It is one of the shortest streets in Southern Shores’ Chicahauk neighborhood. Just two houses on one side and two on the other. Host of a sudden burst of activity proved highly unusual for a Sunday.

Cars crept by. SUVs stopped in the grass. Neighborhood walkers gawked. Not even nightfall could stop the surge, as flashlights pierced the darkness.

In this housing market, everybody flocked to see this new listing: A three-bedroom, 2,000 square-foot home built in 1987 in a great neighborhood – being sold “as is.”

“It was exhausting. I would say in 72 hours I probably fielded 100 calls,” says Kathy Bowman Sawyer. She’s an associate broker with Village Realty of Corolla. She listed the home on Grey Squirrel Lane. “I know I had over 50 showings in three days. they were pretty much from 7 or 8 a.m. until dark. And there were multiple offers as well. I expected it to be busy, but it was non-stop for three, four days.”

Does A Real Estate Bubble Exist?

Like seemingly every other home on the Outer Banks with a realtor sign in front of it, that one is under contract. Another record-setting sales year seems inevitable when the final numbers get tallied at the end of December, which begs the question on so many minds in so many cities across the country:

Is this a real estate bubble with a crash on the horizon? Or could this be the new normal when it comes to housing prices?

Instead of using terms like “real estate bubble,” Bowman Sawyer says she and her colleagues talk about it another way.

“Most of my contemporaries, we would use ‘supply and demand,’ and you know, there’s just no supply,” she explains. “There’s very, very little inventory. It’s just crazy. I’ve been through two or three market dips and declines, but I don’t think in my lifetime of doing real estate for 35 years have I ever seen it like this.”

A glance at the monthly MLS Statistical Reports produced by the Outer Banks Association of Realtors offers hard numbers to back up the anecdotal observations. Through June, overall sales of residential and lot/land sales were up 97 percent for the year, while inventory sits at “historically low” levels. In June of 2021, for instance, there were just 424 residential homes for sale. A year ago, it was 975. And in June of 2019? Nearly 1,600 homes had “for sale” signs in Dare, Currituck, and Camden counties, plus parts of Hyde, Tyrrell, and Pasquotank.

Daniel Sutherland, the Multiple Listing Service & Operations Director for OBAR who puts together the reports, also points to the “Total Property Sold” graph, with its huge spike in 2005, calamitous drop in 2008-09, then steady climb – until last year.

“It’s a pretty distinctive graph from where we were in 2005 to where we ended up in 2009. Following was a steady working our way back up until COVID hit. When it ultimately went through the roof July of last year,” he says. “If it follows history, it’s probably going to drop back down to normal. But I don’t know when.”

This can’t really be a “new normal,” Sutherland adds because so few houses are available for sale. Instead, the supply issue is what has so many folks across the Outer Banks so worried. Unfortunate stories about nurses, first responders, and teachers not being able to work here because they can’t live here.

“Those people are important to our infrastructure here,” Bowman Sawyer says. “It’s disheartening because it’s causing people to leave the area. It’s difficult on the year-rounders that can’t afford to buy a house. We need some affordable housing, for sure.”

Further Outer Banks Real Estate Market Analysis

For all the fanfare and media attention over the OBX’s most expensive listing ever – that $11 million property that you know you looked up online just because curiosity got the better of you – affordable homes for families are still available, says Doug Brindley of Brindley Beach Vacation & Sales.

The incoming president of the Outer Banks Association of Realtors points out that the average sale price remains in the mid $500,000s. So while some high-dollar vacation homes and rental properties are flying off the market, there are some options still out there for folks who need a year-round residence.

But Brindley, who has worked in OBX real estate since 1984 and started coming to these beaches in 1963, also doesn’t see a bubble about to burst.

“Prices are not coming down. Prices aren’t coming down on anything,” he says. “Anytime you have demand well in excess of supply, you’re going to have a price increase, and it’s going to stay there.”

That goes for the vacation rental market, too, and the COVID pandemic gets the credit – or blame, depending on your perspective – for that as well. Rentals surged throughout last fall because parents could work from anywhere and students could take classes from anywhere, and big numbers are expected again this fall.

Furthermore, with travel restrictions still in place this past summer, seemingly anyone who hadn’t already been a regular OBX visitor decided to give it a try.

“I wouldn’t call it a bubble. I’d say that consumers are reconfiguring when and where they’ll travel,” Brindley says. “And we have been identified as one of the safest locations to go to. First of all, health-wise. And we’re just one fantastic bargain. There’s tremendous value in a vacation rental. Most importantly, we’re still all family-oriented. I don’t think we’ve overrun our pricing on vacation rentals or homes.”

Outer Banks Home Buying Strategy

And so, we wait. For…

1. the unending stream of cars to diminish enough to chance a visit to Duck.
2. two-hour wait times at our favorite restaurants to diminish enough to meet friends for dinner and drinks.
3. the number of investors swooping in to buy second and third homes to diminish enough for us to get that Goldilocks house. Not too big, not too small, not too pricey, not too cheap. Therefore have our family settle down at last.

Until then…

“I mean, there’s nothing wrong with having a lot of business coming your way. It’s great,” Brindley says of the current crush. “Our houses are full, so we’re on autopilot: Just keep the process happening until these people finally start going home sometime in October. Real Estate sales, we just do our best: We work our prospects of buyers, and we work people with properties that we can list to sell, and we will just ride this as far as we can.”