COLLINSGROUPREALTY.COM
HOME SALES BY PRICE RANGE
956
5
2014 OUTLOOK
2014 should be another VERY solid year of growth and recovery
in the Hilton Head/Bluffton real estate market!
943
Fueled by a recovering economy and an excellent year for the
stock market in 2013, real estate is back on the radar-screen
as an excellent place for investment and growth. With that as
a foundation, here are the primary factors that will generate a
substantial increase in sales in our market in 2014:
327
INVESTORS ARE BACK! Our phones are ringing again with buyers
110
105
69
$100k and under
$100-$250k
$250-$500k
$500-$750k
$1m-$1.5m
$750k-$1m
69
$1.5m
Considering that roughly 68% of the total Home sales in 2013
took place in the mainland communities (ie., off-Island), it certainly makes sense that the bulk of the transactions last year fell
into the $100,000-500,000 price-range, considering the lower
average price-point on the mainland vs. the Island. That said, as
real estate values have dropped back to nearly 2001-2002 levels,
a good number of the Home sales ON the Island fit into this category as well. In fact, in the $250-500K price range, 1/3 of those
were located on the Island, and a full 2/3rd’s of the $500-750K
sales were on the Island as well.
The upper price-range of our overall market experienced a
“pick-up” from 2012, but obviously there is a lot of progress to
be made in attracting and converting higher-end buyers into our
marketplace. It is my sense that last year’s strong recovery in the
stock market will help fuel this market segment as the build-up of
wealth introduces confidence into the upper-end of our real estate
market.
Naturally, financing plays a huge role in price-point performance
in our market as well. With conforming FHFA loan-amounts set
at $417,000, the traditional 80% mortgage purchase-scenario
places the upper-limit purchase price right around $500,000.
That said, with interest rates still so attractively-low, we’ve seen
about one half of the transactions involve some kind of financing…
while the other half have been all-cash purchases.
BANK-INVOLVED SALES
Homes
Villas
7%
9%
12%
12%
81%
80%
Lots
who anticipate appreciation in real estate in coming years. The
more people believe (and act as though) we are at a bottom, the
sooner they’ll prove themselves right! As investors often focus on
the lower-price point segment of the market, these sales will serve
as the tipping-point of the first domino in a series of transactions
that will follow thereafter as those sellers buy “up.”
ROBUST RENTALS! Both the long-term rental market and the
vacation rental market are as robust as anytime I can remember!
In the long-term market, demand is exceptionally high, leading to
a year-over-year increase in rental rates, making rental property
attractive once again. In the vacation rental segment, 2011, 2012
and 2013 posted outstanding occupancy rates, leading professionally-managed and personally-managed properties alike to recordincome years. Hilton Head Island is squarely in the center of the
vacation-destination radar-screen, and the many recent noteworthy improvements throughout the Island’s infrastructure are earning us repeat visitors at an encouraging rate. This positive trend is
helping buyers foresee a way to offset carrying costs of ownership,
which is leading to a higher conversion rate of second-home/rental
property sales than we have seen in many years.
LOCALS ARE GETTING BACK IN THE ACTION! After an extended
period of a “value-driven lock-down,” local owners are starting to
get back into the real estate marketplace. We are helping an increasing number of locals sell their existing home and turn around
and buy a different home, taking advantage of bottoming-out
prices. The local-based segment of the market was a big factor
in the escalation of values a decade ago, and it is good to see this
segment active once again.
4%
RETIREMENT IS GETTING CLOSER! The downturn of the economy
18%
78%
Short Sale
Foreclosure
Conventional
Widely seen as one of the biggest indicators of a buyer’s market,
short-sales and foreclosures have accounted for a significant percentage of the transactions in the HHI/Bluffton marketplace since
the decline in the market starting in 2008. The GREAT NEWS
today, however, is that these bank-involved sales are on a rapid
decline. In 2013, short-sales and foreclosures accounted for 19%
of Home sales, 21% of Villa sales, and 22% of Lot sales. While
still significant, these levels are down sharply from the year before
when those percentages were 30%, 28%, and 34% respectively
in 2012. As the market (and overall economy) continues to
improve, we look for short-sales and foreclosures to (sooner than
later) become a “thing of the past.”
left many with a deflated sense of wealth and a need to continue
in their job for the foreseeable future. Many years later, as we
turn a corner in the economy, we are seeing all-the-more-eager
retirees enthusiastically achieve their dreams of retiring to our
beautiful area. This growing demand is HUGE in its base of
numbers, which is one of the m