It’s a question that has been on everyone’s mind, especially those thinking of buying or selling property in and around Hilton Head: What did Hurricane Matthew do to the real estate market?
The momentum of our real estate market has been extremely positive over the last several years, with home sales in the first nine months of 2016 coming in at more than 20% over the pre-recession peak. As well, median prices, sale-to-list ratios and median days on market (DOM) continued to improve significantly during this time*. In fact, the number of homes sold market-wide through September of this year was at an all-time high. Then, Matthew struck.
It was the first time in a long time that the Lowcountry experienced the strength of nature at this magnitude. While Matthew approached our coast as a Category 2 Hurricane, reduced from the Category 3 to 4 that was anticipated, it still did significant damage. Trees tumbled to the ground, properties flooded, windows and roofs were struck with branches, and infrastructure was damaged. It was exactly what one would expect in such a storm.
But what of the after-effects? Did they, too, mirror expectations?
In the immediate wake of Matthew, no one can say that true damage was not done. The good news? The market seems to have come out largely unscathed. After all, we cannot forget that there is no such thing as a risk-free zone when discussing coastal property. Even in a location such as ours, where we do enjoy some level of geographic protection, Hurricane Matthew proved that storm damage can — and does — still happen, however rarely.
The point is: It wasn’t a complete surprise, and those who buy and sell coastal property realize that. It’s already factored into their decision-making. As such, the driving factors of our local market remain stable.
Current interest rates continue to allow buyers to get more for their money, and while we have recently seen a small increase, the cost of borrowing remains historically low. This is good news for both buyers and sellers, and allows for increasing strength of our still-growing market.
Baby Boomers and Millennials alike continue to flock to the Lowcountry, and for good reason. Hilton Head and Bluffton remain extremely desirable destinations, whether temporary or permanent. There is only so much coastal land available, and that will always be an enormous boon to local property values.
International buyers, too, realize this. According to the National Association of REALTORS® Profile of International Activity in US Real Estate, Florida — our immediate southern neighbor — accounted for a staggering 22% of total residential foreign-buyer purchases in 2016.
American real estate continues to be an excellent investment, and I anticipate many of our international buyers will continue turning their sights to the Lowcountry as the relative value of our property continues to grow, especially when compared to other destination markets. United States home prices have already appreciated above the Pre-Recession peak, overall. However, while home prices in our local market are up nearly 7% this year, they remain more than 25% away from that same peak*. This makes our area a prime target for investment, whether the asset is to be a primary, secondary or investment property — and Matthew doesn’t change that.
For more information on the Lowcountry real estate market, to receive a copy of “The Matthew Effect” (published by Engel & Völkers Hilton Head Island Bluffton) or for questions and comments, contact Daniella at
Daniella.Squicquero[at]evusa.com, visit DaniellaSquicquero.evusa.com, or follow Daniella on social media @lalasquicquero.