I stayed in Corolla last summer. My friends & I (about 12 total) rented an 8 bedroom house with an inground pool, hot tub, 3 levels (all with decks), etc. right on the beach.
The big downside is it was about 8 miles north of where the road ends. We all rented 4x4s - it sounds easy, but it is a huge pain in the ass. I would not recommend it. It took 2 hours to get into town and back for groceries, beers, etc. Also, AWD vehicles like Subaru Outbacks would have no chance of making it.
To make it worse, one night we were driving home and hit a sinkhole which totalled the front of the rental car. The cops came and said the tow-truck company, which happened to be one guy, was out drinking at the local bar and couldn't help us. We asked what could be done, and they said "sorry, the tide will come in and basically wreck the car."
Luckily, some locals with a F150 pulled us away from the water and we let the rental car company get it the next day.
The northern towns seemed pretty nice, albeit very family-oriented, and I would go back.
Twiddy is the main real estate company on the island.