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.

My wife and I were in Lexington, Virginia visiting our daughter recently.  We went for a walk to get some coffee and passed by a beautiful home.  It happened to be for sale and we picked up a flyer out of the box out front - it was listed for $1.5 million.  I automatically thought that this house was not worth $1.5 million, especially when the house down the street that was similar was priced at $500,000. 

My wife looked at me and said that there was no way I could know that this house was worth because I was not a Realtor in this area.  Real estate works the same in all areas – there is a pecking order for properties.  You don’t have a lot of buyers in Lexington, Virginia looking for a $1.5 million dollar property on 6.5 acres.

I once went on a listing appointment and the seller told me that they wanted $10 million for their oceanfront home.  I knew there was no way she could get that when her next door neighbor’s home was on the market for $5 million.  She said her house was slightly larger – which it was, and her home had 5 bedrooms rather than 4 bedrooms – which it did, and that the pool was larger – which it was.  These factors; however, did not mean that the house was worth twice as much. 

It sometimes amazes me the price someone will put on a property.

When someone is trying to determine the value of their home, I think it is important to look at the competition.  I often tell people that the price of their house is not determined by me, but that it is determined by the market and the buyers in the market.

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.

Many changes have occurred in the real estate market. 

Every day, I see real estate agents who talk a good game, but can’t perform. 

I had a good client of mine who decided to list their house with another agent.  This agent had a great listing presentation and she was a member of a national real estate group of 5,000 agents; however, she herself had never made a sale. 

She convinced my clients that they would benefit from listing with her because she had agents all over the country working to sell their house every single day.  It seems to me that most properties on Hilton Head Island are sold by agents on Hilton Head Island.  For instance, I have never heard of an agent in Des Moines, Iowa waking up every day with the goal of selling a house on Hilton Head Island, just as I do not wake up every day with the though of how I am going to sell a property in Des Moines, Iowa.

I always appreciate the referrals I receive from clients because with over 1,400 members in the Hilton Head Island MLS; I know that buyers and sellers have a choice.

In the end, make sure you choose an agent who can back up their game and can get results for you.

Jane bought some new spring flowers and we decided to work in the yard yesterday afternoon.  In order to plant our new flowers, we needed to trim back some branches. 

I have three chainsaws and several pair of clippers at the farm, but realized that I did not have the proper equipment at the house.  We finally found one small handsaw; I then spent several hours trimming the branches.  I kept thinking how much I wished I had my clippers or chainsaw – the proper equipment. 

The same is true in real estate.  When a buyer or sellers wants to buy or sell real estate, they need a Realtor with the proper equipment which can include knowledge and contacts.

A year ago I had a house listed in Sea Pines Plantation.  We ended up selling the house very soon after listing it because I had a contact that I knew would love the house.  The seller had listed their home with someone else first and it did not sell because they did not specialize in that market.  

It pays to have the right equipment and it pays to have the right real estate agent.