Online Access Signals Changes in Outer Banks Vacation and Real Estate Market
Just about everyone is glad to see 2020 gone. There is little doubt that a pandemic unlike any that has been seen for over 100 years, is an experience that no one wishes to repeat. The disruption of our daily lives, the uncertainty…all of it, makes everyone glad 2020 is in the rearview mirror.
But like most things that happen in life, the full story is somewhat nuanced. Some unexpected things have occurred that need exploring, and the Outer Banks economy falls under that heading.
The Outer Banks just had the best year it has ever had for visitation.
Several indicators make that point. Jockey’s Ridge State Park in Nags Head and Cape Hatteras National Seashore recorded strong monthly gains in almost every month from June through November. The numbers that are perhaps most significant for us here at Carolina Designs are the Gross Occupancy figures from the Outer Banks Visitors Bureau that records economic activity for Dare County.
The occupancy numbers through November are available, and they tell a remarkable tale. If no one rented a home in December, Dare County would still have the best year it has ever had by 10.5%
That extraordinary influx of visitors has accelerated some trends we have seen for some time.
“I think we’re seeing with the pandemic, many more people on working vacations, or students taking online classes. That was [happening] pre-COVID, but since COVID, it has increased everywhere,” Carolina Designs Customer Service Director Evelyn McDonald said. “I’ve been here for almost 23 years and I don’t recall nearly as many people concerned about internet speed. Specifically stating that they’re working or teaching classes.”
In 2020 more visitors are integrating work into vacation schedules.
“People are looking for a way to go out, get into a new environment. They get the work done in the morning and then they can spend some outdoor time with their kids if they are bringing their kids down,” Monica Thibodeau, Managing Partner of Carolina Designs said. “Or just having the opportunity to get away from the four walls of their house.”
This past year, though, something new was added to the mix. It’s unclear if, going forward, that will continue to be part of the Outer Banks vacation experience. Still, there was an unmistakable trend toward extending time away from home for as long as possible.
“Folks were looking for a little longer stay. Some were people looking for a month at a time, which is about as long as we can do with the short-term rental,” Monica said.
The desire to extend time on the Outer Banks took some unexpected turns.
“I did see a lot of folks that had a week, and then said, ‘Where can I extend’ or ‘Can I pop over to [another property].’ We definitely saw a lot of that,” she added.
That trend toward wanting to spend more time on the Outer Banks takes more than one form.
Real estate sales have recorded numbers not seen for years. According to the Outer Banks Realtors Association MLS information, residential sales were up 44% over 2019—the most sold since 2005.
There does not seem to be any one factor creating the surge in home sales locally. Certainly, the record number of visitors this year, including a historic surge in first-time vacationers, is part of the equation. Broker Gray Berryman, one of Carolina Designs’ most experienced real estate agents, sees other factors as well.
“In the last three or four years, I’ve helped more families move to the Outer Banks with kids. That did not happen from 2008 to 2017…So this remote working, it didn’t start with the pandemic. But I think the pandemic has accelerated it,” he said.
Gray points to what may be a significant shift in why people are purchasing homes on the Outer Banks. He talks about a couple he has recently been helping who originally planned to buy a retirement home here.
“They put that on hold,” he said. “They are now putting their house in a metropolitan area in North Carolina, on the market. They’re going to sell it, and they are moving to Corolla to live permanently. They understand…it’s a resort place, it’s not necessarily a year-round place, it’s 45 minutes from the hospital and all that.”
To this couple, though, the Corolla atmosphere combined with the ability to work online meets their needs. They told Gray, “We still need to be in North Carolina, and be able to drive to the city to do some things once a month or once every two weeks. But there is no reason for us to live in this large home. We want to be at the beach. And we can do that with remote work now.”
It is a process to get to the point that a couple or family will purchase a home they can work remotely from, but it is a process that Gray has seen numerous times.
“The vacation rental property gives people a chance to dip their toe in the water of remote work. To see if they like it, see if it works,” he said.
There is, however, one difference in why or how people are purchasing Outer Banks homes this year. It’s still too early to say if what we are seeing is a trend or a one-year phenomena.
“This year, more than ever, people bought houses and pulled them out of the rental program, or did not rent when in the past, the new owners would definitely rent,” Gray said.
“Purchasing a home that had been available for short-term rentals and taking it out of the rental program is not a simple process,” Monica cautions.
“We’ve had a number of properties sell at the end of the year that folks don’t want to rent,” she said, noting there are requirements in the Vacation Rental Act that must be fulfilled. “The new folks buying this house, if they want to use it themselves and they’re not interested in the rental, they’ve got to honor the rentals for 180 days or make arrangements to work around those obligations.”
It is possible that there will be an effect on the availability of homes this coming year and perhaps in the future. “The rental market itself, it’s just super strong—so you take out some homes…we’re going to break some hearts,” she said.
It underscores a point that Carolina Designs has often suggested to our guests—book as early as possible for the best selection and to know that a home will be ready for your vacation.
“Our occupancy numbers are way ahead of last year, and this of course, is pre-pandemic. The appetite for coming down here is just super strong,” Monica said.