April 2018

2018: This Year Will Change Everything

Author: Philip A. Schembra

So far, 2018 is shaping up to be one for the history books. Even setting aside the real estate market (which I’ll return to, I promise), this is a monumental year for Hilton Head Island. You have the RBC Heritage presented by Boeing celebrating its fiftieth tournament. You also have my home turf, Palmetto Dunes, celebrating its fiftieth anniversary.

But that’s far from the only reason 2018 is looking to be historic. If early signs are any indication, 2018 is going to be a watershed year for island real estate. Typically, the real estate selling season doesn’t begin until March. We were far from sleepy during January and February, but they are still not months in which realtors generally see a lot of movement.

That changed this year. In my 42 years of real estate in Palmetto Dunes, Shelter Cove, Leamington, and on Hilton Head Island, I can honestly say I’ve never seen anything like what we witnessed in January and February of this year. Sales were strong across the board, from oceanfront homes to condos. If you’re truly interested in looking under the hood, I can tell you the cold hard numbers. But for the purposes of this article, suffice it to say it’s been a great start.

I’m not alone in this assertion, either. I spend a lot of my time conferring with other members of the real estate community, and I’m hearing good news without exception. It’s rare to see so much positive news so early in the year.

Keeping in mind how this is usually our slower season, we were also bracing ourselves for whatever impact the recent interest rate increases might have. If I may speak with cautious optimism, so far, we have not observed any negative effect. Thankfully, the particularities of the Hilton Head Island market shield us somewhat, in that we have a finite amount of supply and are historically known for our quality. Given all of this, I’m confident that interest rates will not be a barrier to sales on Hilton Head Island.

Another factor that points to a strong 2018 is the current state of the stock market. After 42 years in real estate, I’ve seen our local real estate market respond to bull markets and bear markets. And in those 42 years, I’ve seen it time and time again: when the stock market is soaring, we reach a tipping point wherein people start pulling money out of the stock market and putting it into real estate. In case you hadn’t noticed, the stock market has been hitting record highs.

Of course, this anecdotal evidence supports all the mountains of research showing how low our prices are compared to other high-end resort communities on the East Coast. If you dig into the numbers, you’ll find that up and down the coast, prices have returned to their pre-recession levels, while ours have remained stagnant. We are a resale community, with no new inventory on the horizon, and I can’t stress enough how much more we should be valuing ourselves.

If you look at these other communities, you’ll see real estate values that have kept pace with the rising tide of the housing market. Yet you won’t find that here, on an island that has been called the Top Island in the U.S. by Conde’ Nast and #1 Island in the Continental U.S. and #2 Island in the World by Travel + Leisure magazine.

You won’t find it on an island that has invested millions in itself, re-emerging from a slate of a capital improvement projects as a beautifully transformed paradise. How is that possible? Our property prices should be in a completely different league from other oceanfront residential resort towns.

As I look back on my years in the real estate business, I also look forward to where our prices could be five, 10 or 20 years from now. I look forward, and I’m hopeful. Because right now our prices are back where they were before the boom years of 2005-2007.

We have millions of dollars of infrastructure investment, accolades from media outlets all over the world and a robust economy telling us that we’re worth it. How do we reinforce this? By spreading the gospel. Right now, Hilton Head Island is undervalued for the quality of life it provides to homeowners. Its natural beauty and world-class amenities make it a tremendous place to build priceless family memories. Its bargain prices make it the perfect opportunity for those looking to round out their investment portfolio. But those prices won’t last—not if we can get the word out. So, tell a friend about Hilton Head Island. Referrals are always the best source of business.

Philip A. Schembra is broker-in-charge of Schembra Real Estate Group, located at 50P Shelter Cove Lane in The Plaza at Shelter Cove on Hilton Head Island. Contact Schembra at (843) 785-2452.

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