I made a prediction after the election that the real estate market would pick up the day after the Obama was inaugurated.

After the election and before the inauguration I thought the press was very negative on the economy.

My thinking would be that as soon as Obama was elected, they would want the economy to turn around so they would start reporting good news rather than bad news.  Obviously, I was wrong. 

All you have to do is look at the headlines over the last several days where it talks about the economy to worsen, unemployment going up, real estate prices dropping and large inventory of homes available – one bad thing after the other.

I really do not understand this because I really felt like it would turn around.  Maybe it will soon; there is a lot of confusion as to how much stimulus is in the stimulus package – it seems to be more “pork” than stimulus in my personal opinion. 

I think there are some great ways to stimulate housing.

The real estate market will turn around, but in the meantime there are some great buys out there for people who are willing to purchase at this time.

Jane was talking to me about the half price sale at Outdoor Hilton Head.  Even with the slow economy there was a line around out the door and she had to wait to get in the door.  She said it was like a $1 sale at Walmart – people were grabbing things off the shelves.

I think this shows how people are looking for a value in today’s market – this applies to real estate as well.  People will buy if they feel like they are getting a deal.  If they do not feel like they are getting a deal, they will wait for the market to bottom out.

All you have to do is look at the local newspaper; yesterday the headline read “Economic Forecast to Worsen”.  Obviously, anyone understands that if the press is saying that the economy is going to get worse, people are not going to buy today unless they are getting a deal.

I do not expect us to sell our property at 50%, but there are a number of motivated sellers that for whatever reason, have said they would sell at whatever price it would take to sell in today’s market.  I had one of those this weekend in Port Royal Plantation and the seller said he wanted it sold and adjusted the price.  Even in this slow market, there were some buyers and we had some people look at the house.

What does all this mean – my wife got a great deal on a coat at Outdoor Hilton Head and you can get a great deal on real estate on Hilton Head if you are ready to act today.

I recently had a seller call me who said they were thinking about dabbling in real estate.  I asked what he meant and he replied that he might want to sell his house if he could get what he was looking for.

I informed him that this was not the time to just throw it out there and see what happens because the market is extremely slow and only the people who are “real sellers” will be able to get top dollar in today’s market. 

His thinking was that he would just throw it out there and if I found someone who was willing to pay his price he would sell. 

Then I asked him the hard questions; how does your house compare to the one three doors down from you that is priced $1 million less than yours, is three years newer and is 200 square feet larger and is on a similar lot.  His answered that he was not interested in competing with them, but if we found someone who liked his house he would sell it at my price.  I told him that he did not understand – nobody is going to pay him $1 million more when they can buy a house for $1 million less that is a newer, larger house on a similar lot.  I do not think he really understood that because he kept reiterating that if I found someone he was willing to sell.

I told him he had two options; he could price the property at the price it would sell in today’s market or he could wait until the market turns around.  I think these are the only options a person has in a slow market.  “Dabbling in a slow market” is a total waste of time.

I recently spoke to a friend of mine who is one of the top real estate agents in Colorado.  She said that selling in a slow market is like standing in the grocery store line; it is a very long line and people keep cutting in front of you.  In theory, as long as people keep cutting in front of you, you will never reach the front of the line.

Being in the middle of the pack will not help you sell in today’s market.  The only thing that sells is the the property at the front of the line. 

For example, say there are 25 Evian Villas listed for sale on Hilton Head.  They are all about the same floor plan with similar views all built about the same time.  The only one that is going to sell is the one that is the best value or with the best sales price.  If you are the 12th best priced Evian out of 25, you have 0% chance of selling. 

The problem is, Evian Villas are coming on the market so people are “cutting in line” and getting in front of you and then people who are behind you in line are reducing their price and also moving ahead of you in line.  Keep in mind, being 3rd out of 25 is the same as being 25th – you have no chance of selling unless you are at the very front of the line.  Even if you reach the front of the line, someone from behind you reduces their price, gives a bonus, replaces their carpet, remodels their kitchen and you are back to being 2nd in line.  Remember, the only person that checks out if the first person in line.

I recently was on a listing appointment and when I explained the current state of the market to the seller and told her what her house was worth she spent the next 15 minutes telling me that her house had to be worth more than that because she had the best neighbors in the world. 

I tried to explain to her that a purchaser in not going to put any value on her relationship with her next door neighbors.  A purchaser might not care that your next door neighbor is a great bridge player because they might not even play bridge. 

I have asked all my sellers to “look through the eyes of a buyer”.  Ask yourself what the buyer looks for; they do not put as much value on certain things as you do because they do not mean as much to them. 

I have never known a person to buy a house because they were told they had good next door neighbors.  They usually buy a house because it is a good value, a good floor plan, been updated, is on a great lot, has a great view or has the right amount of square footage.  They never buy it for any other reason other than that.  It seems to me that most sellers attach all these different values to the house that are not in line with what people are looking for. 

I was once on a listing appointment and told a person what their property was worth and they started explaining to me that it was worth more than that because the guards at their plantation entrance were better than the guards at the other plantation entrance.  They thought their property was worth more because the guards were friendlier.  I tried to explain to them that this is not usually something that is a big selling point to most people.  They are more interested in value. 

I think it is important in today’s real estate market that any seller ask themselves if they were a buyer, what would I look for and how much would I pay for a certain property.  You have to realize that there are several listings of almost any type property available and any astute buyer is going to look at all options and make an offer on the one he feels is the best buy.

Sea Pines Plantation is probably one of the best known residential developments on the east coast.  Many people call this the “father of planned unit developments”.  Sea Pines is where Charles Fraser started the whole concept that has swept America of planned unit developments. 

Even though there are a lot of newer developments, there are none that have a more special ammenity package and location as Sea Pines Plantation. 

Sea Pines has 5 miles of private secluded beaches, most of all of which is set aside for single family homes.  If a developer was developing Sea Pines PLantation today, this would be 5 miles of luxury hotels or condominiums.  You have to think that back during the early 60s when Charles Fraser started Sea Pines there were not a lot of “luxury condiminium projects” around. 

One of the main benefits of Sea Pines Plantation is that every 500 feet there is beach access which allows people who are not oceanfront to have access to the beach.  Have you ever thought of the value of those 50 foot walkways if you added them all together and totaled them up at today’s oceanfront prices?  I think you can see why this is so special; Mr. Fraser had the foresight to plan ahead. 

Sea Pines is also special because of the beauty of Harbour Town and its ammenities. 

Sea Pines is approximately 6,000 acres with over 3,000 homes and 2,000 villas.  Over 90% of homesites are built on. 

The architectural style and the lush vegetation of Sea Pines give it that “special feeling”.

Now is a great time to purchase in Sea Pines.  At the present time there are 231 homes, 45 lots and 160 villas listed for sale.  Click here to view my best buys in Sea Pines homes, lots and villas. 

There are 12 homes and 5 villas presently under contract; we have no lots currently under contract. 

Why do you love Sea Pines Plantation?

In 1997 a client of mine asked me to stop by his house because he owned a lot in Sea Pines and he wanted me to tell him what the lot was worth.  I did my homework and told him the lot was worth about $400,000.  In 1998 he called me and said, “Jim, you are not going to believe what happened – someone called me up and wanted to buy my lot and he paid me $400,000 for it so I went ahead and sold it to him”.  I was upset and told him I could not believe he did that because the lot was now worth $500,000.  He was upset and said, “you told me it was worth $400,000″.  I told him that when I told him the lot was worth $400,000 was over a year ago, and now with what is going on in the market, prices have risen.  He then said that he should have called me and he felt so bad. 

I think this proves a point that real estate prices change from month to month based on what is going on in the market. 

I recently listed a house and I told the guy we would be able to get him around $450,000.  As you know with what is happening in the Hilton Head Island Real Estate market, prices have been dropping.  We finally got an offer for $440,000 and he kept saying, “but you said you could get me $450,000″.  I told him that was several months ago and the market has dropped a little bit and this is close enough.

I recently shared with someone that when you call your stock broker you ask them what your stock is worth today.  You don’t tell him that you talked to him a month ago and he said the stock was worth $50 so sell it at $50.  He might say it is worth $52 today or he might say it is worth $48 today because stock prices fluctuate.  Housing prices fluctuate, 2 X 4 prices fluctuate, gas prices fluctuate, bananas at the grocery store fluctuate.  All prices fluctuate based on a number of outside forces that affect any market at any given time.

I was at my farm this weekend and was talking to a good friend of mine Bud Bowers.  He is a farmer and works on some of the land near my farm.  I was asking him what he was planting this year and what the prices were.  He was quoting me that the prices of cotton, soy beans, corn and peanuts were much lower than they were last year.  Then he said something that made a lot of sense.  He said his father used to say that the biggest insect we have is prices.  The more I thought about what Mr. Bower Sr. said, it made a lot of sense.  In other words, they have all kinds of problems farming, but the biggest problem they have is the prices for the commodities that they get.  It kind of made me think about the real estate market. 

We have insects as well; government regulations, interest rates, loan values on mortgages, insurance; but the biggest problem we are facing right now is that prices have been dropping.  Any farmer knows that if it costs you $400/acre to plant corn and you only make $300 on the corn, you have lost money.  That is what we are facing today.  People who bought property in 2004 and 2005 cannot sell their property for what they bought it for so even though the insurance might be high, taxes might be high, utilities might be high, the main problem is pricing.  I think that is true not only in farming, but also in Real Estate.  I bet Mr. Corin Bowers, Sr. would have made a great real estate agent because he understood the concept of pricing.

I have been watching the news recently concerning the stimulus package.  I really do not understand what Washington is up to.  I have not figured out exactly what giving $50 million to the National Endowment of the Arts or $150 million to stop teenage pregnancy in Somalia has to do with stimulating the economy.

If our Government was as serious about stimulating the economy, it would be very easy – you would help housing first.  Housing is what got us into this problem and housing is what is going to get us out of this problem. 

There are a couple of pretty simple things that Congress could do.  First, they could subsidize mortgage rates to an all time low which would motivate people to purchase homes.  They could also give a tax credit to anyone who purchases a primary home.  They could give a tax cut to everyone – that goes a lot further than the pork that I have seen in this bill.

I do not mean to by political in this blog, I’m just stating the facts.  The fact is, housing needs help probably more than the National Endowment for Arts needs help.  Even though preventing teenage pregnancy in Somalia is a very noble thing, I do not know if we are going to be able to accomplish that.  It seems to me that the money goes into the hands of the local leaders and never gets to the root of the problem.

Please call your Congressman or Senator and tell them the way to solve the National Crisis is to solve the housing problem.