Recent trends in the local real estate market in Massachusetts have sent developers and builders over the Commonwealth's borders in search of investment opportunities in other parts of the country. One area in particular that is becoming a region of interest for investors from the northeast is coastal North Carolina. By now, you have likely heard of or possibly visited North Carolina's Outer Banks. The Outer Banks has been a popular vacation spot for residents of North Carolina and neighboring states since the Wright Brothers used the dunes at Kitty Hawk as a launching pad toward aviation history. Drawn by warm water, sandy beaches and a mild climate, vacationers have come in waves. Many of them bought real estate and roughly 50,000 people populate a seemingly uninhabitable tract of land that stands in defiance to Mother Nature. Despite lying in the path of hurricanes and being subjected to the brunt of an unforgiving tide, the Outer Banks lures tourists and vacationers with its combination of beaches, boating, water sports and other amenities. From an investor's perspective, however, the Outer Banks compares price-wise to regions such as Hilton Head, SC, Virginia Beach, VA and Ocean City, MD. In other words, development opportunities have likely come and gone.
Still, other opportunities exist in the growing North Carolina real estate market. Specifically, along the Atlantic IntraCoastal Waterway (the "ICW") and the hundreds of brackish rivers and deep, saltwater "creeks" that flow into it. The Atlantic ICW is a combination of manmade canals, rivers and coastal bays that begins in Boston, Massachusetts and terminates in Key West, Florida. Authorized by Congress in 1919 to create a shipping lane between the Northern and Southern states, the ICW features deep water (minimum depth of 12 feet in most areas), which is ideal for sailboats and large yachts. The ICW was created to facilitate shipping without exposing watercrafts and their cargo to the perils of the Atlantic Ocean's rough seas. The ICW is still used commercially to some degree, but it has become a 1200 mile long playground for recreational boaters, wind surfers, jet skiers, kayakers, water skiers and commercial and sport fisherman.
As the intent of the ICW was to connect major shipping ports, residents of cities such as Annapolis, Norfolk, Charleston, Savannah, Jacksonville, Fort Lauderdale, Miami and Key West have long enjoyed the recreational value of the ICW (the Gulf IntraCoastal Waterway stretches between Brownsville, Texas and Carrabelle, Florida, but was never connected to the Atlantic ICW despite Congress' original intent to do so.) Around each of these metropolitan areas, ICW communities have developed as the density and real estate prices drive vacationers and year long residents alike away from the major cities and towns. Communities like Sea Island, GA and Myrtle Beach, SC, which began as regional settlements along the ICW, have since grown into thriving tourist destinations. Other areas, such as Oriental, NC, have quietly established themselves as charming waterfront towns where residents can enjoy the weather, the water and the serenity that comes with the territory.
Oriental is an established community in Pamlico County along North Carolina's abundant ICW coastline. It is known historically as the halfway point for boaters between the northern and southern tips of the Atlantic ICW. Pamlico County is a region of North Carolina that backs up against the ICW and can historically be described as a place that unless you came by boat, you are there only if it was your intended destination. However, because it is interwoven with saltwater creeks that feature deep water[1] which allows for boats of varying sizes to both pass freely and moor, the region is very attractive to boaters. Its low property costs make the region ripe for development, and home owners, developers and builders from areas such as the Research Triangle (Raleigh/Durham/Chapel Hill) and Charlotte have begun to descend upon the area. The deep water, in particular, is a feature that captures the attention of sailboat and yacht owners alike as often the biggest logistical challenge to boat ownership is where to keep the boat when it is not in use.
Just as a homeowner or renter in a dense, urban area such as Boston or New York City, faces the inevitable question surrounding where to park his car, boaters have the same challenge. In established boating communities, prime slips at marinas are in high demand from both a lease and purchase perspective. The "dockominium" concept gained momentum and popularity in the late 1980's and 1990's and has had mixed results in different areas. A dockominium is a marina's version of a condominium complex or the equivalent of buying a parking space for your car in a garage in Beacon Hill. The buyer is essentially buying a slip or a section of water in which to park his boat. Deeds to these slips are conveyed like they are with any other pieces of real property. However, ownership of a slip differs from that of a parking spot in a city garage in that ownership of a slip often involves membership in the marina or yacht club which can be costly and may not interest boat owners simply looking for a place to tie up for the night. However, in developed boating communities, boat owners facing high rental costs for slips may turn to ownership for economic purposes, especially if the boat owner is at least a part time resident of the community. Furthermore, waterfront property with docking capability is scarce and expensive in these communities, so it is likely that purchasing a slip may be the boater's best option. This factor, among others, has contributed to a development trend along the ICW into areas such as Pamlico County.
Waterfront property with deep water mooring potential has significant value to boat owners and especially those of boats with deep drafts. Combine the deep water of the Pamlico County creeks and rivers with their close proximity to the ICW, the mild year round climate and geographical protection from the elements that the land buffering the ICW and the Atlantic Ocean provides and you have a haven for recreational boaters.
Investors and potential homeowners have begun the development process along the creeks and the ICW in Pamlico County. Multiple lane roads, power lines and other infrastructure have begun to emerge along the riversides in areas that, a few years ago, consisted of not much more than homes to the region's various species of snakes and beetles. Property values in other coastal areas along the eastern seaboard have priced many potential homeowners and boaters out of the market and forced people to a) keep their boat dry docked for 6-8 months out of the year, b) purchase a dockominium that is 500 miles or more from their primary and/or secondary residence or c) abandon the notion of buying a boat and/or a second home all together.
The key to the development of any area is making it accessible to and from other major population hubs. The Pamlico County region is located approximately 150 miles southeast of Raleigh, 300 miles east of Charlotte and 164 miles north of Myrtle Beach, SC. Out of state travelers to Pamlico County can arrive by plane into New Bern's Craven County Regional Airport. New Bern is a city of roughly 24 thousand citizens on the convergence of the Trent River and the Neuse River, which flows easterly into the Pamlico Sound and the ICW. From New Bern, Oriental is a short, 30 minute ride along newly widened route 55. The construction of roads, coupled with the widening of existing roads, which is ongoing in Pamlico County, is the first step towards laying the necessary infrastructure essential for expansion.
The region offers the opportunity for investors, primary and secondary homeowners who are unable or unwilling to compete in more established real estate markets to purchase waterfront property in an area that is on the verge of becoming a target destination for boaters, fisherman and vacationers along the ICW.
For more information about specific lots for sale in the region, or if you have general questions or comments about this article, contact the author - Ryan McDonnell
[1] The term "deep water" as it relates to boating has to do with the type of boat that can navigate the waterway. Deep water generally refers to depths exceeding 4 feet