It’s apparent to any motorist that the Ocean Shores housing market is booming when driving down the two main drags in town, Ocean Shores Boulevard and Point Brown Avenue.
Dozens of new builds in various stages of completion, from newly-cleared lots, to partial and full foundations, to frames and newly completed homes.
“It’s something, isn’t it?” said a worker at the site of a HiLine Home build on Glendover Court SW. He said homes are popping up like tract housing — developments with similar homes built on subdivided land — “but they are all single family homes.”
In a recent Ocean Shores state of the city report, Mayor Crystal Dingler laid out the new single family housing starts over the past five years: There were 105 in 2017, 151 in 2018, 174 in 2019, and 197 in 2020.
In the first quarter of 2021, 85 single family housing starts have already been recorded.
Currently, Dingler said, “It’s about 25 new homes a month” in a city of about 6,000 residents.
The city reaps financial benefits with the new construction in terms of fees for building, improvement and environmental permits.
Revenue from new construction has been rising over the past few years in Ocean Shores and early indications are that 2021 will easily top 2020.
During the first four months of 2021, 218 building permits were issued in the city, a total of $404,564 in building permit money for the city. During that same time period in 2020, 117 permits were issued, with a total of just under $190,000 in permit revenue for the city.
Dingler’s recent report said property tax revenue has risen from $4.7 million in the 2015-16 fiscal year to $6.1 million in 2019-20.
There’s been a sharp rise in permits issued for single family homes. In 2021, 103 permits were issued in the first four months. In 2020, that number was 49. That doesn’t include the normally busier summer months, so the city is easily on pace to double the number of single family home permits this year.
The city has the capacity to handle the new growth, but it does put a strain on city employees, said Dingler.
“When this city was (planned) they anticipated a full build-out,” said Dingler. Right now, “We are about half built-out.”
That means the city has the water and sewer capacity to handle the boom in construction and the people that are moving into the area. As for the strain on city employees, Dingler notes the extra work to place water lines under roads and other new construction activities that go along with new construction.
Of the growth, and some of the concerns especially among the longtime residents seeing their little coastal town grow so quickly, Dingler said, “We don’t want to be a stagnant city.” She said growth is a good thing, but noted the huge increase in the first few months of 2021 has stretched the city’s departments pretty far.
With limited staff, “It makes it difficult for the builders because it takes such a long time to get a permit, but it’s a sign of how much we have grown,” said Dingler.
The city has a new planner, “and he inherited quite a workload and he’s doing his best to catch up on those,” said Dingler.
Dingler said she’s asked why, with the sudden increase in revenue, the city doesn’t hire more staff. That’s because a real estate boom like this, historically, doesn’t last long, which creates issues with telling potential employees their jobs with the city will be long term.
“Some of that has to do with finding people who have the appropriate skills who want what may turn out to be a temporary job,” she said. “You don’t want to make promises you can’t keep.”
“Some people really appreciate the growth, and some do not,” said Ocean Shores real estate agent Donna Jones. “Some of the long-timers are thinking it’s getting crowded.”
She said she’s been “steady” with clients this year. For a city its size, Ocean Shores has a large number of real estate agents so, as busy as it’s been, the effort can be divided up and all of them have a chance to make money off the recent surge.
Values way up
For sale signs are dotting the entire community, including existing homes and vacant lots. Some homeowners who may not have considered it before the boom are listing their homes to take advantage of the sellers market.
The median cost of a house in Ocean Shores is just under $350,000, rising 44.1% over the last three years, according to the real estate website Redfin.com.
About one-third of the homes sold here over the last three years have sold above the list price. That’s up 300%.
By comparison, according to Redfin, nationally the median sale price of a home is $370,528, up 22.2% over the last three years, and the number of homes sold during that time has gone up 38.2%, putting Ocean Shores well over the average.
According to data from the real estate website Redfin.com, in May of 2021, home prices in Ocean Shores were up 44.1% compared with the same period last year.
Houses that pop up on the market don’t last long either. According to Redfin, homes in Ocean Shores sell after 18 days on the market; that’s compared with 132 days last year.
There were 51 homes sold in the month of May in Ocean Shores. That’s more than twice the number sold in May 2020, according to Redfin.
The cost of building materials, which bloated during the pandemic, are adding to the cost of homes, said Jones. Lumber in particular has gone up close to 200% since the beginning of the pandemic more than a year ago.
Despite the increase in prices, Jones said, “Dreams are still coming true,” that people who have been planning to move to the area for years have been able to weather the pandemic and the last recession and are still able to realize their dream of moving to the coastal town.
“So it’s a joyous time to congratulate so many people on having their dreams coming true,” she said.
Things will shift. They always do in the real estate market.
“This seller’s market can’t last,” said Jones, and material costs will likely moderate.