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In addition to Real Estate news, you'll find information on mortgage rates, Outer Banks events, news and all things Outer Banks!

Dec. 9, 2014

Things to Consider before Buying a Second Home on the Outer Banks

Whether you’ve been coming to the Outer Banks for a number of years, or you’re a relatively new convert, you’ve finally been seduced by the allure and peacefulness that emanates from the Outer Banks and have decided to purchase a second home on one of the islands.  Great Idea!  Where else can you find miles of sandy beaches, an abundance of water sports, great local seafood and a tranquil atmosphere all within a relatively short drive of some major metropolitan areas? 

But before you start your search, here are just a few things to consider:

·         *    Ocean or Sound.  Life on an island means that access to water is always close at hand.  Most people think of the ocean when they think of a second home, but living close to the sound has advantages as well.   If you have only one week a year at the beach, then proximity to the ocean is key.  However, since you’ll now be a regular on the OBX, the sound might be something to consider.  Water sports, less vacationers and potentially lower price points are just a few of the advantages.

·         *    Condos vs Single-Family.  There are some real benefits about owning a condo, especially if you live more than a few  hours away from the OBX.  However all too often people see the high monthly fees associated with condos and run the other way, failing to consider that those fees often cover all exterior maintenance, insurance and amenities. Talk to your Realtor about the benefits of owning a condo before ruling it out.

 *     Insurance.  Most people think flood insurance when they buy a coastal property, but wind and hail tends to be the larger ticket item.  Talk to your Realtor about what you can expect.  Flood insurance is available through the NFIP for most properties, but you’ll want to understand what is important to ensure your premiums are reasonable.  Read Understanding Flood Zones Before You Buy for more information on affordable flood insurance.

·    Most importantly, sit down with a knowledgeable Realtor and discuss your lifestyle, what’s most important to you in regards to your second home, and the pro’s and con’s of the various communities so you can ensure you find the perfect spot to relax and enjoy all the Outer Banks has to offer.

 

Posted in Real Estate News
March 5, 2014

Pea Island Bridge Project Set to Begin

The permanent Pea Island Bridge project is finally set to begin.  The contract for this project was awarded in November 2013 to Parsons Construction Group Inc of Greenville SC with a total cost of $79.7M.  The bridge replaces the temporary bridge put in place after Hurricane Irene cut an inlet across Pea Island.  Scheduled opening of the new bridge is set for Spring 2016.

Posted in Real Estate News
March 5, 2014

House Passes Homeowner Flood Insurance Affordability Act

The Homeowner Flood Insurance Affordability Act (HFIAA) passed the House of Representatives last night with a vote of 306 – 91.  This is phenomenal news for both potential and current owners of property located in a coastal flood zone.  The Senate is expected to vote on the bill by weeks end.

The main provisions of this bill include:

  Reinstating “grandfathering.  In essence, properties built to code in the past won’t be penalized with catastrophic rate increases due to remapping

  Implementing caps on rate increases.  Most individual property rates cannot increase more than 18% per year.  There are also new protections for newly mapped properties

  The repeal of certain rate increase triggers.  Among other things, ensures that no new policyholder will experience dramatic rate increases from the sale of a home

To address the issue of liquidity of the program, the HIFAA will implement a $250 surcharge for second homeowners and a $25 surcharge to primary residents.  And while detractors of the bill suggest this will not go far enough, the non-partisan Congressional Budget Office says that the house bill would have zero impact on the financial solvency of the NFIP and will pay for itself over the next decade.

As background, the National Flood Insurance Program was founded in 1968 for the purpose of enabling property owners in participating communities to purchase affordable flood insurance.  However, massive claims payouts, largely due to Hurricane Katrina in 2005, put the program more than $24 Billion in debt, and thus in 2012, The Flood Insurance Reform Act, also known as Biggert-Waters was passed to try and stabilize the program.   This bill subsequently had severe unintended consequences, creating skyrocketing premiums for even modest homes with little risk of flooding. 

Posted in Real Estate News
Dec. 4, 2013

Bonner Bridge Closed

The NC Department of Transportation closed the Herbert C Bonner Bridge yesterday afternoon due to safety concerns after routine scanning of the bridge identified areas where too much sand had eroded from the support structures.  The Bonner Bridge originally opened in 1963 and was said to have a 30-year life span.  Funding for the bridge has long since been approved, and in August 2011, NCDOT had awarded a contract to a design-build team to replace the bridge.  However, a series of legal challenges has left the project in limbo.  Preliminary estimates suggest a 3 - 4 month period for the repairs to be completed.  NCDOT has declared a state of emergency to help expedite the repairs.  The Southern Environmental Law Center has been behind the legal challenges that have prevented the start of the new bridge.  Call them at 919-967-1450 if you are a concerned citizen!  Or visit their website at http://www.southernenvironment.org/

Posted in Real Estate News
Nov. 27, 2013

How Rising Interest Rates Affect Your Purchasing Power

Just one year ago, interest rates, which had been at historic lows, began to rise, and only recently leveled out and even dropped a bit.  While the Wall Street Journal claims that higher interest rates are causing only minor slowdowns in market demand, even small interest rate increases will affect what you can afford.

As a buyer, you’ve probably calculated your mortgage price range based on your desired new monthly payment.  However, higher interest rates probably mean the house you’re looking at may have a higher monthly cost than you were anticipating.  For example, a $300,000 mortgage at 3.5% one year ago would have had a P & I payment of $1.347.  That same mortgage today at 4.5% would cost you $1,520 or nearly 13% more. 

If you are like most buyers, you may need to decrease your targeted price range in order to compensate for the higher interest rates.  However what makes it even harder is that real estate prices in the Outer Banks are increasing, so a home that you might have been able to buy for $375,000 a year ago will likely be more expensive just one year later.  

If you are in the hunt for real estate in the Outer Banks, you might not want to wait much longer.  This combination of rising home prices and rising interest rates may hinder your ability to find the ideal property. 

Coastal Outer Banks Realty can help you find the right property at the right price and we’ll work with you throughout the process, including helping you find the right lender.  Call us today at 252-489-2140!

Nov. 19, 2013

Understanding Flood Zones BEFORE You Buy...

Living in the Outer Banks has many pleasures and benefits, but coastal living also comes with challenges.  If you’ve been shopping for a coastal property, whether for a full time residence or second/investment home, you’ll have heard terms such as flood zones, base flood elevation (BFE) and the national flood insurance program (NFIP), most of which probably never came into consideration during previous home buying excursions.

The reality is that flooding is a challenge for any community located near a body of water, whether it be a river, stream or ocean.   Surprisingly, the majority of flood insurance claims come from inland flooding compared to hurricane and storm related claims.  That’s because some communities, like the Outer Banks, have strict building codes in place that help protect property owners in the event of a storm.  Homes built on pilings, elevated structures and hurricane rated or impact resistant glass are just a few of the features you might find with construction on the Outer Banks.

Flood Zones

Not surprisingly, every property in the Outer Banks is in a special flood hazard zone or SFHA.  However, just because your property is in a SFHA does not mean it will be in imminent danger of flooding.  

There are three (3) flood zones in the Outer Banks:  X, AE and VE.  And to complicate matters further, there are a few spots in the Outer Banks (for example the 4-wheel drive area of Corolla) that also fall under the Coastal Barrier Resources Act, or COBRA. Flood insurance through the NFIP is not available in these areas, so make sure to discuss the ramifications of buying in a COBRA zone with your REALTOR®  before signing on the dotted line. 

X.  An X flood zone is about as good as it gets, because properties located in X flood zones are considered at minimal risk of flooding.  This also means that your lender will not require flood insurance, although we encourage all Outer Banks homeowners to carry it.   Additionally, the building codes for X flood zone properties allow for living space on the ground floor, offering a nice convenience for homeowners.   If you’re lucky enough to find a property in an X flood zone, great.  However, don’t let this be the driving force behind your decision.  There are plenty of high-elevation, properly built homes in AE flood zones that will keep you high and dry as well.

 AE.  The majority of properties in the Outer Banks fall into AE flood zones.  According to FEMA, properties located in an AE zone will have an annual likelihood of flooding of 1% (assuming they are at or above base flood). When in an AE flood zone, BFE, or Base Flood Elevation becomes an important factor.   For example, if your home is located in an AE flood zone with a BFE of 9, the first habitable living area should be 9 feet above base flood.  That said, if the property you are considering is in an AE flood zone you should be aware that your flood coverage begins on the first elevated floor of your property.

VE.   The majority, if not all, oceanfront properties fall into the category of VE, although some sound front properties, especially on Hatteras Island, can fall into this category as well.  VE flood zone properties are at higher risk from rising waters and wind driven wave action, which generally translates to a higher flood insurance premium.  However, as is the case with AE zones, your premium will be a factor of the elevation of the property among other things.  If you are considering buying a VE flood zone property, the higher the elevation of the property the better positioned you will be in terms of storm protection. 

The National Flood Insurance Program

The National Flood Insurance Program was founded in 1968 for the purpose of enabling property owners in participating communities to purchase affordable flood insurance.  Flood coverage through the NFIP is available up to $250,000 and premiums will be determined on some of the factors noted above.

 

To be sure, flood zones and flood insurance can be quite complicated.  Additionally, Hurricane Katrina and most recently Hurricane Sandy have put a strain on the program, and changes are coming.   If you are interested in learning more about flood insurance and flood zones, and want to understand how they might affect your home purchase, please give Coastal Outer Banks Realty a call at 252-489-2140.  We pride ourselves on our knowledge of the Outer Banks market and will work with you to find the ideal property that meets your needs.  In the meantime, stay tuned for “Questions to Ask Your Insurance Agent”.

 

Posted in Real Estate News
Nov. 11, 2013

Outer Banks real estate statistics through September

Real Estate sales in the Outer Banks* remained fairly static in 2013 compared to 2012 for the period of January - September.  This was a bit of a surprise given that interest rates remained at historic lows.

The average price for a residential property through September 2013 was $358,913 compared to $358,842 in the prior year.  For lots and land, the volume of transactions was slightly higher, however, the average price for a lot fell approximately 2% from prior year, from $107,371 in calendar year 2012 to $105,144 in calendar year 2013.  Commercial sales, like the lots and land category, had a few more transactions than the prior year but a lower average sale price.

The good news is that both the second and third quarter of 2013 outperformed the same periods from the prior year.  Unfortunately the increased sales were not high enough to offset the slow start in the first quarter.

 

*These statistics exclude the following counties: Beaufort, Bertie, Camden, Chowan, Craven, Gates, Hertford, Hyde, Martin, McDowell, Pasquotank, Perquimans, Tyrrell and Washington and the following towns/cities/communities: Columbia, Creswell, Edenton, Elizabeth City, Hertford, Knotts Island, Plymouth and Williamston

Oct. 5, 2013

How To Choose Between Two Houses You Love

When you’re shopping for a new home, you typically have your fingers crossed that you’ll find that perfect home that meets all or most of the points on your checklist. But what happens if you find two “dream” homes? Choosing between two homes you love can be incredibly challenging, especially in today’s fast-paced housing market where homes are getting snatched up quickly, leaving you with little time to make a decision.

The first thing you need to remember is that buying a home isn’t a decision that should be guided simply by emotion. You’re going to be living in the house you choose for years to come, and chances are you’ll be making payments on it for a long time. This has to be a decision that is guided by logic and clear thinking (with some emotion of course!).

But when you have two great houses to choose from, how can you determine which one is right for you? It all comes down to making the right comparisons between the two homes. You’ll want to compare:

  • The price—You have a budget to consider, and the last thing you should do is overextend yourself financially just because you want a particular home. Spend some time carefully reviewing your budget, and make sure the homes you’re considering fit within that price range. You should also make sure each home is priced fairly. Compare each home to other recently sold comparable homes in its area to ensure pricing is correct.
  • The neighborhood—Location is everything, and your neighborhood will have a huge influence over your lifestyle. Every neighborhood is different – even if they are located only a few miles apart. Consider the features of each neighborhood to find the one that best suits your family. Maybe one neighborhood has a park and another one doesn’t. Or maybe one of the neighborhoods has better access to restaurants and shopping or closer proximity to schools.
  • The crime statistics—Crime is always something you should look at before buying a home. You don’t want to spend your hard-earned dollars on a home only to find out it’s located in an area where break-ins and other crimes are the norm. You can easily research crime statistics online, or you can speak to the local police department to find out more about the crime in a particular neighborhood. And if you have time, you might even consider a drive through the neighborhood after dark.
  • The school districts—Whether you have school-aged kids or not, you should still research the schools in the areas of the homes you’re considering. If you have kids, you obviously want to make sure they’ll be able to get a great education. If you don’t have kids, you still want to buy a house in an area with good schools because it enhances the value of your home.
  • The potential for appreciation—When you buy a house, you’re making an investment, so it’s important to determine which investment has the best potential to increase in value. If one of the homes is located in a neighborhood that’s on the upswing while the other is in a neighborhood with declining values, you’d probably want to choose the former.

Looking for your dream home in the Outer Banks? Coastal Outer Banks Realty can help you find the right home for you and your family. Visit www.coastalouterbanks.com today for more information!

Posted in Real Estate News
Oct. 3, 2013

Why Are Mortgage Closing Costs Increasing?

Whenever you get approved for a mortgage, you have to pay closing costs. These are fees that lenders and various third parties charge when you purchase your home. Closing cost fees typically include attorney’s fees, loan origination fees, inspection fees, appraisal fees, title fees, and various other costs that can really add up. In most cases, it’s the home buyer that’s responsible for paying these fees, but in some situations, the seller may pay a portion of the costs. Closing costs are certainly a nuisance for buyers, but they are something that must be accounted for when shopping for a new home.

Recently, there is evidence that the average closing costs charged by mortgage lenders has increased in 2013. According to Bankrate’s annual closing cost survey, closing costs in 2013 are about 6% higher than they were in 2012. The bulk of this increase is related to fees charged directly by the loan originator rather than third parties. Excluding third-party fees, loan origination fees were over 8% higher than last year.

Experts point to a number of causes for high closing costs

Of course, these sharp increases in closing costs have left many buyers and sellers asking why. What has changed over the past year to lead to such a significant jump in closing costs? Experts point to a few different causes.

Perhaps the simplest explanation is that lenders are charging higher fees simply because they can. Right now, the market is seeing some of the lowest mortgage rates in history. As a result, buyer demand is sharply increasing. Since more people are interested in buying homes, lenders don’t have to fight as hard for business. Consumers are coming to them in droves, and because of this huge demand for home loans, lenders are able to hike up their fees and take advantage of buyers.

The other issue is that lenders realize these historically low interest rates aren’t going to last forever. That’s why they are increasing their fees now so they can generate as much money as they can before the rates start to climb in the coming months and years. In short, lenders are trying to get as much money as they can while the getting is still good.

Another possible reason for the increase in closing costs from lenders is that banks are facing increased expenses as they implement new mortgage regulations from the Consumer Financial Protection Bureau. The cost of compliance with these new rules is expensive for lenders, so they are increasing their fees to help absorb this cost.

Don’t expect high fees to last forever

The good news is that the increased closing costs we’re seeing right now aren’t expected to last forever. As interest rates start to rise in the coming months, you can expect to see lenders competing with one another for business by lowering their closing cost fees. They will have to do this in order to attract more business in the ever-changing marketplace.

Of course, you should always shop around and compare fees from lenders to make certain you get the very best deal when taking out a loan for a new home.

If you’re thinking about home in the Outer Banks, let the experienced, knowledgeable team at Coastal Outer Banks Realty guide you through today’s changing market. Visit www.coastalouterbanks.com today for more information!

Posted in OBX Mortgage Rates
Sept. 25, 2013

2013 On Pace for Lowest Foreclosure Total in 6 Years

Calendar year 2013 is on track to end with the fewest foreclosures in a year since 2007. At the monthly average pace of foreclosures through July, the number of completed foreclosures is expected to reach nearly 490,000 by the end of 2013. That’s nearly 27 percent less than the number of foreclosures in 2012, and it would be the fewest foreclosures since 2007, when more than 400,000 homes were foreclosed on by banks.

Since foreclosures peaked in 2010 at 1.05 million, they have steadily declined. Experts attribute job growth, low mortgage interest rates, and a recovering housing market for the trend in declining foreclosures.

Even better news – the number of homes headed toward foreclosure is also declining. In July, lenders initiated the foreclosure process on just over 60,000 homes. That’s a 38 percent decrease from the same time last year, according to RealtyTrac.

In many states, foreclosure activity levels are at or below where they were before the housing crash. Simply put, it’s further evidence that the housing market has stabilized and the foreclosure problem in most markets is finally nearing an end.

What It Means For Homeowners

Clearly, the drop in foreclosure activity is good news as more people are getting to keep their homes, but what are some of the other benefits of this development? How does a decline in the number of foreclosures help the average person?

If you’re a homeowner, you should be elated by this news. For years, the high number of foreclosures has had a negative influence on home values. Numerous studies have shown that foreclosures cause local property values to decline. In fact, each foreclosure leads to a drop of around 1 percent in the worth of other homes in the area. The Center for Responsible Lending estimated that foreclosures cut home values by about $1.9 trillion from 2009-2012.

Why do foreclosures cause home values to decline? There are many reasons, including the fact that a foreclosed home will sell at a low price, thereby dragging down the value of other nearby homes; abandoned homes make neighborhoods less appealing; and abandoned foreclosures often attract vandalism and other crime activity.

Simply stated, if you own a home, rejoice. Foreclosures will have a diminished impact on the value of your home as this trend continues.

What It Means For Buyers

What does the decline in foreclosure activity mean for house hunters? The news might not be quite as bright if you’re looking to buy a home.

First, fewer foreclosures means fewer available homes on the market. With a limited selection, finding your dream home can prove more challenging.

Fewer available homes also means greater competition between buyers. Long gone are the days when you could sit back and wait for sellers to drop their prices to meet your budget. Now, we’re headed toward a seller’s market where homes are getting snatched up at a much quicker rate.

Of course, all of this means one thing – homes are being listed at higher prices than in recent years. With fewer foreclosures dragging down prices, a limited inventory of houses for sale, and a greater buyer demand than we’ve seen in years, it all adds up to higher listing prices.

Are you looking for a home in the Outer Banks? Coastal Outer Banks Realty can help you find the right home whether an investment, primary residence or second home. Visit www.coastalouterbanks.com today for more information!

Posted in Real Estate News