Originally published by Rick Hoel in Bluffton Today in August, 2007.

Although 2005 spawned one of the "hottest" real estate markets in Beaufort County history, today prices have declined significantly and there is real debate about when to expect a turn-around.  There are now over 6200 listings in the Hilton Head Area Multiple Listing Service.  Two years ago there was a third that amount.

But tough times encourage long term thinking and discerning buyers and sellers who carefully examine the unique characteristics of our market can be successful.  Here are a few of the factors that distinguish our market from Miami, Pittsburgh or Peoria, features which may otherwise go unnoticed in a rising market where good decisions are not necessarily rewarded or bad ones punished.  These are some of the factors that international investors scrutinize in making investment decisions:

Appreciation  

The Hilton Head "story" is unique.  We got a late start.  Until 1956, there were no bridges to the Island.  There was no electricity or telephone service and island travel was by horse drawn cart on dirt paths.  When Charles Frasier acquired Sea Pines he found a "clean slate" untouched by development and was able to develop a world class resort model that set the stage for phenomenal capital appreciation.  Despite the recent downturn, for the past 10 years, the average price for a single-family home is up 63.7%.  Villas are up 168% and lots have increased 145%.

Value

For all this appreciation, if one compares the Hilton Head area to other world-class coastal communities, real estate here is an exceptional value.  The highest price oceanfront property on Hilton Head is $9M.  Oceanfront properties at comparable coastal areas are much pricier:

                          Miami Beach               $15M

                          Palm Beach                  $28.9M

                          Naples                         $18.5M

                          Sea Island                    $19.8M

                          Outer Banks                 $27M

Resort Effect

Hilton Head's world-class reputation can't be overstressed.  Tripadvisor.com has ranked our area as one of the top 5 golf vacation destinations in the world.  The Island's infrastructure is the beneficiary of hundreds of millions of investment dollars and over 2 million visitors are drawn here annually. 

What many don't realize is that even better values are available in areas surrounding premier resort locations.  This point was captured about Bluffton in the July 15, 2007 issue of Parade Magazine:

"A lot of places are brand names, but just because they're more expensive doesn't mean they're the best investment," says Andrew Schiller, president of Location, Inc., which runs the search site Neighborhoodscout.com.  "People have heard of Hilton Head - it's very famous and expensive - but just a town away is Bluffton, S.C. where homes are 20% to 25% less.  You want to find places that are in the best position to run up in value and, of course, that you love."

Southeast Center

For several years we've heard that the Hardeeville-Bluffton corridor is poised to grow over 800% in the next 15 years.  There are three reasons to heed these predictions - location, location, location.  Locals know that the "Exit 8 to 170 Corridor" links downtown Savannah, Beaufort and the Hilton Head beaches but folks viewing from afar see a bigger picture - a southern nexus only a short distance from Greenville, Charleston, Columbia and Augusta and not much further from Florida, Atlanta and the north Georgia mountains.

Importantly the corridor is acting as if it's important as well.  It's telling that a major University and College now call western Beaufort and eastern Jasper Counties home to their newest campuses.  The USCB New River campus has already had an impact and is meeting growing regional needs with community outreach and continuing education programs.

Look Who's Coming

Over the next 30 years the largest single group of Americans in history will be moving.  75.8 million Americans were born between 1946 and 1964.  With a total 202 million born between 1940 and 1994, one can easily see the impact that 75 million retiring boomers will have on American life.  Kiplinger predicts that the population of our "Sun-Belt" will increase by 52%, with most of that growth along the coasts. 

This may not soothe the sting for homeowners who must sell today, but we should be encouraged with the long term prospects for our market.  All of these characteristics are dynamic.  How they evolve and influence our growth will depend upon the decisions we make over the next several years.  That we live in an area so new in its development that we can realistically influence the outcome is perhaps the most compelling silver lining of all.

c2007 Rick Hoel