Hilton Head / Bluffton Real Estate Market Update | 3rd Quarter 2021
The third quarter of 2021 presented some subtle signs of softening in the overall market, bringing about some much-needed inventory that fueled an impressive number of sales for the overall market area.
Impressively, at the end of the third quarter, the market’s average closed sales price has risen to $595,000… a whopping 21% increase from the same time in 2020!
Not only has the lower-price-range inventory dried-up, but there have been an increasing number of upper-end sales as waterfront properties have been on high demand throughout the year.
2021 Real Estate Steering Factors Update
The appeal of the Lowcountry has reached the broadest audience in its history, which is now yielding buyer interest from a record number of states. Year to date, Collins Group Realty has represented buyers from over 2 dozen states, including California, where a variety of factors are creating a growing number of people exiting that state.
LOCAL SUPPLY AND DEMAND TRENDS
We continued to track the relationship between new listings and new pending-sales throughout Q3, and the graph here shared some interesting trend-lines.
We’ve marked with arrows each instance when these market vitals have crossed paths, including May 2020 when the market began to “take off,” April 2022 when new inventory began to overtake sales, and September 2021 when we once again saw that sales outpaced new listings. As these two metrics follow each other pretty closely from a macro perspective, it’s the micro view of this “dance” that has us continually intrigued when it comes to determining buyer and seller strategies and behaviors. Right now it’s anyone’s best guess how 4th quarter will shape their respective trend lines.
SALES PRICE TO LIST PRICE RATIOS
In the second quarter, we reported that June 2021 produced the first ever time that the Sales Price/List Price ratio topped 100%, and since that time it has settled back into the upper 90%’s.
We’ve been tracking the number of instances when a property in our market sold AT List Price as well as the number of properties that sold OVER List Price, take a look at the chart here to see our findings.
As you’ll see, the peak was back in June 2021 when the historical data-point was set, and the trending has dropped pretty sharply since that time. Certainly, many properties still sell at or above list price, but not as many, and that could be a factor of buyer motivation or perhaps also a function of seller pricing being too aggressive in some instances, requiring price negotiation before a seller and buyer can come to terms. If/as buyers have more choices, the expectation for something to sell at or above list price will diminish.
NEW CONSTRUCTION – UPDATE
In the second quarter, we reported on how new home developments have been the savior against a low inventory of resale homes, but the sharp jump in buyer-contracts has come at an inopportune time when supply chains for building materials are deeply challenged. The net-result is that while developers are honored and excited about having so many orders/contracts to build homes, they simply can’t keep up with the demand, and building completion timelines are being stretched further and further into the future. So, if new construction is a viable option for a buyer, the order of the day is patience!
THE HOLIDAY MARKET – BUSY OR BUST?
COVID has made prognosticating a challenge as so many unprecedented and unexpected factors have woven their way into our current (and near term) future way of life. Therefore, as we look ahead into the final stretch of 2021 amid year-end holidays, we are watching with curiosity and anticipation on how the real estate market will play out…will the strong buying trends continue, or will the distractions of holiday celebrations, travel and well-deserved rest-and-relaxation dominate the minds and time of otherwise-would-be consumers.
We’re not able to make a solid prediction on the Q4 market, but we do hope for a few clear and prevalent themes to emerge, those being peace, health and happiness as this fascinating year comes to an end.
If you’d like more detailed stats, head over to the September 2021 Market Report