2018 - Are You Prepared?Read Now
It’s widely accepted that preparation is one of the major keys to success. This is true in sport, business or life. If you have an idea of what’s coming you can prepare yourself and be ready to handle anything. In my opinion, determining what is coming in the real estate world is done in different ways; 1) by looking at the recent history and trends – what’s been selling, 2) looking at what isn’t there – what hasn’t been selling and why? 3) Looking at the micro vs. macro and how our local market is influenced by national or worldly things. To be more precise, what are the things that could help, or hinder, the market in 2018?
Limited Supply - There is only so much buildable space and as the economy continues improving and more people are moving to this area, it’s as simple as Economics 101 in that limited supply + increasing demand = increasing sales and prices.
Taxes - As more people are moving out of high tax states around the country, they are seeking lower tax states like South Carolina. Given the fact Hilton Head Island and Bluffton are long established communities that offer a great quality of life, they are high on the list of places to live. Both areas have been consistently listed as top places to live by magazines such as ‘Forbes’ and ‘Conde Naste’. Texas has seen a large migration of companies and people as they leave California. North and South Carolina are seeing similar things happen as people are leaving New York, New Jersey and Illinois.
Quality of Life- The Lowcountry’s year-round tropical climate lends itself it being outdoors and there are an abundance of things to do in the area. The ocean and beach are far and away the number one outdoor thing to do and the areas golf and tennis are routinely in the best in the country. What doesn’t get the publicity are the other activities such as boating, kayaking, fishing, biking, the list goes on and on. With so much to do it makes it more difficult to spend time working and probably one of the reasons this area is called the ‘slow country’.
These things add up to a phenomenal opportunity and a continued increase in demand for our area. For those that have withstood the ebbs and flows of the market, the future is looking better and better.
What could hurt the market?
The question I’m asked most often of late is if I think there will be a market crash. When I ask where such a question would come from the answer is always, ‘The real estate market has adjusted every decade and it’s been 10 years since the last fall out. Aren’t we due for another?’ My first response is ‘What data is there to support such a theory?’ Let’s look at what the hard data says and what may affect the market negatively.
New Taxes- Just as higher taxes in other states have a positive impact on our area, the recently passed federal tax plan does have potential to irritate the market. Because it is so new, the details are not yet known, and the market won’t know the full effect until April as people do their taxes. However, outside of a knee jerk reaction by the minority of buyers, I don’t think this will have a large effect on our market. Those that rationalize will always come up with reasons why they shouldn’t buy; interest rates are up X%, the house isn’t quite the right color, etc. but those that want to be here will find a way to make it happen. When the naysayers and procrastinators see the market continuing forward without them, they are certain to get back into the fold.
Student Loans - Students defaulting on government backed debt and its effect on the economy has been discussed for some time. Some believe it could have a reverberating effect like the credit fallout of 2008. I don’t think it would be that drastic or anywhere near that level and believe this to be a blip on the screen.
10-year cycle - If there was a spike in values there may be cause for caution, but if you look at the steady improvements our market has taken for a decade, it makes you scratch your head and say, ‘Fallout from what?’ We haven’t had any sharp increases, so there’s little concern for sharp decreases; i.e. fallouts. In fact, things have been moving closer to consistent all the way around, regardless of what price point you are looking at. Sales, median prices and both on a steady increase (area wide) and days on market continues to drop. Newscasts and those looking for ratings maybe reporting the market will crash but the market is saying something completely different and that is they want to live in the Lowcountry.
What’s going to happen this year?
Barring any natural catastrophes, I believe the market will continue its upward trend. There may be a slight stall in Q1 and Q2 as buyers wait to learn more about the new tax codes and how it will affect them, but people want to be here and not being able to write off interest on their loan isn’t going to stop them.
As many of you are aware, people move here for two reasons: to live and to invest, and sometimes a combination of both. We have seen continued improvement in values and as this becomes more evident to buyers looking to enjoy the good life or diversify their portfolio, I believe it will play a major role in the continued upward trend of real estate value on Hilton Head Island and in Bluffton.
Knowing where you want to go and how to get there is a good thing. Understanding what variables you may encounter on the way allows you to plan ahead so those variables can be avoided or taken advantage of. Not only do I look at the ‘normal’ indicators of what might happen, I also look at the variables so when I’m advising someone on how to buy/sell their property they can make the adjustments and know why. When doing so, the pitfalls experienced by others are avoided. It’s the little things, but those little things are what allow me to help you save two of your most valuable resources, time and money.
PNP Real Estate
Our goal is to help you Buy or Sell your property in a timely fashion by providing you with all the information necessaryFor answers to all your questions contact us at (843)-338-6737.