There’s something remarkably comforting about driving around the Outer Banks and seeing new homes popping up like daisies after a spring shower. OK–maybe that’s an exaggeration, but new home construction is definitely on the rebound.
Hard numbers are a little difficult to come by–there is no consolidated list of all the towns and counties in the area, but just looking at all the lots being cleared and talking to builders, it’s apparent things have improved dramatically.
Will it get back to where it was seven or eight years ago? Probably not, according to a number of builders. They point out, with good justification, that there just aren’t that many open lots left, especially in Dare County. Farther north, up in Corolla, there are more lots available, and that’s where we’re seeing some of the larger developments go forward.
What does all this mean? Anything having to do with investments and real estate has a certain amount of guess work involved, but some educated speculation is legitimate.
Because of the limited supply, we’ll probably continue to see lot prices increase, although it is difficult to predict what that rate of increase will be. As lot prices increase, the value of the lot in some cases–especially with older homes–will become greater than the value of the building itself, and we will begin to see the demolition of older houses, with a new home in its place. As one builder remarked to me, “What was new and modern and great in 1980 is completely out of date now.”
This latest round of building has some interesting characteristics. Although most of it is in large scale developments and the upper end rental market, there is also a significant portion designed for second home and residential use–an indication that people are feeling more confident in the direction of the economy
A number of builders interviewed felt very strongly that building costs are as low as they’re going to be right now. After four or five years of minimal construction, the labor pool is just getting back to work and wages reflect that. As local construction continues to expand the competition for skilled labor is going to drive costs up.
Additionally, materials are coming out of a downtime and competition and inventories will also drive up the cost of that.
Finally, those same builders pointed out that construction costs three and four years ago were often artificially low in an effort to build something.
There are probably more good options for homebuyers and investors interested in the Outer Banks market than there have been for years. Very good quality new homes are coming on the market, there’s a good supply of reasonably priced properties available and lot prices and building costs make building your own home a very real possibility.
Here at Brindley Beach we know this market like no one else. We know the builders, we know the properties, we know the homes. If you are thinking about investing in Outer Banks property or are looking for a second home, call us at 877.642.3224 or online at www.brindleyobxsales.com