The Hilton Head area real estate market continues to see phenomenal improvement. Sales continue to rise as inventory continues to fall. In fact, we have not seen inventory levels at this level since 2005/2006 and we all know what the market was like then. Many looking to purchase real estate are more comfortable that this is the time to buy, and they are right. However, the window for opportunity will not be open much longer. In fact, it is closing quickly.
When the Hilton Head area real estate market turns, it turns quickly and we are on the cusp of one of these quick turns. As mentioned, inventory levels are anemic. For example, the Queens Grant complex in Palmetto Dunes has over 225 units yet at the time of this post, there are only 11 units on the market! That's less than 5% of units in this complex available for sale. This is but one example but this is repetitive throughout the area.
We have written many times on Economics 101 and it does not take someone with a PhD to understand what low inventory and growing demand equate to...higher prices. Compound this with already low interest rates and the demand will rise faster than you can say 'oh, s*#t, I missed out on the property I wanted.'
For some the boat has already left the dock for some of the 'Best Buys'. While there may still be a diamond in the rough when it comes to homes and condominiums, the choices are extremely limited. Which leads many to ask 'Where is the next wave in the market?' The answer to this is simple...lots.
The Lot Market, now is the time to jump in.
The lot market took the biggest hit when the real estate bubble burst. For two reasons 1) banks did not want to lend on lots and 2) builders were not building spec homes in a depressed market. This caused the demand for lots to take a nose dive. However, with home and condo inventories at all time low's savvy investors are setting their sites on lots. They know people are and have been moving back into the real estate market and will continue to do so. As lot inventory depletes the prices will go up and those that have already purchased will be way ahead of the rest of the market.
Just as the home and condo markets have seen rises in prices we expect to see the same thing happen with lots.
Which lot should you buy?
Obviously, the 'Best Buys' are typically those with water views; i.e. oceanfront, deep water, river, etc. There is only so much inventory with a water view and these cannot be duplicated. At prices up to 75% off of their peak of six years ago these properties are unbelievable values whether you are an investor, an empty nester looking to build your dream home, or have always wanted to live on the water. Whatever your reason, now is the time to purchase lots before everyone else finds out.
If you, a friend or family member have been considering purchasing a lot, or real estate in the Hilton Head area contact PNP Real Estate for a no-obligation consultation on property values in your area of interest. We look forward to putting our 21 years of experience in the area to work for you saving you TIME and MONEY.
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.
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.
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.