Hot properties and interest rate uncertainty. Hilton Head housing market midyear update
The Hilton Head Area Realtors and Beaufort-Jasper County Association of Realtors released their June market reports earlier this month, providing insightful data on home inventory, prices, construction and days on the sale market for the first half of 2023.
Demand continues to outpace supply in both markets, causing prices to rise but more slowly than before the Federal Reserve began a series of quarter point bumps in prime rates. Between low inventory and increasing borrowing costs, they report markets are cooling down slightly.
The Hilton Head Area Realtor market reports includes information on properties sold north and south of the Broad River; however the largest areas of focus are Hilton Head, Bluffton, Daufuskie and Hardeeville.
The Beaufort-Jasper County Association of Realtor market reports include the most comprehensive data for northern Beaufort County and Jasper County.
How is it determined if it’s a buyers or sellers market?
Five to eight months inventory is considered a balanced market, and inventory increases when demand lessens and new listings keep being added to the market. When there isn’t a lot of inventory and prices are high it’s considered a sellers market and when there’s more inventory and prices are low it’s considered a buyers market. Months supply of inventory is calculated by taking the number of homes for sale at the end of a month and dividing it by the average monthly pending sales from the last 12 months.
To interpret the data, The Island Packet and Beaufort Gazette spoke with representatives from both groups. Here’s what the data looks like halfway through 2023, and what experts said about the following topics:
What’s happening with single-family property values in general?
Hilton Head area:
While there will be a second analysis of condos, villas and townhouses later this week, the median price of all properties, including residential homes, condos and villas sold in June was $529,362, bringing the average price for 2023 up to $505,038. It’s a 6.1% increase from this time last year when the average price was $475,960.
Last year, from 2021 to 2022, the average price mid-way through the year increased 23.1%. While prices are still increasing, they’re moving more slowly.
Beaufort Jasper County
The median price of residential homes, condos and villas sold in June was $410,875, bringing the average price up to $395,284 so far this year. It’s a 9.5% increase from this time last year when the average price was $361,000.
From 2021 to 2022 the average price mid-way through the year increased 18.7%. While prices are still increasing, they’re moving more slowly. Compared to Hilton Head, the prices in the Beaufort-Jasper area didn’t increase as much during the pandemic, but the Beaufort-Jasper area’s price increase is slowing down less now.
If you own a single-family home, what’s happening with your property’s value?
Hilton Head area
The median price of single-family residential home is $1.1 million so far this year, it’s a 10.6% increase from last year’s $995,000 median home price.
Beaufort-Jasper County
The median price of a single-family residential home, based on a 12-month rolling median, is $394,782 compared to $353,467 at this time last year. It’s a 11.7% increase.
Are there a lot of options for what home to buy?
Hilton Head area:
Market-wide, inventory levels — the number of active listings at the end of the month — are up 9.2% in June from June 2022. Single-family homes saw the largest gain and the number of properties for sale went up 13.6%. In terms of months inventory — the amount of time it would take for all current listings to sell if no new listings entered the market — there are 2.1 months of inventory for single-family homes.
President of Hilton Head Area Realtors Kathy Schroder has lived in the Lowcountry for over 30 years, said that pre-pandemic it was typical to see those who rent their property wait until the end of the vacation season to get the most out of their home before selling it.
“It’s possible that after the vacation season, some owners may decide to put their property on the market,” said Schroder, referencing a possible inventory increase in a couple of months.
Beaufort-Jasper area:
Inventory levels went up 4.6% in June from June 2022. There is less supply in the Beaufort-Jasper area than the Hilton Head area with 1.9 months supply overall and 1.8 for single-family homes. Overall, it’s still up 18.8% from this time last year.
It’s a cyclical situation according to Beaufort-Jasper County Association of Realtors Vice-President Mark Davis-Cote: people aren’t selling their homes because they don’t have their next property secured.
“They’re looking at up-sizing or downsizing their property and many of those people know that they won’t find something suitable to meet their needs,” he said. “They’re just staying in their houses and not putting them on the market.”
If you’re buying or selling, how long will it take?
Hilton Head area:
For all properties, homes are on the market for 39.8% longer than they were in 2022. The average time this year is 137 days compared to 98 days last year. For single-family homes they’re on the market 44.0% days longer on average from 109 days last year to 157 days this year.
Low average days on the market typically indicates a strong market that favors sellers.
“It all depends on the property, the condition of the properties, the urgency of the sellers,” Hilton Head Area Realtors CEO Jean Beck said.
Beaufort-Jasper area:
For all properties, homes are on the market for 14.1% longer than they were in 2022. The average times this year is 89 days compared to 78 days last year. For single-family homes, they’re up 13.8% from 80 days last year to 91 days this year.
If you want a new home or to build a new home, where should you look?
Hilton Head area:
Beck said much of the building is happening in Hardeeville; therefore, the reports show a lot of pending property sales in that area.
“I may put a property on the market right now under pended if I was a buyer, but it may not be built for nine months,” she said. “So I’m not closing for another nine months.”
Latitude Margaritaville is one of the hot spots for building. Last year at this time they had 647 homes under contract, and this year that number is 656, according to Schroder.
“That is a burgeoning market,” Schroder said. “Not everybody’s coming for the beach, people are coming to live in the area.”
Beaufort-Jasper area:
Davis-Cote said that most of the new development he sees are on Lady’s Island and Seabrook.
“Anywhere there’s a large parcel of land that a developer can afford the infrastructure (for) and have a good process with the county or the city, they’re doing that,” he said.
What impact do recent increases in prime rate have on the local housing market?
Many buyers in the Hilton Head area come in with cash, according to Beck, so the mortgage rate doesn’t have as much impact as it does elsewhere because many buyers don’t have to loan a lot of money to buy their home. In fact, Hilton Head has one of the top 10 average down payments in the U.S.
That being said, not everyone is able to buy their homes without taking out a major loan. Beck said people are less likely to sell if they would have to pay a higher interest rate than they have at their current property.
Schroder warned buyers take into account that when mortgage rates go down, prices may go up accordingly.
“If they’re waiting and the interest rate does come down and the price goes up (then) they’re in a neutral position,” she said. “They’re still going to pay more at a lower interest rate.”
This story was originally published July 26, 2023 at 8:30 AM.
