year, you realize a 15% cash on cash return.  In only 5 years you can double your equity.  In addition, the operating income you receive from the rentals will push your returns higher. 

Vacation rental property also has some favorable IRS tax rules for deductions that can complement your tax planning efforts.

Vacation rental demand

Real estate markets are very local.  The Outer Banks market is a strong vacation rental market.  Many investors continued to hold investments through the downturn and had a full summer of bookings.  For some folks, the summer beach vacation is as necessary as breathing.  While an investor could add real estate to his portfolio with purchases in the same market where his primary residence is located, diversifying to an outside market area provides a better hedge and less exposure to a single market.

Tangible asset

Investing in a vacation home is real and tangible.  It is a source of pride, a place to visit and a place to make lasting memories with your family and friends.  Stocks are not nearly as satisfying; even when increasing.  After all, you don’t even get a stock certificate any more.  It is just blips on a computer screen or digital device. 

Real estate investing also provide a level of control and self-direction not realized in stock investments.  You are the master of your own destiny and your actions will have an impact on your success.  What improvements will you make to the property and what amenities will you include to attract guests? As a stock investor, you have little control over the direction and decisions made by the management of the companies you invest in.

Technology improves vacation rental management

Technology and new platforms like VRBO and Airbnb allow vacation rental investors to have more control over their investment without the use of a property management company.  Smart home technology, like keyless entries or HVAC monitoring, can provide peace of mind even when the owner is a distance from the property.  Of course, vacation rental owners can still employ a property management company to be more hands off and passively manage the investment. 

What percentage should real estate occupy in your portfolio?

Unfortunately, I don’t have a magic number or percentage of what should be invested in Real Estate for every investor.  It will vary by age, risk tolerance and the degree to which you are willing to work the real estate. 

Gains can be impressive and one should at least have a nominal percentage of assets, like 10%, in real estate not including their primary residence.  For investors who are more aggressive and will actively manage their vacation rental properties, up to 30% of their investment portfolio should be in real estate to maximize gains.

The Outer Banks has a diversified group of vacation rental housing and even commercial properties.  Homes available range from 1 bedroom condos to 24 bedroom homes and everything in between.  There are also co-ownership homes and time shares, town homes, patio homes.  The barrier island features the sound to the west and the Atlantic Ocean to the east, so every location is just a short distance to the water and recreation.  The Outer Banks has consistently been named in “top beaches” lists year after year.

Let Eillu Real Estate Agents help you find the perfect Outer Banks investment property.  Find the best neighborhood for you and your family, investment objectives or vacation rental.  Wiggle your toes in the sand and get positive cash flow from Outer Banks investment property.  Best of all, create memories to last a lifetime. Schedule an appointment today!

vacation home locations compared from Maine to Florida; charts and statistics


Case Study: New Home Sold and New Homes for Sale in Corolla, NC

Corolla new homes sold and currently for sale 2016 to 2017

Overview of Corolla New Home Sold 2016 – 2017

Viewing recent sales of new homes in Corolla that have sold reveals some interesting facts. There were 14 new homes sold in 2016 and 2 in 2017. The average new home sold price over this period was $761,288 with a median sale price of $421,450. On average these homes were 5.5 bedrooms and 4.6 baths. The average cost per square foot was $231.43 with a median cost at $191. These homes spent an average of 115 days on the market before they were sold.

Villas at Corolla Bay – Sold Out

Digging a little deeper reveals a slightly different picture. 8 or half of the total sales were in the same community of the Villas at Corolla Bay. This gated ocean side new community in Corolla was a hit with buyers and just hit a sweet spot. Each villa was 4 bedrooms and 3.5 baths. The quaint community boasted an amenity area with a swimming pool, bath house, shuffleboard, basketball court, horseshoes and a picnic area for large gatherings. Each villa has its own courtyard, some with private pools and hot tubs. The villas are a short walk to the beach and popular as vacation rentals earning approximately $42,400 per season. The average cost of the villa was $412,950 with half selling for $399,900. The villas ranged from 2,231 square feet to 2,270 with a cost per square foot averaging to $181. Buyers certainly recognized what a value these villas are nestled in this charming community. On average the homes were on the market for 143 days.

Whalehead Sold

Whalehead is an older established community in Corolla with 3 main streets that run parallel to the oceanfront. The community has public beach access but no community amenities or association fees. This community is popular for vacation rentals and features generous lots with many homes having a private pool and hot tub with only a short walk to the beach access. Even today, there are lots available to develop your dream home at the beach.

At the other end of the spectrum compared to the Villas at Corolla Bay, there were 3 homes sold for well over $1m in the Whalehead community of Corolla. Two of these homes were located on the oceanfront street of Lighthouse Dr and sold for $2.3M. All 3 homes were almost 6k square feet had 11 bedrooms and 11 baths and a private pool. Cost per square foot ranged from $308 to $393. Only one home listed annual income at $252,230.

A summary of the Corolla New Homes Sold Statistics appears in the chart below:

Corolla New Homes sold 2016 to 2017

New Homes for Sale in Corolla

There are currently 17 new homes for sale or under construction in Corolla. 12 of these listing are on the westside contrasted with only 3 listings in the sold group located on the westside as discussed above.

The average price of all homes is $902,776 with the median value at $649,900. The average square footage of new homes is 3,051 with the median square footage at 2,625; the average cost per square foot is $269 with the median cost at $232 or approximately a 16% increase in cost compared to last year new homes sold. The average number of bedrooms has increased from 5.5 in the sold group last year to 5.7 this year, and bathrooms increased from 4.6 to 5.1.

Villages at Ocean Hill

There are 4 new homes for sale at the Villages at Ocean Hill. This well-established community at the northern most end of Corolla has loads of amenities for vacation rental guests and owners. There is a fitness center, swimming pools, basketball and sports playground, tennis courts, snack bar, and beach rentals. Not limited to the westside of the island, enjoy days at the beach with your very own private parking lot and 7 beach access walkways.

Learn why Villages at Ocean Hill is such a great value in our earlier post. These Villages at Ocean Hill new homes are 3 to 4 bedrooms with 1,514 to 2,409 square feet. Prices range from $349,800 to $455,000.

Monteray Shores

There are 3 new homes in the Monteray Shores community. This distinctive community provide a dash of color to Corolla with the French Caribbean design style and you can read more about it here and here. It has a well-managed HOA with plenty of amenities for vacation rental guests and owners to enjoy. Monteray Shores new homes available range from 2,087 square feet to 2,809 with two listings having 4 bedrooms and 1 with 7. Prices range from $399,900 to $795k.

Soundfront at Corolla Bay

A brand new community located on the Sound front in Corolla is the Soundfront at Corolla Bay. This exclusive and prestigious community will have only 76 large, private sound front and semi-sound front home sites where homeowners will be amazed at the breathtaking sunsets over the Currituck Sound.

The community features soundside piers, sidewalks, street lights and an Oceanside beach access with parking and a bath house. Click here to view a map and details on the community. There are currently 2 new 5 bedroom homes available at $649.9k and $799.9k.

Currituck Club

Probably best known to golfers, the Currituck Club is not only about golf. This community is all about outstanding amenities and providing an upscale experience to both owners and vacation rental guests. To find out more about each community within the Currituck Club, the amenities and cost, read this post and see how it compares to other communities in the area.

There are 2 new homes available in The Cottages portion of the Currituck Club and one in the main community. Prices range from $429k to $749.5k for 1,917 square foot to 3,310 square foot.

Ocean Side Corolla New Homes

There are 5 Oceanside new homes in Corolla in 3 different communities. One is in Pine Island and you can read more about this community here. Two are in Whalehead and two are in Ocean Sands. Prices range from $859 in Pine Island to $2.699k in Whaleshead. These homes have from 6 bedrooms to 12 bedrooms with just over 3,045 square feet to 6,000 square feet. Cost per square foot ranges from $282.10 to $449.83.

A summary of the Corolla New Homes for Sale Statistics appears in the chart below:

New homes for sale in Corolla, NC

Schedule an appointment today to view Corolla New Homes for sale. There are many homes and communities available and one may be the special one you have been searching for. Call 252-491-9999 today to view any available property. There is time to close and enjoy our wonderful fall season. These homes are perfect for a second home or vacation rental investment!

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