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
$100k and under
105
$100-$250k
$250-$500k
$500-$750k
69
$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 main reasons we are once again seeing developments (especially on the 5