Ghost of Blackbeard
Is Dare County really a “ghost town”? Yahoo Finance seems to think so, but I’m not sure I agree with their assessment.
Yahoo Finance recently ran an article about American Ghost Towns of the 21st Century, and they included Dare County at #6 on their top 10 list. Sure, the Ghost of Blackbeard lives here, but a ghost town?!…I beg to differ.
Here’s what Yahoo Finance had to say about Dare County:
6. Dare County, N.C.
Number of homes: 33,492
Vacancy rate: 57%
Dare County includes the northern-most parts of North Carolina’s Outer Banks. The situation in the vacation area is so severe that the “Outer Banks Voice” recently wrote, “If Dare County Manager Bobby Outten was intending to sound an alarm by suggesting that the EMS helicopter and school nurses were expendable in the next budget, he probably succeeded.” His comments are unlikely to be terribly different from those of other executives of counties on the list. Vacant homes and homes which lose double-digit amounts of their value each year irreparably undermine the tax base. And, as services fall, fewer potential homeowners will consider investing in the area.
My first point of contention is that they don’t understand the location of Dare County. They mention that it includes the “northern-most parts of North Carolina’s Outer Banks.” This is clearly an error. The northern-most parts of the OBX belong to Currituck County. This could be considered a minor error, but to me it calls into question their research as a whole.
But the bigger issue I have is that despite the fact that they mention that Dare County encompasses the Outer Banks, they don’t seem to understand the relevance of this fact. The Outer Banks is a tourist destination with a large amount of vacation rental and second homes. Yes, there are a large amount of vacant homes on the OBX, but that is because they are not primary residences. We should expect vacation homes to be vacant for a large percentage of the year.
The article seems to argue that the economic/housing downturn has hit Dare County harder than other areas, and as a result, home values are falling, services are falling, and fewer buyers are interested in the area. This seems like a big jump in reasoning. Yes, the housing downturn has affected the Outer Banks (like every other US market), but I would argue that as one of the strongest vacation rental home markets, the Outer Banks is more insulated from the downturn than most areas. We’ve mentioned a few articles on this blog that indicate that the vacation home/2nd home real estate market is increasing in strength; here are a couple examples:
The article mentions, “Some of the affected regions are tourist destinations, but much of that traffic has disappeared as the recession has caused people to sell or desert vacation homes and delay trips for leisure. This makes these areas particularly desolate when tourists are not around. The future of these areas is grim.”
Wow, quite an alarmist perspective. The Outer Banks has always been quiet in the offseason. The past few years have not been more quiet than usual, and definitely not “grim.” And as for in season, the OBX is gaining strength, not losing it.
As an industry, vacation rentals are making large gains in the travel market, and 2011 is starting very strong for OBX vacation rental homes with significant improvements over 2010…and 2010 was a strong year. We’ve mentioned a few articles that indicate the increasing strength of the vacation rental industry, and here are a couple examples:
This does not indicate a declining real estate market to me, and especially not a “ghost town.” And the March 2011 MLS stats seem to agree with my perspective.
Yes, Dare County has budget issues (like most US cities/states right now), and yes, unemployment is high (like the entire US), but this Yahoo Finance article strikes me as inaccurate. Dare County has a large amount of absentee owners and as a result, vacant homes during a large part of the year, but vacant homes in a vacation market do not necessarily indicate a “ghost town.” Yahoo Finance needs to reach past the statistics to understand the market as a whole. I would invite Yahoo Finance to visit the OBX July 4th weekend and tell us it’s a ghost town.