The state of housing on the Outer Banks: Part One – The Coastland Times

There’s been a lot of talk about the housing crisis on the Outer Banks. Does that mean that there aren’t enough housing units, or that they’re too expensive? How much does it cost to live here? What is “affordable housing,” anyway? And is anybody doing anything about it?

This three-part series about the current housing situation on the Outer Banks will attempt to answer some of these questions. This article – the first of the three – will deal with the cost of housing and availability, and how we got here. Part Two will look at the attempts by our local government and private investors to provide housing, and Part Three will delve into the effects on individuals and commerce if we don’t solve this problem.

My family moved to the Outer Banks in the fall of 2020. Interest rates were low and houses were staying on the market for a mere few days, sometimes hours. With the prices people were willing to pay, those with long-term rentals were selling them and making a big profit.

With five children, my husband and I needed to find a house with at least three or four bedrooms and a decent sized living area, and based primarily on just his income. A house with a big yard came on the market, and we jumped on it, closing in early spring 2021. Three months later, Zillow estimated our house was worth 25% more than when we’d bought it. It was a crazy time nationwide for the housing market. We were thankful we’d found our home when we did.

If a family of seven were looking for a house today, they would be facing a ticket price upwards of $600,000 for a 2000 square foot house anywhere on the Outer Banks. This would have been an impossibility for my family three years ago.

Even for young couples or small families, the very cheapest home available (excluding condos or manufactured homes) is about $375,000. This is for a 2-3 bedroom home with 1000 square feet. There are a few of these available on the Outer Banks, mostly in Colington Harbour.

Assuming a 7% interest rate, a $375,000 house would mean a monthly payment of $2,311. That might be feasible for some people, but that’s assuming you have 20% to put down (or $75,000). I don’t know how many young families have that kind of down payment.

If you only have a $5000 down payment, that payment bumps up to about $3000 per month including taxes and mortgage insurance.

How much do you have to make to be able to spend $3000 a month on mortgage?

The conservative 28% debt-to-income ratio calculator assumes an income of $155,000 a year to purchase a $375,000 home. Some finance experts use 36%, so that would put an annual income of at least $120,000.

And that’s for the smallest, cheapest single-family home on the Outer Banks.

A slightly larger modest home (1500 square feet) starts at around a half of million dollars.

So if you’re a single person, young couple just starting out, or if you have children and are surviving on one income or paying exorbitant childcare costs, you might be thinking, “Ok. So, home ownership is out.”

Let’s look at rentals.

I scoured the internet and called rental companies and looked at Facebook housing groups.

The top of the Google search when I looked for long-term rentals was Sun Realty. They have a dedicated long-term rental manager. That’s a great sign!

I called up Chieftain Conant, who has been with Sun Realty for three years in that position, and asked about rental opportunities.

There was one year-round rental available. One. A three-bedroom house for $2825, plus utilities.

“We’ve only had five vacancies in the last two years,” he said. Conant said prior to peak season, he received about 20 calls per week from people looking for rentals.

And he’s had to stop taking names because there were just too many people looking.

Conant said an average monthly price for a two-bedroom rental is over $2000; but three years ago that price was about $1500.

When asked what I should do next, he referred me to Colony Realty or a local Facebook group.

I called up Colony Realty and spoke to co-owner Julia Head. They had zero rentals available. She said they’ve rented about six or seven properties in the last year. When a listing comes available, they put it on Zillow. “Depending on the price, we might get 50 inquiries about it,” she said.

Her advice to those seeking housing is: “Look elsewhere. And any property manager is going…