At the end of 2016, most real estate markets across the nation saw little change year over year.
But our local market activity doesn’t always follow national trends, and there can be big differences between sales on Hilton Head Island and the mainland.
The Hilton Head condo/villa market ended 2016 down just 2.7 percent from 2015, but prices are starting to increase, with the median sales price up 6.7 percent from 2015 at $221,500. Single-family home sales for Hilton Head almost mimicked the condo/villa market, with closed sales down from 2015 by 4 percent and the median sales price up 1.8 percent at $519,250. However, the mainland market tells a different story. Closed sales were up 11.8 percent and the median sales price up 6.2 percent, at $270,584.
You can see by the numbers that Hilton Head Island and the mainland are two different markets that attract very different buyers. The mainland market also has more development than the island, and therefore has more inventory. However, at the start of 2017, the Lowcountry has a low inventory of available homes, with approximately a six months’ supply.
With a new president office in 2017, few are expecting federal policies to remain as they have under prior leadership. The incoming president has a deep history in real estate development and has shown a strong interest in funding massive infrastructure projects — two points that have experts wondering about their impact on the immediate future of residential real estate.
Millennials continue to command attention as the next wave of homebuyers, yet the rate at which this massive population is entering the market has been less than stellar. This may be due to a cultural change away from settling into marriage and parenthood until later in life, high student loan debt, or even reservations about real estate as a wise investment in the wake of what the Great Recession. That said, some have suggested that this group is simply willing to wait longer to buy, thus skipping the entry-level purchase altogether to land in their preferred homes.
At the other end of the age and price spectrum, baby boomers are expected to make up nearly one-third of all buyers in 2017. By and large, this group is not looking to invest in oversized homes, but we could see an improvement in higher price ranges as a hedge against inflation and risk. Shifting wealth away from the stock market into valuable homes may be seen as a safe bet during a transition of power and a period of pronounced change.
Locally, Realtors are very optimistic about the year ahead. Real estate firms are investing in their businesses and growing. The Hilton Head Area Association of Realtors starts the year with just over 1,100 Realtors serving customers and clients from Hilton Head Island to Jasper County.
Jean Beck is the executive vice president of the Hilton Head Area Association of Realtors.