Here is our third monthly installment of The Seaside Report, and it is great to have such positive information to share. 2012 is starting off great for the Outer Banks real estate market.

Before I dive into the report, here’s a quick recap of what The Seaside Report is and why we’re offering this monthly report about the Outer Banks real estate market.

The main economic driver on the Outer Banks is real estate, and to meet the need for a detailed analysis of the current OBX real estate market, including the often ignored, but incredibly important, vacation rental market, we have created the monthly “Seaside Report.”

We have combined the forces of both sides of our business – Outer Banks real estate sales with Coldwell Banker Seaside Realty & OBX vacation rentals with Seaside Vacations – to bring you the first report to offer a comprehensive view of the OBX real estate market – real estate sales & vacation rentals.

As investors, homeowners, and vacationers, we need to understand the full picture of the Outer Banks real estate market to ensure we are making educated decisions, and our hope is that The Seaside Report will help develop this full perspective.

As always, we appreciate your input, and we encourage you to leave your comments below. We are happy to address any questions you may have, and we are always interested in suggestions for improvement.

Outer Banks Real Estate Sales
(Data Source: OBAR)

As I mentioned, 2012 is off to a fantastic start for the OBX real estate market. In fact, the numbers for the Month of March are the best since October 2005! Overall sales are up 25% and listing being placed under contract are up 11%.

Year-to-Date Sales

• Overall – up 25% (471 units vs 376 units)
• Residential – Up 21% (363 units vs 300 units)
• Land – Up 40% (98 units vs 70 units)
• Commercial – up 67% (10 units vs 6 unit)

Year-to-Date Under Contract

• Overall – up 11% (569 units vs 511 units)
• Residential – up 1% (436 units vs 431 units)
• Land – Up 32% (121 units vs 92 units)
• Commercial – Up 100% (12 units vs 6 units)

Inventory:

• Overall, inventory has declined by 3% when compared with inventory in March 2011.
• Residential inventory declined by 7%.
• Commercial inventory declined by 8%.
• Land inventory increased by 4%.

Distressed Sales:  (Distressed = Bank Owned and Short Sales)

• Distressed sales remain at 13% of the active inventory.
  • Distressed sales have maintained this approximately this level for the last 12 months.
• However, distressed property sales only made up 25% of the total sales volume in March 2012, compared to 44% in February 2012 and 37% in March 2011.
• The sale of properties listed as short sales declined to 11% of all sales, and the sale of bank owned properties declined to 14% of all sales; for a total of 25% of all sales.

Top 5 Outer Banks Real Estate Firms Year-to-Date

Average Booking Window  Outer Banks Vacation Rental Market 
(Data Source: NAVIS GeoAnalytics)

Legend: 2011;  2012

This graph demonstrates the average number of days between booking and check-in date. This graph is summarized by month of booking, rather than month of stay.

For example, the reservations made at this time of year are about 105 days in advance of their check-in date. This booking window has dropped by 35 days from February. Considering that the summer is the busiest time of year on the Outer Banks, this decline in booking window makes sense. We should continue to see this booking window decline as we approach the summer months.

The takeaway message is that guests should book early for summer months in order to reserve the most desirable homes and weeks – at this point, about 105 days in advance, but that window is declining every day as we approach the summer months.

The Seaside Report: Average Booking Window – March 2012

Seaside Report: Average Booking Window – YoY Variance – March 2012

Average Length of Stay
Legend: 2011;  2012

The Length of Stay graph illustrates the average number of days between check-in date and check-out date of reservations, summarized by check-in month.

As would be expected for the Outer Banks, the average stay is about seven days for the summer months and varies in the shoulder season.

A strong takeaway here is that full weeks are a must for the summer months, but Spring and Fall offer great opportunities for shorter stays and discounted rates, while maintaining the great benefits of gorgeous weather, empty beaches, and ample attractions and activities.

Although, it is interesting to note that there is a small spike in September. September is usually considered the start of the “shoulder season,” with guests traditionally taking advantage of the flexibility to take mini-vacations shorter than 7 days. It is encouraging to see guests staying for 7+ days in September.

Seaside Report: Average Length of Stay – March 2012

Seaside Report: Average Length of Stay – YoY Variance – March 2012

Average Stay Value
Legend: 2011;  2012

The Stay Value graph illustrates the average revenue actualized or projected for reservations, summarized by check-in month.

The clear message with this graph is that demand is high and supply is low during the summer months, and as a result, prices are driven higher during the summer months. As mentioned above, Spring and Fall offer great opportunities for shorter stays and discounted rates, while maintaining the great benefits of gorgeous weather, empty beaches, and ample attractions and activities.

July is the clear peak, and prices begin to fall towards the end of August – when kids go back to school.

It is interesting to note that the stay values are slightly higher for 2012 compared to 2011. This seems to signal that discounts are less likely for 2012.

Seaside Report: Average Stay Value – March 2012

Seaside Report: Average Stay Value – YoY Variance – March 2012

Bookings
Legend: 2011;  2012

The Bookings graph illustrates the number of reservations actualized or on the books, summarized by check-in month.

This graph gives a good view of the “strength” of the reservations over the previous year. Reservations are up, which indicates that early reservations are wise and prices should remain constant.

A couple points of interest; June is very strong over last year (+29%), but July is slightly under-performing in comparison to 2011. This will be a trend to keep an eye on. August and September are also up slightly from 2011, and there are still a few months to go.

In general, bookings usually increase right up to the summer check-in days as last minute vacationers scramble to find available homes. July bookings should catch-up, and we should continue to see a strong growth in the remaining months ahead.

Seaside Report: Bookings – March 2012

Seaside Report: Bookings – YoY Variance – March 2012

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