Living Well Blog - Hilton Head, SC

Today's Wall Street Journal cites notably increased sales activity and decreased cancellations for DR Horton and Beazer Homes - altogether a very good thing for the housing market.  For the full article click here.

As encouraging as that news may be, it's important to look beyond the headline.  Beazer Homes and DR Horton build quality affordable housing nationwide.  This segment of the market has experienced modest (relatively speaking) dips during the recession and is leading the charge with the market's recovery.

Buyers for these homes are able to leverage the Federal Governments tax incentives in a meaninful way, and are eligible for agressive Federally backed mortgages.  One could also argue that this buyer didn't see tremendous lifestyle changes when the stock market crashed in 08 as it's unlikely that (outside of a 401K) they were heavily vested.  If they were able to keep their jobs, life continued to move forward without tremendous change.

We're seeing similar trends in the Lowcountry.  The lower end of the market is recovering more rapidly than the top end.  Buyers in Hilton Head and Bluffton for homes priced below $250K, and in some cases homes priced below $500K, will lose the significant leverage they currently enjoy if they wait until we arrive at a balanced market.

See the graph below for an analysis of inventory levels by price point throughout the Lowcountry:

Six months supply has historically represented a balanced market.  More than six months supply was a buyer's market, and less than six months represented a seller's market.  In a healthy market, we should see entire inventory turnover every six months.

We are close to seeing a balanced market (where there is no appreciation or depretiation) for homes listed for less than $500K in the not too distant future in Hilton Head and Bluffton.  Buyers will continue, however, to enjoy significant leverage over properties listed for more than $1M in the coming months.

Call us (843) 757-7712 if you'd like more information on the market and curret opportunities to enjoy ownership.