In his 2009 book titled ‘The Housing Boom and Bust’ economist Dr. Thomas Sowell goes into great depth to illustrate the various causes behind the real estate bubble almost a decade ago. According to Sowell, the problem began in certain parts of the country where land values rose out of control. He goes on to explain the reason for this unprecedented increase in land value was the result of a limit placed on the amount of land that could be developed. The scope of this article is not to go into depth on government policy nor its effects on land value, but to illustrate how similarities exist between the Hilton Head Island/Bluffton area and other areas that experienced a large rise in values and what it means to you if you are looking to purchase or sell in Bluffton or Hilton Head.
The Low Country and in particular Hilton Head Island has often been compared to other unique areas around the country as far as real estate is concerned; Miami and south Florida, the Bay area and northern California and certain areas of Boston. One of the things that make’s each of these areas unique; i.e. the ability to maintain a high real estate value, is the limited amount of buildable space. In all but one instance, Hilton Head Island, the reason for limited buildable land has been government involvement (Hilton Head’s limited space was determined long ago by Mother Nature). Regardless of the method, limited buildable land coupled with an increasing supply of buyers allows for prices to rise and this simple concept provides an insulation that helps maintain a steady growth for that market. This is not to say Hilton Head Island does not feel the effects of a turn in the market. What it does allow is a much faster return to stable and rising prices compared to other areas when a tumble occurs.
Bluffton, the mainland just off the bridge to Hilton Head Island, is in a different category. At one time there was an abundance of land to build on. Now that the real estate market has returned that window of opportunity is closing. While Bluffton does have exponentially more buildable land than Hilton Head Island, it is being purchased at a faster rate and it will not be long until Bluffton's growth is hampered by no more room to grow.
What does this mean for today’s Buyer’s and Seller’s of real estate?
The answers to these questions vary and dependent upon where you are looking; Bluffton or Hilton Head and whether you are a buyer or a seller:
Hilton Head Island
Both Buyers and Sellers – This is one of the few times both buyers and sellers have a great opportunity.
For buyers who feel they missed the golden opportunity to buy at ‘the bottom’ the market as a whole is still in the early stages of its upswing and it is still a great time to purchase (for information on the best home on Hilton Head Island click here). Buyers in today’s market enjoy the comfort of knowing values are increasing and can ride the wave as long as they purchase now. Sellers are enjoying an increase in prices which are bringing them out from ‘under water’. As a result they are selling and moving on to other things in life with the proceeds.
Prices have already seen an increase this year over years past and this rise continues to include more segments of the market. Year in and year out Hilton Head far exceeds the national average for real estate appreciation and this applies to all segments of the market; homes, condos and lots. Hilton Head is a ‘built out’ community, meaning there is literally no more room for new development which as mentioned above, leads to continued price appreciation (The rate of that appreciation is determined by the amount of buyers in the market and as more and more people are looking to purchase the prices on Hilton Head, for all property types, are going up.) For sellers this means your prices should continue to go up and if you have been considering selling now is a great time to list your property for sale.
Bluffton continues to grow and is considered by many publications to be one of the top places to move to and live in the country. As this growth continues the amount of land available will continue to drop and as this happens the rate of appreciation will continue to move up.
Sellers- Due to more buildable space, Bluffton has not experienced the level of appreciation Hilton Head has and as a result some sellers are having to bear the brunt of a loss depending on what segment of the market they are in. Owners of homes and condo’s have been less affected than lot owners. However, as the market continues to move forward this tide will shift and in the Low Country, when the tide shifts it happens very quickly. If you are a seller with time to spare continue to do so and your patience will be rewarded. If you do not have the luxury of time, catching the early parts of an increase are far better than where things were only a few years ago.
Buyers – You are in the ideal position to purchase, especially if you are looking for a lot to build your dream home on. (For those looking for the premiere waterfront lot in all of Bluffton click here for a phenomenal golf home click here). Home and condo prices, especially in certain segments of the market are experiencing appreciation at the rate of 5%-10% per year the past two years, and waiting will serve you no purpose. Lot values, as mentioned above, are struggling but as more buyers come to the market and inventory levels of homes continue to drop, lot prices will no longer remain idle. Waiting on either will only allow you to miss the train of opportunity and this is one of the best times to purchase real estate in a very long time; affordable prices, low interest rates, etc.
As history has shown, there are two ways to increase the value of land and ultimately the real estate that sits upon it; 1) limit the amount of land to build on and 2) nature only providing so much land in a certain area. Here in the Low Country it is happening both ways depending on where you want to live. The thing to do is take advantage of it while you can; otherwise you will be left on the outside looking in and will have to wait quite some time for the next real estate train to pick you up.
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.