The condominium market on Hilton Head Island and in Bluffton is booming.  We have seen a significant reduction in the amount of inventory of condominiums and all signs indicate this trend will continue throughout the summer.  One thing buyers of condominiums need to be aware of is condominium insurance, also known as HO-6 insurance.

What is HO-6 Insurance?
When you buy a condominium on Hilton Head Island or in Bluffton, there is often a POA (Property Owners Association) that manages the complex for the owners.  One of the things the property management does is contract and pay for insurance on the complex and monies to pay for this is taken out of your monthly fee.  However, the insurance typically covers the exterior and standard replacement of the interior.  If you upgraded your unit with granite, tile, etc. you would NOT be covered by the group policy.  In this case you would benefit greatly from HO-6 insurance.  In addition to covering any upgrades to your unit it would also cover the contents, loss of use if the property is used as a rental, and liability should someone get hurt.  These policies often start around $350/yr., depending on the coverage.  Prior to getting a HO-6 policy you should check with your lender, if you have a mortgage, to see if there are any requirements they have. 

If you would like to know more about Condominium Insurance; i.e. HO-6 insurance, contact your insurance agent.  If you have a minute, watch local insurance agent Kristen Hayrinen discuss this topic in the video below:

A recent article in The Island Packet discussed how US mortgage rates are on the rise.  After years of record low interest rates this rise could have a
negative effect on your purchasing power.  According to Freddie Mac the average rate on a 30 year fixed mortgage is now 4.46%, which is up almost a full
percentage point from a year ago. 

PURCHASING POWER
Any increase in the interest rate reduces your purchasing power.  For example a buyer that a few months ago locked in a 3.35% rate on a $200,000 mortgage would have a monthly payment of $881 according to Bankrate.com.  The same mortgage at the current rate of 4.46% would increase the monthly payment to $1,008 per month (not including taxes, insurance).  This adds up to quite a bit over the term of the loan, $45,720  to be exact, which is why many buyers have been getting off the fence to BUY NOW.  This is no better illustrated than by the significant reduction in inventory levels on Hilton Head Island and in Bluffton.  We are now below a 9 month supply of homes and condos and that number continues to drop.  

For many of you that have been considering buying but are not sure, this should be a wake up call that NOW IS THE TIME TO BUY!!!  Although the Fed is doing what it can to raise interest rates, they are still extremely low.  Does anyone remember the 1980's and interest rates in the 17%-22% range?  As inventory levels continue to plummet the choices you have to choose from dwindle as well.  As this continues your dream home might be gone while you procrastinate on whether you should BUY NOW or wait.  But let me ask you this question, 'What are you waiting for?'  There has not been a better time to purchase real estate, especially on Hilton Head Island or Bluffton.  You have spent the last 20, 30 or 40 years working so you could enjoy your life.  Why wait any longer when you can take advantage of prices that have not been this low in 10 years and interest rates that are still ripe for the taking.  Take advantage of this opportunity before its to late and your 20/20 hindsight tells you that you missed out on a once in a decade opportunity.