Each day this week I’m going to share with you one of my recent “insight” videos on the Hilton Head Island real estate market.

Today’s video focuses on what we call “the 6-month line” and how real estate inventory affects pricing in the market.

ENJOY and stay tuned for another video tomorrow!

I can’t tell you how many times I’ve been asked what the biggest mistake that sellers make.

In my opinion, the #1 issue sellers have is overpricing their listing to start with.  Historical data shows that properties have the best chance of selling in the first 30 days.  Often times, sellers overprice their property in the beginning with the mentality that they will “try and see if the right buyer comes along” and then they end up “chasing the market” down - reducing a step behind the market.

So weigh out your options before listing your property and don’t fall victim to the mistake many sellers make.

This past weekend I was in New York City visiting two  of my grown children.  On Saturday night, Jane and I went out with some friends to dinner.  We all jumped in a cab and our friends told the driver the address of the restaurant.

They had also mapped out the directions so they tried to tell the cab driver which way to drive.  It got interesting because the cab driver disagreed with the directions and of course, both parties thought they were correct.

To be compliant, the cab driver started to follow our directions until we came to a dead stop in traffic.  At that point, the cab driver turned around and told us that we should have listened to him because he does this all day, every day and knew that there would be bad traffic at that particular time of day.

This reminded me a lot of the real estate market.  Every day you will encounter people who think they have an idea of what their property should sell for or how their property should be marketed to sell.

Sometimes you need to trust the market expert and their local knowledge – they can get you where you want to go.

Yesterday I got a call from a client interested in selling his house and he was asking about the market.  After we talked for a few minutes he said that any time you have too much of anything it affects pricing.  I’m really surprised more people don’t understand this concept.

It’s true in any commodity – corn, soy beans, gas – inventory affects pricing.  My client fully understood this concept even though he didn’t put it in these exact words.

I recently went on a listing appointment on Hilton Head.  While I was going over what was going on in the market I was stopped mid sentence.  The owner said that these market conditions didn’t apply to them because they had a unique home – despite the fact that most homes prices have fallen a significant amount since 2005.

This particular owner said that his home was worth what he paid for the home in 2005 because it had such a good floor plan and view.  I once even had an oceanfront homeowner tell me his house was worth what he paid four years prior because he had a nice swimming pool. 

It’s important to remember – the rising tide lifts all boats – the same applies in reverse.

A Realtor friend of mine from Maryland and I were talking about how much advertising, promotion and work would have to be done to sell a house for 20% more than the market value in today’s real estate market. 

She said you can’t do it – she said she could fly a banner all over DC with the address of the home, but if the owner has it priced 20% above market value it is not going to sell. 

In a busy market you might be able to accomplish this, but it is completely different in a slow market when there is an overabundance of inventory.  People tend to compare everything and they take their time making a decision. 

So it’s important to remember that no matter how great your Realtor is, you have to be realistic in the market to get your property sold.

I recently had someone call to tell me that they are looking for a villa close to the beach, priced under $300,000 that would be a positive cash flow and rent well.  Unfortunately, something like this doesn’t exist – if it did everyone would own a villa on Hilton Head Island. 

Because of the uniqueness of this resort area, there is really no way the market would get to that point. 

It’s important to realize that the market is bad, but it’s not that bad and as a buyer you must be realistic to the current market conditions.

Yesterday morning I received several emails and phone calls concerning an article in The Wall Street Journal mentioning 2nd home sales in several areas – including Hilton Head Island. 

Check out the article featuring Hilton Head Island here!

I think the article is right on and that now is a great time to buy a 2nd home – prices are right and the selection is good – what more could you ask for???  Check out my featured listings which include some of the best real estate opportunities on Hilton Head Island. 

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?