REAL ESTATE SEES SHIFTS, REBALANCING AND PENT-UP DEMAND
BY DEAN ROWLAND
“People see the news and it’s all doom and gloom, right, but it’s really not the case at all,” said Rick Saba, of COAST Real Estate Professionals brokered by eXp Realty.
“The public perception here is that the market is tanking or really slowing...It’s simply not the case from every price point,” he said. “We’re in what’s called a transitioning market.”
There’s a shifting and rebalancing of the market between seller and buyer, a natural flow of periodic market movements with several confluences at work.
“When I sit down with buyers and sellers about the market, I explain that we definitely have felt a slowdown, softening a bit,” said broker Becky Herman with Herman and Davis Properties, of Charter One Realty.
“But yet you still have this pent-up demand of people that want to own property here,” she said. “If a property is priced correctly, they’ll jump on it, especially if it’s the best deal they’ve seen in a year or two.”
“Properties that need renovation are not moving as quickly as those that are turnkey. Buyers for the first time in a long time are negotiating with conditions in their contract like inspections and financing contingencies,” she said.
Year-to-date data from 2021 through June 2022 compiled by the Hilton Head Association of Realtors shows that new listings, pending sales, closed sales and days on market are down.
However, median sales price, average sales price, inventory of homes for sale and months’ supply of inventory are all up year over year.
The median sales price in the Lowcountry spiked 28.7 percent through June 2022 over the previous June to $514,846. The average sales price jumped 19.8 percent to $780,346, and the inventory of homes rose 23.8 percent to 868, while the months’ supply of inventory topped 60 percent to 1.6.
“We understand that with (interest) rates rising, we’re going to lose some buyers to affordability issues,” Herman said. “So right now their payments are going to be twice as much. They’re not 3 (percent); they’re 6 now.
“Combine that with the stock market dropping 30 percent, and people don’t feel quite as wealthy as they did which could cause them to delay their purchase.” she said.
It’s still a sellers’ market but nothing like recent history before and during the pandemic.
“For the last couple years, we were in a super strong sellers’ market, meaning someone would come on the market on a Saturday and have five or six offers over list price by Monday,” said Saba, who joined sales forces with Tristan O’Grady to form COAST Professionals earlier this year with a staff of 15.
“It’s still a sellers’ market because there’s less inventory than buyers’ demand,” he said. Less inventory will still favor the sellers. “The property might sit on the market a little longer, and we might see some price drops and it’s not necessarily a negative thing. Sellers need to get their properties in a position to sell.”
While the inventory of homes for sale and the monthly supply of inventory have both risen year over year, a typical stable market sits at six months’ inventory supply. The market has ground to make up before that happens. If homes are overpriced and the inventory is low, then sales will be down.
Waterfront homes, whether ocean or deep well, will never lose their luster in the market; but for all the others, pricing and condition will determine if they sink or swim in the eyes of potential buyers.
One constant in the market is that homes selling for $350,000 or less in Bluffton and $500,000 or less on Hilton Head are clear of choppy waters in the market. The crystal ball might be a little hazy now, but those who remember the 2008-09 recession believe another recovery, if not as dramatic, is just around the river bend.