Full Year Report - 2017 SPECIAL INSIDER REPORT
7 REASONS WHY THE TIMING IS EXCELLENT
TO BUY REAL ESTATE IN THE HILTON HEAD ISLAND-BLUFFTON AREA CARPE DIEM The Smart Buyer’s Guide to Seizing the Opportunities Available in this Historic Real Estate Market
To meet or speak with an Advisor: +1 843-715-4422
HiltonHeadBluffton@evusa.com www.HiltonHeadIslandBluffton.evusa.com
2017 SALES AT ALL-TIME HIGH
REASON
The best year for home sales...ever!
#1
2683
3202
2737
2354
2053
1782
1600
1917
1588
2031
2631
20
20
1000
20
1500
20
2000
20
2500
20
Number of Homes Sold
3000
3011
3500
3471
Homes Sold in Each Year, 2005-2017 Hilton Head Island/Bluffton
500 0 17
20
16
20
15
20
14
13
12
20
11
20
10
20
09
08
07
06
05
20
Home sales in the Hilton Head Island-Bluffton area in 2017 were the best ever according to historical MLS records. As depicted in the chart, 3,471 homes sold in 2017 far surpassing the pre-recession peak year of 2005. We are not aware of any markets in the US that have experienced a record-setting year.
HOME PRICES ARE ON REASON THEIR WAY UP
#2
Up 3.4% Over the Previous Year
Because of the sustained improvement of the last seven years in the number of sales, the median price of homes, according to MLS data, is on the way up. The median price of homes sold in 2017 was 3.4% over 2016. The good news is that homes are still 23% below the Pre-Recession peak set in 2005.
Median Price of Homes Sold Each Year
Median Prices of Homes Sold Hilton Head Island/Bluffton 2005-2017
$500,000 $430,000
$400,000
$378,000 $383,000 $333,000
$325,000
$300,000
$283,000
$322,000 $305,000
$253,000
$280,000
$266,000 $259,000
$275,000
$200,000 17 20 16 20 15 20 14 20 13 20 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20
AVOID PAYING MORE NEXT YEAR Those wanting to own real estate in the Hilton Head Island - Bluffton area may want to seriously consider buying now. If the appreciation rate is 3.4% again in 2018, the extra cost of waiting a year to buy a $500,000 home would be $17,000.
IF YOU’RE BORROWING, REASON MONEY IS AT HISTORIC LOW RATES
#3
Annual Average-Commitment Rate On 30-Year, Fixed-Rate Mortgages Since 1978
13.88%
‘14
‘15
‘16
4.00%
‘13
3.949%
‘12
3.65%
‘11
3.85%
4.69%
4.45%
6.03% 5.04%
6.41%
6.34%
5.87%
5.84%
6.54%
8.05% 6.97%
7.44%
‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
4.26%
‘78 ‘79 ‘80 ‘81
4.16%
0
5.83%
5
6.94%
7.81%
7.60%
8.38%
7.93%
7.31%
9.25%
8.39%
10.32%
10.13%
10.34%
10.21%
10.19%
12.43%
13.24%
16.63% 11.20%
10
9.64%
Interest Rates
13.74%
15
16.04%
20
‘17
Year Amazingly, 30-year fixed-rate mortgages have been hovering around 4.0%. The chart above displays the historic proportion of today’s rock bottom interest rates with graphic clarity. The interest rates of the last six years are below all previous records which have been tracked by Freddie Mac since 1978. Mortgage money has never been “cheaper” at a time when home prices are still very attractive. These history-making low rates combined with home prices that are still 23% below the pre-recession peak make the monthly cost of owning a home today astoundingly affordable - see Reason #4.
There is no place for current interest rates to go but up. With rates expected to rise over the next year, many savvy home shoppers are taking advantage of the opportunity to buy an undervalued home with cheap money. For every 1% rise in interest rates, buyers will pay 10% more in monthly principle and interest payments; a crucial fact that is often overlooked.
Freddie Mac Mortgage Rates 30-Year, Fixed-Rate
One thing seems certain; we are not likely to see average 30-year fixed mortgage rates return to the historic lows experienced in the last six years.
THE COST OF WAITING REASON COULD EASILY TOP $262/ MONTH
#4
DATE HOME PRICE DOWN PAYMENT Today 2019 1st Quarter
MORTGAGE
INTEREST RATE
MONTHLY P&I
$500,000
$100,000
$400,000
4.10%
$1,933
$517,000
$103,400
$413,600
4.90%
$2,195
(Projected 3% Appreciation)
(Projected)
WAITING A YEAR TO BUY A HOME WOULD COST: EXTRA MONTHLY COST
EXTRA ANNUAL COST
$262
$3,144
THE STAMPEDE OF BABY REASON BOOMERS HAS ARRIVED
#5
Prior to 2011, 3300 people per day turned 65. Beginning in 2011 and continuing for 18 years, 10,000 people per day will turn 65! The Baby Boomer Generation is having a huge impact on sales in the Hilton Head Island - Bluffton market. In a recent USA Today survey, 42% of Boomers report they want to retire to the Southeastern US, with the Carolinas now trumping Florida as the preferred destination. Isn’t this the perfect time to buy before the huge Boomer stampede drives prices up further?
CREATIVITY ENABLES BUYERS TO SAVE REASON SUBSTANTIAL AMOUNTS OF #6 MONEY We’ve had dozens of clients during the past year that weren’t planning on moving here for several years or who were planning to buy their second home “down the road”. As they perceived the value of buying at today’s prices and interest rates they couldn’t let their dream home slip away. How did we help our clients take advantage of this incredible opportunity even though they “weren’t ready to buy at that time”? Through creative thinking and alternative options!
SELLER LEASEBACK
BUILDER LEASEBACK
•
•
Sellers have leased back their homes for up to two years
Some builders will leaseback their home for a year or so as a model home
LONG-TERM RENTAL
401K FUNDS
•
•
• •
Excellent long-term rental companies in the area Thorough client knowledge Rents are up due to rise of renters
•
Transfer some 401K funds into real estate rather than keeping it all in the stock market It still qualifies as a 401K
TEMPORARY 2ND HOME
CREATIVE FINANCING
• •
•
•
Clients are looking for the future Outstanding deals are driving earlier purchases of second homes Second home is used a few months of the year and/or shared with family
•
Bridge loans, home equity loans, 401K loans, seller financing, negative amortization loans and more The banks are eager to lend to qualified buyers
BUILD
DELAYED CLOSING
•
•
•
Building lots have appreciated substantially in the last three years but are still 57% below the peak prices set in 2005 It is an excellent time to pick up a lot and build
Some clients have bought properties with a closing delayed for 4 to 8 months
LIFE IS SHORT REASON
#7
Why wait to enjoy the Hilton Head Island Bluffton Year-Round Lifestyle?
SEMI-TROPICAL MARTIME FOREST Thousands of centuries-old Spanish moss draped live oak trees
HERITAGE & HISTORY
BIRD LOVERS REJOICE
Some of the most monumental moments in American history occurred between Savannah and Charleston
Spot over 250 varieties of birds throughout the year
JANUARY
59°
FEBRUARY
DECEMBER
69°
61°
Mid-Day Avg. Temperature MARCH
NOVEMBER
67°
69°
EXCELLENT EDUCATION
STRONG ECONOMY With over 2.5 million annual visitors, the local economy is electric
APRIL
OCTOBER
76°
77°
MAY
SEPTEMBER
84°
81°
JUNE
AUGUST
86°
89°
FAMILY FRIENDLY
JULY
89°
Wide variety of incredible signature amenities for all ages
12 miles of wide, sugar-sand beaches
Many public and private schools and home to the University of South Carolina Hilton Head Gateway Campus
FIRST CLASS MEDICAL CARE Superior medical facilities in Hilton Head, Beaufort, Savannah and Charleston
TOUGH LAND COVENANTS Protects natural beauty and prevents over development
ENGEL & VÖLKERS - WHO WE ARE
L
et us introduce you to the global brand the Hilton Head Island and Bluffton real estate market has been craving. Engel & Völkers is an elite organization of real estate Advisors who want to personally re-create the perceptions of this industry by exceeding your expectations and being a resource to you, for life. Real estate agents help their clients buy and sell homes, Engel & Völkers Advisors do more! They offer you guidance and insight in ways not every agent can. In fact, we designate our agents as “Advisors” to better define the higher level of service we provide. We consistently deliver high levels of service experience throughout the world by managing performance at every level. We are highly selective of the agents who join us. We approach top performers with proven track records and real estate professionals who are well respected in the community. A deep commitment to client service is essential. Our Advisors start out great and always strive to be better. At Engel & Völkers Hilton Head Island-Bluffton, we do more than just provide fantastic real estate services. We deliver excellence, and we do it with passion! Our Founder and CEO, Christian Völkers says, “Quality product offerings, premium service, and innovative thinking never seem to go out of style.” We couldn’t agree more, and that’s why we take it to heart. These ideals, as well as our own style and love for the Lowcountry, continue to be our daily motivation. Simply put, we are a premium service company whose Advisors happen to know and love the real estate industry.