Outer Banks Real Estate

Alan Greenspan says farewell - hikes rates again

The Federal Reserve met today - and Alan Greenspan is retiring after 18+ years on the job.  Ben Bernanke will take over the post as of February 1, 2006 and he is not expected to make any major changes.

The Federal Reserve raised short term rates another .25% today to bring the short term overnight lending rate to 4.5%.  Prime for most banks is usually 3% higher than the fed rate - and most Home Equity Lines of Credit are based on prime. 

The good news is that it looks like there is an end in sight to the increases.  One more is anticipated at the end of March and then we might have a little break.  I have seen a few forecasts with prime being reduced in the third and fourth quarter of the year. 

What this means to Outer Banks Real Estate is that as the rates continue to increase, the purchasing power is diminished. 

Outer Banks Beach Nourishment Vote

The vote for the referendum on the sales tax is February 7, 2006.  Polling centers are open for those that would like to vote early.  The way the ballot reads migh be confusing -

A vote yes will repeal the sales tax and in essence will be a vote against beach nourishment.

A vote no will leave the sales tax in effect and will be a vote for beach nourishment.

Here we go...

Outer Banks Beach Nourishment Public Forum

The Outer Banks Concerned Citizens for Beach Nourishment are sponsoring a public forum on Beach Nourishment.  Presenters will discuss and show the beach nourishment project in Virginia Beach and there will be time for questions following the presentation.  The keynote speakers will be:

• Richard Maddox - City Councilman, City of Virginia Beach
• Phil Rhoers - Coastal Engineer, City of Virginia Beach
• Randy Wright - City Councilman, City of Norfolk

Date:  February 1, 2006

Time:  7:00pm

Location:  First Flight High School Gymnasium

Realtor to the Stars

I read an interesting article in LA Curbed about Elaine Young, the "Agent to the Stars".

My favorite is the testimonial given by her ex-husband

Elaine is the hardest working real estate agent on the face of the planet. She will drop anything and run to take care of a client’s needs, no matter what she is in the middle of at the time. I saw her in action about 13 years ago and since then we have become great friends. Keeping up with Elaine is almost impossible and I know this because after trying to keep up with her, I once went to Africa for two years, just to get a rest. I attribute that fact to the reason we got divorced. I now completely understand how and why she works so hard. She simply likes it.

You can visit her website and see an amazing list of celebrities that she has helped with Real Estate Transactions. 

National Association of Realtors publish report on Technology

The National Association of Realtors released a survey about how buyers use the internet to purchase a home.  The numbers are pretty amazing when you look at the last ten years.

In 1995, 2% of home buyers used the internet to search for a home.

In 2005, 77% of home buyers used the internet to search for a home.  The yard sign came in second in 2005 with 71% of buyers getting information on an available property. 

I think the Outer Banks Real Estate Market numbers are even higher than the national average.   Many buyers consider the idea of purchasing a second home while on vacation, but much of the legwork is done online after their trip. 

Real Estate Blog from a New York State of Mind

Found a Real Estate Blog from a couple of appraisers from New York that understand their market.  Good information for anyone that has an interest in Real Estate. 

A southern perspective for all of you folks in New York, BBQ is not something you do, it is something you eat. 

Outer Banks Bloggers

CNN / Money published an article on Real Estate Blogging.  It seems that Realtors are grasping the concept and running with it.

The Outer Banks has a handful of Real Estate Bloggers and there are quite a few local OBX Blogs that cover a wide variety of topics and interests on the beach.  I plan on adding a list of Outer Banks Blogs soon. 

FHA loosens rules

The Washington Post published an article about the loosening of regulations on FHA Loans.  The article states that FHA has reduced some of the requirements that made their loans less desirable than conventional loans.  Two rule changes that will really help are the elimination of the Well and Septic system inspections. 

While the loan limits will probably not help anyone looking for financing on the Outer Banks, it should help in the surrounding counties. 

The other side of Beach Nouishment on the Outer Banks

After my last post with Bill Pitt and Beach Nourishment, I had a comment posted and an email from Ray Midgett who is the president of Beachhuggers which is a group he organized to stop Beach Nourishment on the Outer Banks. 

We spoke at length and he sent me a lot of material as to why beach nourishment is not a good idea.  Too much for this post, but I will try to add a few notable points. 

Here is an interview he did with a Old Dominion Student:

1.  Describe the origins of the beachhuggers.com organization.

I, personally have followed the beach nourishment issue here on the Outer Banks for years; and especially since the Army Corps of Engineers' (ACE) proposed project data was released in 1999. That study was commissioned via a $1 million grant from the Outer Banks Tourist Bureau.  When ACE presented the proposed $72 million, 14-mile project, our local board of commissioners appointed an ad hoc "beach nourishment committee" to seek federal/state funding for the project.  I, as well as others, were opposed to the project from the onset, with the main reasons being, (1) nourishment would ruin the natural beauty of the Outer Banks seashore, (2) nourishment will not be successful or cost-effective for our high-energy beaches, and, (3) finally, public funds should not be used to such a large extent to protect private oceanfront investments.

When it became apparent the federal government was not going to provide funding and the county went to the State for financial assistance to 'go it alone' it was time to act.  This resulted in local politics at its worst.  Special interest groups began running 'economic scare tactic' ads in local newspapers.  "Come see our beaches disappear," they said.  Aided by these groups (builders/realtors/restaurant/motel associations), the commission majority (who , themselves, own extensive oceanfront/beach investments) weeded out funding sources such as additional land transfer taxes, additional occupancy taxes, additional meals taxes (which investors and tourist would pay) and, instead allowed the general assembly to grant an increase in our sales tax.  This increase of 1% would make Dare the only one of 100 NC counties with an 8% tax.  An regressive tax, it would fall harder on locals, and especially the working class.

At this time, July 2004,  Ray Midgett of Southern Shores and Barbara Noel of Kill Devil Hills, set up the internet website and began attending/speaking at local gov't meetings in an effort and plea to get leaders to "listen to the public."  At no time has any of our local city/county officials held a 'two-way' public input meeting regarding the beach nourishment issue.  Instead, pushed by the special interest groups, and led by commissioners with extensive business interests on the beach, they have tried to push beach nourishment down our throats.

2.  How many members are involved in the movement?

BeachHuggers is very much a 'grassroots' group.  I hesitate to call it an organization.  We have about 300 strong supporters on our email lists; have had many contributors who have made very small individual contributions to help pay for bumper stickers and newspaper ads; and had about 250 workers who gathered over 5,000 signatures (in three weeks) calling for a referendum to repeal the  1% sales tax.  All of this work/communication was done via email/telephone.  In the entire time BeachHuggers has been in existence, we have had one meeting. Astounding!   It shows just how unified and how opposed people here on the Outer Banks are about beach nourishment.

3.  Do you feel that just Nags Head pursuing beach nourishment as opposed to Dare Co. is a victory for the cause of your organization?

The real victory is that it is becoming clearer every day that the people of this nation are tired of pouring money into the ocean for ill-fated beach nourishment projects.

The cry from proponents that the War in Iraq, Homeland Security, etc. is robbing them of funding, is hollow.  It is an excuse to keep their effort alive. The days of massive federal funding for beach nourishment is winding down.  And, small local governments and strapped states cannot pick up the slack.

In some ways, the predicament that Dare Co. is in, is a small victory for BeachHuggers.  However, saving our natural beaches is still a struggle.   And, Nags Head has already placed unsuitable material on our beaches on two occasions in the past. Now, they are planning what I call  "ranch-style beach nourishment."  It is "long and lean"; too much beach (10 miles) and too little sand (1/2 of  what ACE planned).

We firmly believe that the voters/residents of Nags Head cannot financially stand to pay the cost ($27 million) for its own project. The sand will disappear before the debt can be paid.  A 30% increase in their ad valorem taxes, plus additional assessments, plus more sales tax; will place an undue hardship the very families that are finding it harder and harder to live here every day.  For this reason, we believe they will vote down the referendum planned for November 2006.

4.  Will your organization offer the same resistance to the Nags Head Board of Commissioners as it did to Dare. Co. Board of Commissioners; i.e., speaking/advocating at council meetings?

Yes, definitely.

5.  If the referendum to raise sales tax one percent was put up for
public vote, as Nags Head intends to do, do you feel the measure would pass?

The referendum to "repeal" the 1 % sales tax will be held countywide in February 2006.

The referendum to borrow $27 million in bond/debt will be held in Nags Head in November 2006.

We feel confident both measures will fail.

6.  Give your input on why Dare Co. at large is not moving forward, but
Nags Head is.

Dare County government is not moving forward, mostly, due to of lack of funding.  In addition, this has become a very complex and muddled issue.

The Army Corps' project is now 6 years old. More studies/permits may be needed.  Its original estimated cost has moved from $72 million to $100+ million.  Several million has been spent on lobbyists, securing easements, Washington trips (junkets), etc.  The original beach nourishment committee has been disbanded.  A new seashore commission (made up of local mayors) has been set up.  After five meetings, it is stumbling and doesn't understand its mission or goals.  During last weeks elections, voters threw out three of the six mayors (members).  Opposition here has gained ground.  The county's intent of already having hired a 'paid director and staff' for their beach nourishment effort  is now on hold. In short, they are starting to see the writing on the wall.

7.  Add anything you would like to say here:

Without doubt, if the current makeup of our county board of commissioners (7 members) did not contain members with such extensive business interests on the beach (estimated at over $50 million) one would hear very little about beach nourishment. It has become a very tiring topic here on the Outer Banks. One commissioner (Cheryl Byrd) resigned from the board two weeks ago, citing "board disfunction" as her reason.  One of the main problems, she said, "the board has spent too much time on the beach nourishment issue (she is an opponent).

In November of 2006, voters will have the opportunity to replace three of the seven county commissioners.  One can expect that beach nourishment will play a large part in this process.  Stay tuned.    ----------   Ray Midgett

Ray is very passionate about the beach and the Outer Banks.  He told me that he is an environmentalist from the get go.  He would like for the Dare County Board of Commissioners look at beach nourishment from an environmental aspect instead of just a financial decision.  He spends a lot of time on the beach and speaks to many visitors who don't want the beaches changed.  If you have any questions for Ray, please send him an email: obxsaltydog@charter.net  He will be glad to share with you information he has assembled on this project.

Stan Riggs - a well known geologist from East Carolina University will give a presentation about the barrier islands:

The date is January 16th, 2006 at 7:00 p.m. at the Jockey's Ridge State Park auditorium in Nags Head.  Dr. Riggs is one of the foremost experts on barrier islands and has studied their formation and movement for more than 40 years. He brings a wealth of timely information critical to the current discussion of how our communities will respond to the growing challenges of our unique coastal environment.

Pro editorial for Outer Banks Beach Nourishment

Bill Pitt wrote an editorial in this weeks version of the Outer Banks Sentinel about the need for a Beach Nourishment Project on the Outer Banks.  Bill is a respected leader on the Outer Banks and I have had the pleasure of working with him in the past. 

Pitt: Protect what we have

Interested in what happens to the economy and scale of development in oceanfront communities that have been impacted by storm damage, I have been trying to keep track of the action on the Gulf Coast of Mississippi as a result of Hurricane Katrina.

In the Gulfport-Biloxi area virtually the entire tourism industry was destroyed in the storm. In response to the devastation the governing bodies in the area, including the state legislature have provided legislation to permit moving the casinos onto land. Plans have been laid to construct an entire new tourism industry infrastructure to include a minimum of 30,000 new hotel rooms, a 600,000-square-foot convention center, and as many new or upgraded activities and attractions as possible, all supported by a $20 million annual marketing program. The intent is to transform the now-devastated area into a premier "Tier One" Tourist destination by 2010. Now that will be re-development!

This is in sharp contrast with what has happened in communities that have been fortunate enough to have Beach Nourishment Projects in place. Spencer Rogers' (North Carolina Sea Grant) research demonstrates that oceanfront communities protected by beach nourishment projects suffer much less storm damage loss than do unprotected communities.

It is unlikely that we will suffer the same scale of catastrophic loss as the Mississippi Gulf coast. Our loss of oceanfront has been much more gradual. It has taken over 50 years to accumulate the current level of loss (the total assessed value of the Kitty Hawk oceanfront is now about $60 million, compared to more than $450 million for the same length of oceanfront in Kill Devil Hills).

If we do nothing to protect ourselves we will eventually reach the point where we have to make the decision to either re-develop or abandon our more severely threatened beaches. Human nature being what it is, that decision will be to re-develop, and that the scale of that re-development will be significantly greater than our current scale.

Protecting what we already have will go a long way towards preserving our existing scale of development. Despite statements that we are "over developed", our current scale of development is something worth preserving. There isn't any other way of protecting what we already have other than beach nourishment.

-Bill Pitt, Kill Devil Hills

courtesy of the Outer Banks Sentinel

I think we need beach nourishment.  The proposed method of payment is the best way to share the burden of protecting the beaches.  The current proposal has a 1 cent sales tax to fund the program - at least the 250,000 weekly visitors will help defer the costs.  I have heard estimates that a local family of four should have to pay around $200 per year in additional taxes.

The opponents believe that we should not have a nourishment program - and they are trying to get the one cents sales tax overturned in January.  If that tax gets overturned, the only option for the government is to add to our current real estate tax.  That would shift a very large burden to the homeowners in Dare County.