Hilton Head Island Real Estate 12 month Report

2009 ... the year that everyone was touched by the Events of October 2008

Hilton Head Island real estate has held it own in face of the most significant financial crisis over the past 80-90 years. While the nation experienced the economic down turn of 1990-1992, Hilton Head Island came into the downturn late and came out of the downturn earlier than most of the United States.

One of the principal negative factors in real estate has been the increased requirements by banks to approve mortgages, along with the use of Appraisal Management companies to appraise local property. These appraisal firms are a result of new federal laws to set up a firewall between the loan processor and the purchaser. Appraisal Management companies are typically not located in the area and are not informed about the local values as a part of locations for homes relative to the ocean and other views that make up many of the On Island properties.

Hilton Head Island has several different market segments: Homes, Condominiums/ Villas, ocean-oriented and non-ocean-oriented locations. I'll describe these segments...Hilton Head Island "ocean-oriented" are properties that are either oceanfront, ocean view or are located from the second row to the twelfth row from the ocean. The ocean-oriented segment of the market is driven by the demand for rental properties and the desire to see ocean views. Hilton Head Island "non-ocean-oriented" are properties that located on the Island but not within the ocean-oriented area. This segment of the market consists of properties mostly in planned communities that provide some amenities, and offer views that are wooded, golf, lagoon, sound and/or marsh.

Some very positive real estate sales numbers for 2009 are the Average Units sold per month. For non ocean oriented homes in 2008, On Island sales averaged 41.9 per month. Even after the financial "tsunami" of late 2008 the average number of non ocean oriented homes per month in 2009 was 38.6. Sales results for ocean oriented homes actually saw an increase in number of units sold per month in 2009 with 8.08 compared to 7.4 per month in 2008. For condominium sales in 2009, the average sales per month for Non ocean oriented units saw an increase to 32.9 from a monthly level of 30.5 in 2008. The only decrease in units was experienced by the Ocean oriented condominiums with 10.3 per month in 2009 compared to 14.5 in 2008.

The On Island inventory levels have increased from the historically low numbers of 2005. But the inventory levels have not increased like some other markets. Some markets saw 400-500 percent increases and Hilton Head Island saw +/- 100% increase and these levels have not continued to increase during 2009. Overall market conditions show that on December 3, 2009 there were 268 ocean oriented homes active. With and average of 8.08 homes selling per month in the past 12 months, there are 33.27 months of inventory. For non ocean oriented homes, as of December 3rd, there were 764 active properties and the average per month in the past 12 months was 38.6. This gives us 19.7 month of inventory On Island. Ocean oriented condos active on December 3rd was 335 and the average for the past 12 months was 10.3 per month. Thus there is 32.5 months of inventory. Non ocean oriented condos active on December 3rd was 747 and the average per month for the past 12 months was 32.9 per month. Thus we have 22.7 months of inventory. Keep in mind, while prices have pulled back, consumers who know Hilton Head Island are still buying homes.

In the first 3 months of 2009, real estate sales were the lowest I have seen in 17 years. But beginning in April 2009 the consumer has continued to be more positive and sales for the second half of 2009 were 60-70% more than the first 4 months. Continuing with the positive trend, the past 3 months of 2009 have given the real estate industry an optimistic feeling about 2010. The first time home buyer tax credit will continue to help spur activity in areas of the country where a seller might be waiting to sell there home and move to Hilton Head. And that is a positive trickle-down effect!

Have a joyous holiday season and a great 2010!