I was recently at a real estate conference and one of the Realtors was talking about their listing process.  He said one of the questions he often asks sellers is whether they want to list to sit or list to sell.  In today’s market, this is a very smart question. 

I often think of the real estate market like the stock market – there is a price to buy and a price to sell.

Would you call a stock broker and tell them that you would like to sell stock ABC for $50 per share when the price is actually $42 per share?  The advantage to the stock market is that the value is printed for you.  In the real estate market we can’t always give you an exact price that your property will sell for, but we can usually tell you what it won’t sell for. 

It is important to realize that sellers and real estate agents do not determine the price; especially in this market.  It is all based on the current real estate market. 

So when you list your property, do you want to list to sit, or list to sell?

Nobody is happy.

That’s right, in this real estate market, nobody is happy – not even the buyers. 

I did not realize this until I was talking to a Realtor friend of mine from Chicago today.  We, as Realtors, think that purchasers are happy and excited because they are getting some phenomenal deals in this market.  But in reality, buyers are still nervous about their purchases as prices continue to fall – they want to know if their new home is going to retain its value.

We all want this real estate market to turn around, so we can all be happy!

Here is a brief recap of what happened in the Hilton Head Island real estate market during the month of June. 

We had 47 homes sell on Hilton Head during the month of June; compared to 124 home sales during the same time period in 2005 – which was the top of the market. 

We had 65 villa sales during the month of June on Hilton Head; compared to 204 villa sales during the same time period in 2005. 

We had 23 lot sales in Hilton Head and Bluffton in June compared to 102 sales in 2005.

I’ve been telling my clients, home sales are slow, villa sales are slower, and lot sales are slowest. 

I do feel good about the fact that we had more villas and lots sell during this time period than in 2009 during the month of June. 

Prices continue to drop – bad news for sellers and good news for buyers.

There was an article in the local Island Packet today that discussed home prices rising over the last several months (based on a survey of 20 cities).

I was talking to a client of mine and they said they did not know who to believe; one day the newspaper says that things are getting better and the next day the same paper says that things are getting worse. 

I think it is important to remember that all real estate is local and you should not look at national studies to determine where your local market is. 

I can pretty much guarantee that Hilton Head Island was not included in this 20 city report. 

The real estate market on Hilton Head Island, as in most resort areas, has been slow as inventory increases and sales decrease causing a lowering of prices. 

Just remember, do not look at the national trend – look at the local trend.

One of the Realtors in my office recently had a listing appointment.  During this meeting, they went over all the research showing what the house would sell for in today’s market. 

A couple days later the owners of the property sent a letter to their Realtor saying why they thought their house was worth approximately 15% more than what the research showed.

I read the letter and it was very well written, but they needed to understand that they don’t determine the price of their home.  In a real estate market like today’s, it is important to realize that it is the buyer who determines the sales price.  In a seller’s market, the seller often determines the sales price. 

In a good real estate market the seller determines the price because there are a lot more buyers than sellers in the market.  This makes sense when you think about it like that and it is true with any commodity.  It all goes back to Economics 101 – supply vs. demand.

I recently had a meeting with a client about a property and they had a lot of questions.  I knew everything about the house – who the previous owner was, how many square feet were in the house, when it was built, what it previously sold for, when it sold, etc.  My client stopped to asked me how I knew all of these random facts. 

When you love selling real estate as much as I do and you have sold real estate for over 30 years, you tend to lots about it.

I started asking my client questions about sports and he knew all of the answers.  I asked him how he knew all the answers to my questions and he said that it was because it was something that he was interested in and sports were important to him. 

When you choose a Realtor, I believe you should choose someone who loves real estate and it is important to them.  I believe you pay for good advice, but you pay even more for bad advice. 

There are a lot of people who like to get a real estate license and “dabble” in real estate.  Make sure you have someone working on your side who knows the real estate market.

There have been some new discussion with mortgages and regimes.

There is a law that says that  if a certain number of people are behind in their regime payments within a certain condo complex, lenders are not allowed to lend in these developments.  This is really making it hard to sell some condos because they need cash buyers.

I was talking to a fellow Realtor in Chicago and she was telling me about this particular issue that was complicating one of her sales; financing would not go through on a purchase because there were too many people behind on their regime payments. 

She ended up going to the complex and found out that there were only two people too many behind on their payments; she paid their fines to bring them up to date which allowed the financing and the sale to go through. 

I’m hoping that we will not see this problem in Hilton Head, but this is already a problem in one particular complex.  This has been driven by many people going into foreclosure; when they can’t pay their mortgage they often stop paying regime fees and insurance. 

I’ll keep you posted on this – it is something that is new and we don’t know all the details, but it is definitely concerning to all of us.

There has recently been a lot of talk about shadow inventory and exactly what it is. 

Shadow inventory is the number of people who would consider selling their property, but do not currently have their property on the real estate market. 

Let’s assume that someone has their home listed on the market for $500,000 and they really need to be priced at $450,000.  Sometimes they will take their property off the market and will tell us that if we happen to run into a client who is looking for a property like theirs at $500,000 to let them know – people also sometimes refer to these as “pocket listings”. 

This will often slow down any recovery of a real estate market because if there is any good news increasing activity, this “shadow inventory” will increase the number of listings.

Supply and demand has an effect on prices and we are currently running with a 2-year inventory.  Anything over a 6-month inventory often has a negative effect on prices.

People always ask me when we are going to be in a normal market – I can’t wait until we get to that point.

We were having dinner at one of the top restaurants in Napa Valley several nights ago.  I couldn’t help but overhear the couple next to me talking to their server.

They themselves were owners of a restaurant and they were asking about the owner of this particular restaurant.  The server told them that the owner was very hands on and was in almost every day overseeing everyday tasks. 

When the server walked away, she said she could totally understand why this restaurant was so successful.  The owner definitely pays attention to details – he knows everything that everyone who works there is doing. 

I see so many Realtors who try to be efficient with their listings, but are often absentee.  They often hope to put a listing in the Hilton Head MLS and cross their fingers that someone else sells it. 

We try to give the best service possible when it comes to Hilton Head Island Real Estate - working hard from the time we get the listing until the time it sells.