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Sales in the eight-county MLS region increased 103 percent in January compared to January 2009 and took a 64-percent jump in February from February 2009, according to areport Tuesday from the S.C. Realtors trade group.
The Beaufort MLS area has also experienced two months of increases, with a 4.9-percent increase in January and a 15.9-percent jump in February.
Those numbers point to a residential real estate market that slowly is recovering, a trend area Realtors and industry professionals say is because of low interest rates, federal tax credits for home buyers and low prices.
But as prices in the area fall and homes continue to come on the market -- in part because of a large number of foreclosures and short sales -- the local industry will not fully recover this year, said Todd McDaniel, president of the Beaufort County Association of Realtors.
"I'm encouraged by the numbers, but demand probably won't outpace supply for a time, possibly for between 18 months and two years," McDaniel said. "I don't think we'll see a substantial turn downward, but those two lines won't probably cross until early 2012. We're heading in the right direction, though."
Wallace Thomas, a Realtor with Century 21 Carolina Realty in Beaufort, said foreclosures are driving prices down. The median price in the Hilton Head area is down 25 percent in February to $215,000, while Beaufort's median price dropped 11.9 percent to $148,000, according to S.C. Realtors.
"We're getting good activity, but we're not getting the prices we want," Thomas said. "What's hurting us is the large volume of homes that were built in the Bluffton area. People can buy a larger foreclosure home with a two-car garage for way less."
A federal tax credit of $8,000 for first-time home buyers boosted sales in the region last fall, said Charles Sampson, a Realtor with Charter One North and president for the Hilton Head Area Association of Realtors. With the tax credit extended until the end of April and expanded to buyers who have not purchased a home in five years, people are rushing to take advantage of the credits.
"Interest rates are still good, and hopefully, we'll see sales continue through the end of April," Sampson said. "But a new wave of foreclosures threatens the market. Prices are still adjusting downward, and we're not sure whether we've hit the bottom yet."
Some industry professionals, however, are wondering what will happen when the tax credit expires April 30 -- and if there is a rise in interest rates, which have been below 5 percent for a 30-year mortgage recently.
"Have the federal programs stabilized the market enough so that when they end the markets can be self-sustaining? That's the question we're trying to answer," S.C. Realtors executive director Nick Kremydas said.
Tom Jackson, a Realtor at Gateway Realty in Bluffton, said the tax credits and short sales -- an agreement between the lender and an owner to sell a home for less than what is owed on the mortgage -- have been great incentives for buyers looking in Bluffton.
"There are a lot of short sales in our market, which takes a lot more effort and time, but it's bringing in buyers," he said. "Every little bit helps."
The (Columbia) State contributed to this report.
