We can tell you that in the last six months real estate sales are up significantly across the Low Country. This increase has been sustained and month over month is holding its own momentum. The good news stretches across all segments of our market, including homes, lots and villas (condominiums).

As you have become accustomed to our company letters and the Broadhursts detailed data, you know that we are very focused on statistical data and less concerned about subjective or personal feelings about market conditions. Typically, the basis of our newsletters starts with a search of our MLS records, which is then weighed against other sectors of the economy and national trends.

Since September 1st, real estate sales in our area are up 52% over the same 6-month period one year ago and up 14% over the same time frame from 2007 to 2008. The number of sales is down just 10% since September to March 2006/2007 when most people failed to recognize deteriorating conditions and values were actually still increasing.

The number of units sold (1,370) is still off by 40% when compared to the red-hot market of 2005/2006. By comparison, the more stable and healthy market of 2003/2004 saw 1,958 sales, which is 42% more than the current six-month period but 14% off of the highs set in 2005/2006.

In breaking down the sales figures between houses, lots and villas, home sales increased 36% over a year ago, villa sales increased 85% and lot sales increased by 107%.

Unfortunately, the number of sales has not translated into improved values and that should not be expected in the foreseeable future. There are still plenty of short sales available and, while it has slowed, well-priced foreclosures are still coming to the market.
Values in the housing and villa market are showing signs of stabilization, but the lot market has a long way to go.

Lots in the golf course communities were particularly hard hit by foreclosed homes and prices in Belfair, Colleton River and Berkeley Hall have fallen precipitously. There is ample lot inventory in those communities under $20,000.

It seems apparent that there is some pent up demand and purchasers now are feeling comfortable with current opportunities. The fact that 30-year fixed rates for conforming financing are hovering in the 5% range, coupled with the improvement in loan programs for jumbo loans, is undoubtedly making it hard for purchasers to remain on the sidelines.

Reports from other resources seem to reflect the activity in our market. In its final quarterly report for 2009 the Federal Reserves Beige Book revealed that nine of 12 districts showed improvement in consumer spending and increase housing activity. The report reads, “Toward the end of 2009, home sales increased in most Districts, especially for lower-priced homes. Home prices appeared to have changed little since the last Beige Book, and residential construction remained at low levels in most Districts.”

The National Association of Realtors reports that the cruel weather conditions over the winter have affected home sales, but still things have improved over last year. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5.

One of the other positive market indications is that inventory levels continue to shrink. While the balance of sales to available properties is still way of whack the number of properties coming to the market is falling. In the first 70 days of 2010 a total of 863 homes were listed for sale in our MLS, compared to 988 in 2009 (12.7% decline) and 1,184 in 2008 (16.6% decline). Comparatively, there are 2,258 homes for sale in our MLS while 501 have pended or sold since the beginning of the year.

A relatively healthy market should reflect equal the number of sales to the number of new listings, so we are still far from a healthy market, but incremental improvements in sales will eventually balance the supply and demand. It is at that time we can look for renewed appreciation.

We think that this data points to a stabilization of prices and an increase in demand. The demand is not great enough to start a run-up in prices, but it should provide evidence to potential purchasers that their competition is returning to the market.

Each week one or two great properties come to our market. They are usually foreclosures, but sometimes price adjustments on existing listings. We keep a vigilant watch on the inventory, so if you or someone you know is looking to buy please let us help you make the right decision.

Hi Mark,

I wanted to share with you some interesting stats and also let you know that I am taking my wife, Brady and my mother in law to Florida in the morning for a week. I will of course have the laptop, my pda and my phone, not to mention constantly calling the office everyday and bugging them (That is what I do, I don’t have any hobbies) …….so I hope me leaving means more activity or an offer. Usually you leave and you get busy! You can always reach me or Kelly at the office (843) 341-5660. By the way we can’t wait to go to the Ritz in Sarasota it will be awesome!

Talk to you soon!

Rick (=



Some interesting statistics: Seems activity is moving finally!


January Home Sales

2009 – On Island 16; All of MLS 67

2010 – On Island 41; All of MLS 110


Final Quarter Home Sales

2008 – On Island 101; All of MLS 339

2009 – On Island 168; All of MLS 480


January Villa Sales

2009 – On Island 19; All of MLS 20

2010 – On Island 47; All of MLS 53


Final Quarter Villa Sales

2008 – On Island 89; All of MLS 96

2009 – On Island 160; All of MLS 173

January Lot Sales

2009 – On Island 0; All of MLS 8

2010 – On Island 6; All of MLS 16



Final Quarter Lot Sales

2008 – On Island 11; All of MLS 39

2009 – On Island 18; All of MLS 85

The last quarter of 2009 was by far the best quarter of 2009.

Great insight from Matt Topping a local lender with Wells Fargo on what borrowers need when getting a loan..........things are constantly changing, take a look.

Salaried Borrowers:

Most recent W2, most recent paystub, most recent 30 day history on bank/brokerage, retirement accounts (all pages of the statements), copy of driver's license, copy of current mortgage statement, insurance, and tax bill on all properties owned.

Self Employed Borrowers:

Most recent 2 year's personal and business tax returns (just federal, all pages, schedules, K-1's), year to date Profit and Loss statement, all other requirements same as Salaried Borrowers.

Retired Borrowers:

Most recent 2 year's personal tax returns, most recent pension and social security award letters or 1099's, same requirements on other items as above

Miscellaneous

If your buyer is using rental income to qualify, we'll need the most recent 2 year's personal tax returns, as well as copies of the current leases.

If someone has less than 25% ownership in a business, we'll only need the last 2 year's K-1's...if the ownership is 25% or more, we'll need the k-1's and the full tax returns

Jumbo loans will require 60 day's worth of assets statements, as opposed to 30 days

If your buyer is divorced, we'll need the divorce decree...if they're using alimony/child support for income, we'll need 3 month's evidence it's been received, and that it will continue for at least 3 years.

If a property is being sold furnished, please write into the contract that the "furniture is being conveyed as a convenience and has no value".


There are, of course, other things that may pop up that require further documentation (large deposits on a brokerage or bank statements, inquiries on credit reports, etc.), but I wanted to at least give you an idea of what banks are looking for in the current lending environment. This is especially important if you've got buyers coming to town looking to put an offer in on a bank-owned property that requires a pre-approval.

Sold Homes on Island through November 2009:

Sea Pines Plantation 108
Forest Beach 16
Shipyard 7
Wexford 13
Long Cove 8
Palmetto Dunes 40
Port Royal 28
Hilton Head Plantation 144
Palmetto Hall 13
Indigo Run 29
Spanish Wells 4
Windmill Harbour 11
Off Plantation 58


Sold Homes in Bluffton through November 2009

Moss Creek Plantation 27
Colleton River 16
Belfair Plantation 12
Rose Hill Plantation 28
Sun City 203
Bluffton 417

This month I want to address a real estate problem that is not only popping up here in the Low Country, but all over the nation. It is no small matter and whether you are a purchaser or a seller, this issue may have a significant impact on your real estate transaction.

This issue is appraisals. More and more it seems this very sensitive link in the real estate sales process is becoming a prevalent stumbling block in trying to successfully consummate transactions.

Historically, if a purchaser was obtaining financing to purchase a home their lender would select an appraiser from a list of experienced and qualified licensed contractors. The list of acceptable appraisers was established by each lender and in order for an appraiser to be eligible to provide services they had to be approved by each lending institution.

Unfortunately chummy relationships between some lenders and appraisers have been identified as part of the problem that contributed to the real estate woes of the last several years. Keep in mind a huge problem that contributed to the savings and loan debacle of the late 1980’s was laid at the doorstep of fraudulent appraisal practices and nearly every refinance boom over the past 30 years has seen some abuse.

So, in an attempt to stem problems arising from this part of the real estate process, the Federal Housing Financing Agency (FHFA) came up with the idea that implementing what amounts to a blind lottery system for assigning appraisers would quell a good portion of the potential abuse.

Before I go any further, let me make it infinitely clear that appraisal abuse was not the cause of the collapse of the real estate market! If not for the introduction of sub-prime loans into an otherwise highly reliable mortgage-backed-securities market AND federal- government-induced pressure to widen the pool of borrowers qualified for conforming financing, our current real estate mess would be a mere shadow of today’s problems.

While ridding the system of potential abuse is noble and worthy, the current appraisal lottery system is fraught with problems. Two of the major issues are 1) appraisals are being performed by contractors who may not have any previous experience or knowledge of the specific housing market in which they are rendering an opinion and 2) lenders are now at the mercy of appraisal work being performed by unknown contractors who may or may not be competent.

Keep in mind that up until just recently property values here, and around the country, have been falling precipitously over the past two years and as such the lending industry is hyper-cautious when it comes to property valuations. Since most real estate contracts incorporate a financing contingency, many non-cash contracts are in limbo while the appraisal process is conducted. If the appraisal is lower than the contract price many banks will not lend the originally applied-for loan amount. In plain English, the purchaser has to come up with more cash (not likely), the seller has to lower the price of the agreed-to contract or the house has to go back on the market.

This practice of assigning appraisers is not a matter of legislation, but an agreement entered into by Fannie Mae and Freddie Mac with the government’s FHFA as part of something called the Home Valuation Code of Conduct. The conduct has been adopted by lenders across the nation and as a result the institutional response to this has been employment of a third-party Appraisal Management Company (AMC) to select the appraiser.

An AMC is a middleman. It receives an appraisal request from a lender and then it assigns an appraiser from its list of approved appraisers who have agreed to take assignments. From the lender’s perspective this lottery system alleviates them from any potential accusations of impropriety.

National Association of Realtors Director Bob Hunt writes, “The primary complaint about AMC appraiser selection processes is that too often appraisers are given assignments that take them out of their geographical area of familiarity and expertise. Let's face it, an appraiser, just like a real estate agent, can at best be very knowledgeable about only an extremely limited number of neighborhoods or areas. Each may be licensed by their state agencies to work anywhere in the state, but none are likely to have the ability to do so with expertise.

“The following scenario has become commonplace since AMCs have become the selectors of appraisers: the appraiser does not live in the area of the subject property; he or she may have never had an assignment in the particular neighborhood or even the city; the appraiser is not a member of the local or regional MLS and does not have access to relevant comparable information (which, of course, is not simply geographically determined).

Moreover, unlike earlier days, it is turning out to be much more difficult for an agent (the one who is likely to know the neighborhood and relevant comparables) to provide helpful information to the appraiser. (While) the HVCC does not prohibit real estate agents and appraisers from talking to each other, everyone is so uptight about the new regulations they have been interpreted to mean that no one can have a substantive discussion with the appraiser.”

Another inherent flaw of this middle-man approach is that AMCs do not employ nearly the same scrutiny that banks previously employed. As we all know, no matter what service you encounter there are competent and incompetent professionals in every field. The old appraisal system perpetuated an environment whereby the cream rose to the top, but the current AMC system offers no such incentive.

Here is the requirement an appraiser must meet in order to be included by a third-party AMC according to a Fannie Mae bulletin published in July, 2009: “The code requires that an appraiser must be licensed or certified by the state in which the property to be appraised is located.” It’s that simple.

Folks, this is a serious problem. How many of us would want to walk into a hospital for heart surgery and not know whether the physician has done the procedure a thousand times or if this is his/her first rodeo?

This is not an overstatement. One of my fellow Realtors is working on a transaction in which a foreclosed home is being under-appraised by $25,000 on a $485,000 contract price. Think about it - a foreclosed home that the bank-owner has already had a separate appraisal done is now looking at an appraisal that contends the property is worth 5 percent less!

In another example, a relative of mine was just transferred from Washington, D.C. to the southwest. They had a full-price offer on their home, but went with another contract that was $15,000 less because the prospective purchaser appeared to be better qualified. The appraisal came in $20,000 under contract price.

Having been a mortgage banker for nearly 20 years, they asked me to look at the appraisal. Suffice to say it was shoddy at best and even though an appeal of the appraisal lead to an increase in valuation the lender making the loan would not budge from the original appraised value. They had no choice but to move forward with the closing because of market and financial conditions.
Let all of this just be a caution to you that if you are selling or getting ready to purchase, no matter how eager and willing you are to make a transaction work there are other forces outside your control – and your Realtor’s control – that may impact a successful closing.