Real Estate - The Cost of Waiting

Each year, over 2.5 million visitors cross the bridge to Hilton Head Island for a vacation. Many return year-after-year, and many decide to stay. If you are one of those people who can envision a life here, it's time to claim your piece of paradise.

According to Bill Baldwin, Dunes Marketing Group's director of sales and marketing, many purchasers have been sitting on the fence, waiting for home prices to hit bottom. While he acknowledges that prices may still have some room to fall, he says waiting may not be the best financial decision. Here's why.

The cost of a house is made up of the price and the interest rates the buyer will be paying, Baldwin explained. Recent reports from Freddie Mac indicate that 30-year fixed mortgage rates are likely to continue to rise, meaning that purchasers waiting on the sidelines are going to be paying more in the future.

"Even if prices fall another 10 percent this year, the cost of a home will increase if interest rates go up more than 1 percent," Baldwin said. "Buyers should not worry where prices are going. They should be concerned where costs will be later in the year."

Here's what that means:

Price is same, but cost is higher

      Date                          Loan Amount             Interest Rate         Monthly Payment

 

      Today                        $340,000                     5.05                          $1,835.60

      Nov., 2010                $340,000                    4.17                          $1,656.72

      Difference in mortgage payments                                                 $178.88

 

The truth about real estate

According to Baldwin, scary headlines about the housing market are likely to prevail in the coming months, but they will not accurately portray what is happening in real estate. "While it is impossible to ignore the media blitz, shine a bright light in that corner and you will see that the monster is not so dangerous after all," he said.

One of the biggest misconceptions in today's housing market is that homes are not selling. That simply is not true, Baldwin said. According to the National Association of Realtors (NAR), homes are selling nationally at an annual rate of 5.10 million-that's an average of 13,973 every day.

The monthly pending sales report, which measures the number of houses going into contract each month, has increased in six of the last nine months. Since last June, pending home sales have posted an overall gain of 24 percent, demonstrating that the market is recovering on its own. "The index means modest near-term gains in existing home sales are likely," said Lawrence Yun, NAR's chief economist.

Hilton Head Island community sales are up slightly in 2011 from 2010 and prices are down about 10 percent, Baldwin said.

Who says it's time to buy?

Baldwin is not the only one who believes the timing is right for buyers. Billionaire hedge fund operator and investment genius John Paulson, who made a killing betting against housing a few years ago, is now bullish on the residential real estate market. "If you don't own a home, buy one. If you own one home, buy another one. If you own two homes, buy a third. And lend your relatives the money to buy a home," Paulson said.

America's most famous real estate guru agrees. "I'm pretty sure this is a great time to go out and buy a house," said Donald Trump. "And if you do, in 10 years, you're going to look back and say ‘You know, I'm glad I listened to Donald Trump.'"

Added value

But future financial gain is not the sole motivator for buying now. "What we have to offer is a way of life-rare, highly sought-after and ultimately in short supply. Every day you wait is a missed opportunity to enjoy what we have here," Baldwin said, citing the natural beauty, subtropical climate, fabulous amenities and wealth of conveniences.

Often billed as the nation's first environmentally sensitive, "eco-planned" resort, in spite of its steady growth, Hilton Head remains a haven for nature lovers. Dominated by magnificent moss-draped oaks and leafy palmettos, there is a sense of serenity here like no other resort community in the world.

"Sure, we have a Wal-Mart here now. And that's a good thing. But you go there and you park under a canopy of ancient oak trees. That's pretty cool," said Baldwin, a Hilton Head resident for over 30 years. "It's really no surprise that Fox News recently named Hilton Head Island the "Number One Beach Community in the U.S." and that Palmetto Dunes was named "Number one Family Vacation Spot" by Travel + Leisure magazine.

Whether you're looking for a vacation home, part-time residence or a place to retire, now is the time to secure your place in the sun. What are you waiting for?

 

By: Linda S. Hopkins

Dunes Marketing Group, founded in 1979, is one of the oldest and most respected real estate companies on Hilton Head Island. Let us help you find the property of your dreams. Call (800) 258-5202 or (843) 842-111 or visit dunesmarketing.com for more information.