North Carolina’s Crystal Coast Rates Top Second-Home Destination

2008-05-07

    As the author of a book on buying a second home, I’m often asked to evaluate various second-home markets throughout the country. Recently, I received one such inquiry about the famed “Crystal Coast”, otherwise known as Carteret County, North Carolina which boasts a multitude of quaint seaport towns, miles of sandy beaches, and the infamous Barrier Islands. We’re talking Blackbeard’s old stomping grounds here.

    When reviewing any second-home location, I always approach it from two angles. The first is a quantitative assessment of the area. Specifically, I look at local housing and market data to determine if the area is a good investment because no matter what your primary reason is for buying a second home – as an investment, a weekend getaway, or a place for eventual retirement – choosing a location that promises to appreciate in value over the years is always a wise move.

    I then look at what the area has to offer in terms of recreational activities, cultural offerings and the like. After all, regardless of whether your intent is to use your second home personally, rent it out, or some combination, it’s always important to select a location that can satisfy a variety of interests for both young and old alike.

    With the above in mind, following is a blow-by-blow of what I discovered about the Crystal Coast and, in my opinion, how it rates as a second-home market.

What’s happening with housing in the area?

    All housing markets experience ups and downs. Carteret County is no different. Therefore, in order to gain a true understanding of how housing stacks up in this market, I enlisted the help of Ed Nelson of the Carteret County Association of Realtors to pull a near10-year history of median home prices to establish a trend. Countywide, the data revealed a 96% total increase (from $121,515 in 1998 to $238,417 as of September 2007) or an average of about 9.6% annually. Of course, median home prices vary greatly by town with many of the beach communities commanding higher values. Still, the annual trend remains more or less consistent with the county as a whole.

    No doubt, Carteret County has experienced strong home appreciation over the past decade. But what I found most interesting is that the appreciation has been relatively steady year over year. It appears this area has avoided the explosive, short-term growth (driven primarily by investor speculation) that is now unsustainable in today’s housing market. Therefore, unlike many once hot markets that are now facing drastic downturns in home values, I believe that Carteret County is poised for continued, steady upward growth over time.

    It’s also worth mentioning that Carteret County has the lowest property tax rate in North Carolina with a 2007-2008 tax rate of $0.23 per $100 valuation. Therefore, you won’t get zonked with a huge increase in your tax bill as your property appreciates in value, at least compared with other counties in the state.

    Finally, new construction, at least in highly desirable “resort” areas, still seems to be underway. One particular development that I’m partial to is Grande Villas (www.gvcondos.com), an eight-story high, 90-unit condominium community at Indian Beach that’s currently under construction for a 2008 move in. Located on a barrier island and adjacent to the 22-acre Theodore Roosevelt Nature Preserve, the development boasts spectacular views. Each unit runs front-to-back, which means you get two water views – one of the Atlantic Ocean and the other of Bogue Sound. Best of all, the beach is easily accessible via a short boardwalk from the community’s pool area.

What’s the local market like?

    U.S. Census Bureau statistics show that Carteret County’s population has grown by just over seven percent since 2000, which indicates steady yet manageable growth. Certainly as Baby Boomers begin to retire (as a matter of fact, the very first one just filed for social security benefits in October of this year) I would expect the population along the Crystal Coast to increase at a more accelerated rate. Even so, it doesn’t appear that this area will fall victim to a massive population explosion that could threaten to unravel the secluded tranquility it currently offers.

    I also looked at the unemployment rate to get a pulse on the local economy. The current unemployment rate is low, at just over four and one half percent, which is on par with the national average. Interestingly, some of the “resort” towns in the county have an even lower unemployment rate, hovering at just under four percent. Shirley Powell at the Carteret County Economic Development Council points out that this is most likely due to job diversity and growth driven mainly by an increase in tourism and retirees.

    The low unemployment rate is certainly having an impact on crime or the lack thereof. According to the North Carolina Rural Economic Development Center’s website, the current crime rate index for Carteret County is 31.3 (crime rates are typically measured as an index that uses 100 as the average – the lower the index, the lower the crime rate). An index of 31.3 is low, so you or your renter’s should feel pretty safe being out and about.

What’s does the area have to offer?

    Typically, owning a second home is about finding a place where you (or your renters) can relax and escape the daily grind of everyday life. Or perhaps, it’s about finding a place to spend some or all of your golden years. Either way, it means finding a location that makes you feel as if you’re on permanent vacation when you’re there. With that in mind, I often take a “travel guide” approach when looking at what an area has to offer

    The Crystal Coast consists of 526 square miles. The largest town is Morehead City which offers a choice of restaurants, antique stores, and art galleries. Being a harbor town, it also offers boating and fishing, as well as the Crystal Coast Jamboree, a popular show for country music fans.

    Another town of interest is Beaufort. Founded in 1709, it’s one of the oldest towns in the area and to this day retains a strong historic feel. It is also home to the North Carolina Maritime Museum which has exhibits covering historical boating, the evolution of commercial fishing, and Blackbeard’s shipwreck Queen Anne’s Revenge.

    In nearby New Bern is the Tryon Palace Historic Site and Gardens. Formerly the home of the royal governor, this stately brick mansion with its meticulously manicured gardens was voted one of the favorite weekend destinations by residents of Raleigh, North Carolina.

    Fort Macon State Park was one of the first guarded harbors. Now a 300-plus acre state park, it offers swimming, nature programs, concerts and guided tours of the Civil War-era fort. It is located on the eastern end of Bogue Banks (a barrier island across from Morehead City) near Atlantic Beach.

    If you are interested in nature museums, two to consider are the North Carolina Aquarium at Pine Knoll Shores and the Core Sound Waterfowl Center. Recently, the Aquarium completed a $25 million renovation and expansion which now offers exhibits that educate visitors on the different water habitats from the wetlands to the ocean. It also has two outdoor hiking trails and a magnificent marsh overlook. And don’t miss the Living Shipwreck exhibit where you can actually watch and talk with the divers.

    Finding a place to swim, boat, fish, scuba dive or kayak shouldn’t be a problem since over 80 miles of Carteret County is comprised of sunny beaches, including Emerald Isle, Indian Beach, Pine Knoll Shores and Atlantic Beach. If nature and hiking is your thing, you’ll want to visit the unpopulated Cape Lookout National Seashore, which is accessible only by boat. This large preserve is dedicated to the appreciation of natural beauty in land, shore and wildlife.
The Core Sound Waterfowl Center on Harkers Island within Cape Lookout gives a sense of the “down east” way of living, showing how people once lived off the land and water.  It provides hiking trails and viewing platforms for bird watching and even has a collection of artfully carved decoys.

    With such a plethora of things to do in the area, I can’t begin to cover it all with the limited amount of space this article allows. Therefore, I highly recommend downloading the 2007 Crystal Coast Visitor’s Guide at: www.crystalcoastnc.org. It contains over 40 color pages of sites, attractions and more.

How does the area rate as a second-home destination?

    In my opinion, North Carolina’s Crystal Coast achieves the perfect balance of promising to be a sound investment while offering an abundance of activities that appeal to a broad range of interests. Best of all, while the area is growing it still manages to retain its charm, beauty and serenity. Compared with other second-home markets, I feel this area definitely rates as one of the best in terms of value. With that in mind, I give the Crystal Coast an A+ rating as a second-home destination.

Craig Venezia (www.craigvenezia.com) is the author of Buying a Second Home: Income, Getaway or Retirement (NOLO).