According to Park Service reports,
each year several million people visit the Cape Hatteras National
Seashore! Quite a few choose to spend some of their well-deserved
vacation time talking with us about real estate in Hatteras Island's
seven villages. While each person's needs and interests are different,
a number of surprisingly similar questions arise during these conversations.
Some of the most frequently asked questions are presented below.
We are just starting to consider buying property. Do you have any
recommendations for a game plan?
Hatteras Island is a very special place, and each of its villages
has its own novel charm. My advice is to visit each of the villages,
drive around, and let your feelings be your guide. Usually, one
or two areas will appeal to you more than the others. Once you find
the location that feels right for you, then start to clarify price
ranges that meet your criteria and zero-in on the perfect property.
What does real estate cost on Hatteras Island?
There are properties to meet just about every need and every budget.
Be aware that prices may vary among the villages.
- Oceanfront homes are priced from $275,000 to $1.6 million.
Lower priced homes usually have erosion concerns.
- Current asking prices for oceanfront lots begin around $245,000
and peak at $750,000
- Oceanside and soundside lots start around $19,900, and cottages
range from $99,000 to $980,000.
- Soundfront homes cost $189,000 to $1.5 million.
- Soundfront lots are available for $109,000 to $599,000.
- Canalfront homes reflect asking prices from $219,000 to
- Depending upon location and size, condominiums range in
price from $109,000 to $450,000.
When annual rental income is taken into account, the cost of
owning a cottage on Hatteras Island can be surprisingly affordable.
How has the Hatteras Island real estate market performed over the
past few years?
Over the long term, the real estate market on Hatteras Island has
rewarded property owners with attractive returns on their investments.
As the real estate market has weakened, the average selling prices
of houses and undeveloped lots have declined. I am reasonably confident
that at this time we are within the bottom range of the market cycle
and that the stage is being set for the markets next movement upward.
|Hatteras Island Average Selling Prices
Q. Is it better
to buy an existing cottage or to purchase a lot and build?
A. There is no one
answer to this question that is right for everyone. Some feel more
comfortable with the construction process than others. My general
advice is that if you find an existing home that you really like,
go ahead and purchase it. If none of the homes you see is truly
what you want, then buy a lot and build a home that reflects your
While there are a number of variables to take into consideration,
in todays market, the cost of purchasing an existing home is just
about the same as the cost of buying a lot and building a new home.
Q. If I should decide to
build a new home, what can I expect it to cost?
prices for new homes are currently about $115 to $125/sq. ft. A
complex design and upgraded features can raise the cost of construction
even higher. The cost of the lot, furniture, and any amenities would
be added to reach the total price. We have well-qualified builders,
and the North Carolina building code for coastal properties is considered
to be quite strict.
Q. How difficult is it to
obtain financing for real estate purchases on Hatteras Island?
A. For qualified
buyers, financing is available through a variety of lenders. At
the end of summer, 30-year fixed-rate mortgages were available with
interest rates as low 3.625% as with the payment of one point or
You should be aware that underwriting standards have increased
across the spectrum of loans, especially for loan amounts over $417,000
and for unimproved lot loans.
Q. What role are foreclosures
and short sales playing in the Hatteras Island real estate market?
A. The number of
foreclosure sales and short sales certainly bears watching both
for its influence on our local market as well as being a measure
of the effectiveness (or ineffectiveness) of governmental and private
efforts to stem the tide of families losing their properties. Fortunately,
the number of new foreclosure filings on the island was 55 percent
lower during the 1st Half of this year compared to the same period
in 2011. Through the end of June, foreclosures represented about
23 percent of residential sales, and short sales (situations where
the mortgage balance is more than the value of the property) accounted
for 21 percent of sales. In total, 44 percent of all residential
sales were distressed properties.
While comparatively small in terms of absolute numbers, the presence
of foreclosures and short sales in the market, combined with an
excess of supply in relation to buyer demand, have contributed to
a decline in selling prices. Purchasing foreclosed properties and
short sales can be more challenging that a traditional purchase,
so be sure to seek the assistance of a real estate agent who is
familiar with these types of transactions to guide you through the
Q. How does it work if we
want to rent our cottage when we are not using it ourselves?
A. There are professional
real estate firms on Hatteras Island, which for a fee will provide
a comprehensive property management program. Services include advertising
your cottage, scheduling rentals, cleaning, maintenance and all
necessary accounting. Once you make the decision to rent, they will
take care of just about everything else.
Oceanfront and soundfront houses generally rent for 25 to 28
weeks per year with some select homes exceeding the 28 week performance.
Soundfront properties will rent a few weeks less. Oceanside and
soundside cottages usually experience somewhat fewer rental weeks
depending on their distance from the water and the amenities that
are offered. Prime waterfront properties have the highest occupancy
rates and generate the greatest rental incomes.
Q. How difficult is it to
get flood insurance on Hatteras Island?
A. There should
be little, if any, problem getting flood insurance coverage for
most properties on Hatteras Island. In fact, there are some locations
in which flood insurance may not be required. Flood insurance is
available through both the National Flood Insurance Program (NFIP)
and private insurance companies.
You should also be aware be aware that there are some areas on
the island where flood insurance offered through the National Flood
Insurance Program is not available. This is an important fact to
know when purchasing a home, since the cost of private flood insurance
can be substantially higher than the cost of an NFIP policy.
Q. What is the current situation
concerning the availability of water and sewage services?
A. The Dare County
Water System provides central water service to all villages on the
island, although private wells are still in use in some locations.
A new central water system for Rodanthe, Waves and Salvo was completed
in 1996, and a reverse osmosis plant in Frisco provides water service
to the southern villages.
Private septic systems are the standard method for waste disposal
on Hatteras Island, although at least one community has a central
sewage treatment facility.
Q. How many year round residents
are there on Hatteras Island?
A. The 2010 census
results indicated that the population of Hatteras Island is 4,322
compared to 4,001 in 2000. In 1990 the census reported 3,814 island
residents. The populations by village were reported as: Rodanthe,
Waves, and Salvo 624; Avon 777; Buxton 1,526; Frisco 891; Hatteras
Q. It is my impression that
Hatteras Island experiences severe weather. What can you tell me
about weather conditions?
A. While it is true
that Hatteras Island from time to time does experience severe weather,
if you think about it, so does just about every place else in the
country! The perception that we get more than our fair share may,
in part, be the result of the prominence of Cape Hatteras as a geographic
landmark and the fact that it is frequently used as a reference
point by weather forecasters. Statistically, the experts say that
on average the Outer Banks will experience weather that has the
potential to cause damage about three times a year. A study by the
National Oceanic and Atmospheric Administration estimated that,
based on historical records, a major storm strikes the island about
every eleven years.
The weather on the island is normally quite pleasant. We get
generous amounts of rainfall. The wind averages about 11 mph, and
the average temperature is a comfortable 69. Believe it or not,
according to National Weather Service records, the official temperature
on Hatteras Island has never reached 100! The highest temperature
ever recorded was 97. Constantly changing weather patterns are a
part of life on Hatteras Island.
From my perspective, the number of warm, sunny days and star-filled
nights far outweigh the concerns created by the strong storms that
have been a fascinating part of the islands history.
Q. Is now a good time to
A. After experiencing
double-digit rates of appreciation for several years, the average
selling prices of properties have declined substantially as they
have across the country. Prices on Hatteras Island offer a very
strong value relative to other resort areas along the east coast.
This is an excellent time to be a buyer on Hatteras Island. Both
interest rates and prices are low a combination that does not often
exist. Interest rates remain at historically low levels, and the
average selling price of residential properties has declined about
44 percent since 2005, making homes more affordable. A fairly large
supply of cottages for sale means that a good selection of properties
is available for buyers consideration.
Opportunities in the market for unimproved lots are even more
compelling. Since peaking in 2006, the average selling price of
lots has declined more than 76 percent, and lot prices are continuing
to trend downward.
All things considered, there are encouraging signs that our local
market is on the road to recovery.
- The average selling price of residential properties is moving
closer to the historical growth curve that we saw prior to the
- Supply/demand curves are starting to trend slowly toward
each other after being relatively flat for a few years.
- The number of sales of both homes and lots is starting increase.
- We are even beginning to see multiple offers on very competitively
When all is said and done, there is no place like Hatteras
For a more detailed discussion of these questions and a broader
range of issues, you may wish to consider the
Free Special Reports which we offer.