"We can still protect the neighborhoods of Southport."
That was Mayor Joe Pat Hatem, addressing the Board of Aldermen after a state court ruling threatened to unravel the city's short-term rental rules. The quote sounds like a mayor reassuring residents after a legal scare. It's actually the answer to a question that matters far more to buyers than to anyone else in the room: can this house become a nightly rental, or can't it?
If you're comparing Southport to Oak Island right now, that question is doing more work than the median price on either listing. The two towns sit ten miles apart on the same stretch of Brunswick County coast, share the same ferry to Bald Head Island, and get lumped together in the same "Southport-Oak Island area" searches. But one of them voted, back in 2021, to freeze new short-term rentals out of its residential neighborhoods. The other never did. That single difference, more than square footage or view, decides what kind of asset you're actually buying.
The Ordinance Behind the Quote
In July 2021, Southport's Board of Aldermen passed a short-term rental ordinance on a 4-2 vote after nearly two hours of public comment. The rule was straightforward and, for anyone who already owned a nightly rental in the city, unsettling: no new short-term vacation rentals would be permitted in the residential zoning districts (R-10, R-20, and multi-family) going forward. Only homes that could show verifiable booking activity from before the ordinance would be grandfathered in as a legal nonconforming use, and owners had until September 7, 2021 to file for that permit or lose the right permanently.
Southport still allows short-term rentals in its commercial and planned-unit districts (Central Business District, Business District, PUD), and it created a separate homestay category for owner-occupants who want to rent out a room or two while living in the house themselves. What it closed off was the ordinary path: buy a house on a residential street, list it on Airbnb, and rent it out most weekends. If that house didn't have provable bookings before the ordinance, that door is shut, permanently, regardless of who owns it next.
There's a second trap buyers miss. The grandfathered status isn't permanent just because it exists today. Under the ordinance, a nonconforming short-term rental that sits idle, no nightly bookings, for 180 consecutive days loses its status and can't be revived. A house marketed as "currently operating as an STR" could be one slow season away from becoming an ordinary residential property with no rental rights attached. Southport's own short-term rental FAQ spells out that rule, along with insurance minimums for anyone holding a permit: $1,000,000 in liability coverage for a full short-term rental, $500,000 for a homestay.
What the Court Actually Struck Down
The story doesn't end there, and this is where a lot of secondhand advice gets it wrong. In April 2022, the North Carolina Court of Appeals ruled in Schroeder v. City of Wilmington that cities cannot require a permit or registration as a precondition for renting residential property, at least not through the kind of lottery-and-permit system Wilmington had built. The ruling rippled across the state. Southport's own City Attorney, Norwood Blanchard III, told the Board that the city's ordinance had the same structural problem: it tied its short-term rental rules directly to an annual permit requirement, which the court had just said cities can't enforce.
Southport's response, as reported by the State Port Pilot, was to suspend enforcement of the permit requirement, refund fees to anyone who'd paid, and send the ordinance back to the planning board for revisions. That sounds like the whole rule collapsed. It didn't. Blanchard was explicit that the city could keep regulating short-term rentals through zoning itself, things like requiring off-street parking per bedroom, which the Court of Appeals had already said was fine because it isn't dependent on a permit. The underlying zoning restriction on new short-term rentals in residential districts is a land-use rule, not a permit-to-rent scheme, and it wasn't the target of the Schroeder decision.
That's the gap between what people assume happened and what actually happened. A Court of Appeals ruling loosened the mechanics of enforcement. It did not reopen Southport's residential neighborhoods to new nightly rentals.
Ten Miles North, None of This Applies
Oak Island never passed an equivalent ordinance. There's no city-specific rule restricting where a short-term rental can operate by zoning district. Owners there work within North Carolina's statewide Vacation Rental Act and standard zoning and safety requirements, but nothing stops a buyer from purchasing a house on Yacht Drive along the Intracoastal Waterway, or one backing up to Davis Canal, and listing it commercially the week after closing.
That difference changes what you're actually pricing when you compare the two towns. A Southport house on a residential street with no proven rental history is, for investment purposes, a long-term rental or a personal home, full stop. The same type of house in Oak Island can be either, and the buyer gets to choose after closing rather than being boxed in by a zoning map drawn years before they ever looked at the listing.
Current Oak Island inventory reflects that flexibility in its spread. Oceanfront homes commonly start near $800,000 and run past $1.5 million for larger, updated properties. Canal-front homes with dock access, the ones near Davis Canal and similar waterways, tend to land between $500,000 and $900,000. Interior homes a few blocks from the sand, still walkable or a short bike ride to the beach, are more often priced between $300,000 and $600,000. Those price bands sit next to each other geographically but represent very different ownership experiences, and in Oak Island's case, every tier can legally chase rental income if the owner wants that.
The Median Price Won't Settle This For You
Here's where it gets genuinely confusing if you're just checking portals. As of July 2026, Zillow's estimate put the average home value in Oak Island at $555,572, down 1.4% over the previous year, with homes typically going under contract in around 68 days. In that same July 2026 update, Zillow priced the average Southport home at $418,219, up 1.0% over the year, moving to pending noticeably faster, around 45 days.
A month later, Movoto's August 2026 snapshot of Southport's active listings put the median list price at $476,000, nearly $60,000 above Zillow's estimate for the same town in roughly the same window. That's not a typo or a data error on either side. Zillow's figure is a modeled average of estimated home values across the whole housing stock, sold and unsold. Movoto's number is the median list price of homes currently for sale. Those are two different questions answered with two different numbers, and neither is wrong.
That's the real lesson for a buyer cross-shopping these towns: the median moves depending on which portal you check and what exactly it's measuring. The zoning ordinance doesn't. Whether a specific Southport parcel sits in R-10, R-20, or a PUD is a matter of public record, not an estimate that shifts month to month. If you're trying to figure out what a house is actually worth to you as an income property, the zoning district and permit history will tell you more than any median on any site.
There's also a cost layer that doesn't show up in either town's headline price. Oceanfront and near-oceanfront properties on Oak Island frequently fall in FEMA's Zone VE, the highest-risk flood designation, while interior and soundside homes are more often in Zone AE. That distinction drives real differences in flood insurance premiums on top of the purchase price, and it applies regardless of what the zoning allows you to do with the house. You can check a specific address against North Carolina's flood risk maps through the state's flood information center before you get attached to a listing.
Before You Write the Offer
If you're weighing a Southport address against an Oak Island one, a few questions do more work than a rental income calculator:
- What zoning district is the parcel actually in? R-10, R-20, and multi-family in Southport mean no new short-term rental rights, period.
- If the listing claims existing rental status, ask for the active nonconforming permit and a booking history showing no 180-day gap.
- Check the HOA documents independently of the city's zoning. A neighborhood covenant can restrict rentals even where the town allows them, and it can also stay silent where the town restricts them, which doesn't help you either way.
- Get a flood zone determination for the specific address, not just the general area, since VE and AE zones carry different insurance costs even a few lots apart.
- If wind coverage matters to your budget, ask whether the property would need a policy through the North Carolina Insurance Underwriting Association, the state's "Beach Plan," in addition to standard homeowners and flood coverage.
Two Things Worth Asking Before You Get This Far
Does Oak Island require any permit at all to run a short-term rental? No city-specific ordinance governs where short-term rentals can operate in Oak Island. Owners still need to register for the town's accommodations tax and follow standard state vacation rental law, but there's no zoning-based ban comparable to Southport's.
If a Southport house is currently an active nightly rental, does that status survive the sale? It can, but it's tied to continuous use, not to the address itself. A new owner inherits the nonconforming permit only if the prior use stayed active without a 180-day gap. Confirm the booking history before you assume the rental income transfers with the deed.
Zoning maps and court rulings aren't the parts of a coastal purchase that show up in the listing photos, but they're the parts that decide what you can actually do with the house once it's yours. If you're weighing Southport against Oak Island, or any other stretch of this coast, Living By The Coast Realty Group can walk the specific zoning history on the addresses you're considering, and if you already own a home nearby and need to know what it's worth before you make your next move, start with a free home valuation and we'll take it from there.
