Why Buy In A Recession?

Brief Island History

There have been 11 recessions since 1907 each lasting anywhere from 1 year to 3 years except during the Great Depression of 1929-1939.  More recently in the Low Country we have seen 4 price declines since 1990 with the following reasons for their price adjustments.

Even with these drops, home appreciation over the past 18 years in Sea Pines is 8.4% annually with the average price of a home in 1990 being $318,577 and bumping up to $1,025,503 in 2008.  Our peak was in 2007 when we had a large number of ocean and water properties sell that resulted in an average home price of $1,583,963.

Where Are We Now?

Many buyers are still reluctant to purchase now because of the following reasons:

1. They don't believe that prices have hit bottom

2. They need to sell another property somewhere else

3. They are just not comfortable making a decision now

4. They would rather wait until property starts moving

5. They want to see the economy begin improving

Although each of these reasons are very real to the buyer, upon further reflection each point should be looked at closer to see if they really are in the best long term interest of our buyers.

Now is the right time to buy on Hilton Head Island!

1. Just like the stock market, it is impossible to know when our prices are at rock bottom.  But unlike stocks the property you have found now that you really like won't be around when you decide to make a buying decision and probably not at the price it is now.  History shows that we are certainly close to bottoming out.

2. It is a tough situation when a buyer identifies a home they really want and can't pull the trigger because they haven't sold their property back home.  My strong recommendation is to lower the price of the other property so it will sell because you will probably make up the difference in what you buy here.  Also, the opportunity for appreciation is so much better in our area than most other locations in the country.

3. People shouldn't rely on feeling comfortable before they buy but rather being informed is much more important.  We all know feelings can come and go but knowledge is historically what makes buyers the most money and helps in their enjoyment of the property.

4. Most purchasers would rather wait until others start buying before they join in.  This is known as the "Herd Mentality" and historically works just okay but not as well as being a contrarian.  The folks who have purchased in down cycles are rewarded much greater than those who delay until their friends start buying.

5. Warren Buffett once said, "When we are greedy we should be fearful but when we are fearful we should be greedy."  Clearly there is still hesitation on the part of many buyers but the astute, informed person should be purchasing now.  Waiting until USA Today announces the recession is over and houses are selling again, you will be too late.  Prices will have bumped up and inventory smaller therefore choices will be reduced.

Summary

Recessions are difficult and making a buying decision at this time is not for the faint hearted.  But our history shows this cycle will begin to improve and those who have stepped up will benefit greatly.  Nothing about Hilton Head Island has changed, the beaches are pristine, the 4 seasons are terrific, the 30 golf courses and 300 tennis courts are superb and this talented and giving community of 38,000 wonderful residents are as vibrant as ever.  With low interest rates and still good supply, what are you waiting for?  Now is the best time to  Buy!  Call me soon so I can help you realize your dreams.

If you have any questions or would like updated information about real estate island-wide, please call or email me.  THANK YOU FOR YOUR GENEROUS SUPPORT AND REFERRALS!  Also, please let me know if you would like a FREE MARKET ANALYSIS of your property.  MY CELL PHONE # IS 843-384-6789.

Rob Reichel

Sea Pines Real Estate Company's #1 Agent!

"Top Ten" Island Realtor for 18 Years in a Row

Island Resident Since 1974

New Home Construction Expert

Sea Pines Property Owner for 15 years!

Life Member Distinguished Realtor Sales Award

Former Director of Tennis for Sea Pines, Shipyard & Port Royal Racquet Clubs

Put The #1 Pro To Work For You!

Office:  (843) 363-4036 * Mobile (843) 384-6789

Email:  rob@robreichel.com * Website:  www.robreichel.com

THANK YOU FOR THE OPPORTUNITY OF SERVING YOU!

Brief Island History

There have been 11 recessions since 1907 each lasting anywhere from 1 year to 3 years except during the Great Depression of 1929-1939.  More recently in the Low Country we have seen 4 price declines since 1990 with the following reasons for their price adjustments.

Even with these drops, home appreciation over the past 18 years in Sea Pines is 8.4% annually with the average price of a home in 1990 being $318,577 and bumping up to $1,025,503 in 2008.  Our peak was in 2007 when we had a large number of ocean and water properties sell that resulted in an average home price of $1,583,963.

Where Are We Now?

Many buyers are still reluctant to purchase now because of the following reasons:

1. They don't believe that prices have hit bottom

2. They need to sell another property somewhere else

3. They are just not comfortable making a decision now

4. They would rather wait until property starts moving

5. They want to see the economy begin improving

Although each of these reasons are very real to the buyer, upon further reflection each point should be looked at closer to see if they really are in the best long term interest of our buyers.

Now is the right time to buy on Hilton Head Island!

1. Just like the stock market, it is impossible to know when our prices are at rock bottom.  But unlike stocks the property you have found now that you really like won't be around when you decide to make a buying decision and probably not at the price it is now.  History shows that we are certainly close to bottoming out.

2. It is a tough situation when a buyer identifies a home they really want and can't pull the trigger because they haven't sold their property back home.  My strong recommendation is to lower the price of the other property so it will sell because you will probably make up the difference in what you buy here.  Also, the opportunity for appreciation is so much better in our area than most other locations in the country.

3. People shouldn't rely on feeling comfortable before they buy but rather being informed is much more important.  We all know feelings can come and go but knowledge is historically what makes buyers the most money and helps in their enjoyment of the property.

4. Most purchasers would rather wait until others start buying before they join in.  This is known as the "Herd Mentality" and historically works just okay but not as well as being a contrarian.  The folks who have purchased in down cycles are rewarded much greater than those who delay until their friends start buying.

5. Warren Buffett once said, "When we are greedy we should be fearful but when we are fearful we should be greedy."  Clearly there is still hesitation on the part of many buyers but the astute, informed person should be purchasing now.  Waiting until USA Today announces the recession is over and houses are selling again, you will be too late.  Prices will have bumped up and inventory smaller therefore choices will be reduced.

Summary

Recessions are difficult and making a buying decision at this time is not for the faint hearted.  But our history shows this cycle will begin to improve and those who have stepped up will benefit greatly.  Nothing about Hilton Head Island has changed, the beaches are pristine, the 4 seasons are terrific, the 30 golf courses and 300 tennis courts are superb and this talented and giving community of 38,000 wonderful residents are as vibrant as ever.  With low interest rates and still good supply, what are you waiting for?  Now is the best time to  Buy!  Call me soon so I can help you realize your dreams.

If you have any questions or would like updated information about real estate island-wide, please call or email me.  THANK YOU FOR YOUR GENEROUS SUPPORT AND REFERRALS!  Also, please let me know if you would like a FREE MARKET ANALYSIS of your property.  MY CELL PHONE # IS 843-384-6789.

Rob Reichel

Sea Pines Real Estate Company's #1 Agent!

"Top Ten" Island Realtor for 18 Years in a Row

Island Resident Since 1974

New Home Construction Expert

Sea Pines Property Owner for 15 years!

Life Member Distinguished Realtor Sales Award

Former Director of Tennis for Sea Pines, Shipyard & Port Royal Racquet Clubs

Put The #1 Pro To Work For You!

Office:  (843) 363-4036 * Mobile (843) 384-6789

Email:  rob@robreichel.com * Website:  www.robreichel.com

THANK YOU FOR THE OPPORTUNITY OF SERVING YOU!

Current Trends

As we compare the year end numbers of 2008 with 2007, our sales activity remains off in Sea Pines but mixed throughout the island.  Unit sales of homes are down 20% with 134 houses sold in 2008.  Days on the market have jumped 8% to 161 before a property sells and current inventory has increased 2% to 227 residences currently listed.

Sea Pines villa sales are down 26% from 2007 with 60 sales in 2008.  The average price of a villa has bumped up 11% to $656,494 because of more beach and water view sales.  Days on the market has increased 20% to an average of 164 days before a property sells and the number of villas currently is 156 up 20% from 2007.

What Can You Expect?

As I write this report on Inauguration Day, we are clearly experiencing volatile times with much uncertainty.  But there ARE communities throughout Hilton Head that have shown improved sales activity this past year that should encourage all of us.  Homes sales in Palmetto Dunes are off just 11% with the average price of a home virtually identical to 2008 at $1,263,498.  Long Cove sales are close to last year's numbers and Wexford and Forest Beach home activity actually increased!  On the mainland this trend continues with home sales in Rose Hill and Sun City up 3% and 6% respectively.

With all the doom and gloom being reported it is important to note that we sold over $1 billion in property for 2008, the fourth best year ever.  No one can time perfectly when the bottom has hit but we are definitely seeing strong indicators in certain market sectors of the island.  This should bode well for the 2nd quarter of 2009 when many economists believe housing prices will begin to rise.  Historically, the Low Country has recovered quicker than other parts of the country.

With lower prices, incredible interest rates and a selection of high quality properties, you should be taking advantage of this unique opportunity to purchase now!

Now is the perfect time to buy on Hilton Head Island!

THANK YOU FOR YOUR GENEROUS SUPPORT AND REFERRALS!  If you have any questions or would like updated information about real estate island-wide, please call or email me.  Also, please let me know if you would like a FREE MARKET ANALYSIS of your property.  MY CELL PHONE # IS 843-384-6789

Positive Trends

As we compare the first 4 months of 2008 with the same period in 2007 our sales are down.  Home activity island wide is off 12% with 511 homes sold so far this year averaging 138 days on the market.  Villa sales are down 38% to 146 sold with the average time to sell a villa increasing to 164 days.  Villa sales should bump up this summer as our busy season approaches.  Homesites are off 36% to 70 sold through April averaging 217 days before selling.

What Can You Expect?

Clearly it is still a Buyer's Market with tremendous selection and values throughout the entire island.  The fundamental appeal of Hilton Head Island and its unique character has not changed and we should recover quicker than most areas of the country.  The top 10 reasons it's a great time to buy now are:

1. Selection-we now have twice as many properties for sale vs. 2005

2. No bidding wars-competitive offers on the same property are rare

3. Make an offer-sellers are much more accepting of reasonable offers

4. Patience is rewarded-buyers can take their time before making an offer

5. Thorough inspections-sellers are more willing to correct more repairs than ever before

6. Spec Homes-there is a good supply of spec homes especially near the beach

7. Updated homes-sellers have already made considerable improvements to their property in order to help sell them

8. Fewer investors-buyers are getting properties fairly priced for real buyers

9. Location-buyers are finding more properties closer to the areas they really desire

10. Real financing is back-better rates to credit worthy buyers is available

Now is the right time to buy in Hilton Head Island!