Several Hilton Head Island Realtors said a 5 percent decline in the average selling price of homes was a key contributor to last year's spike in local sales, but the drop probably won't continue long into 2012.
The area's 9.4 percent increase in total sales in 2011 lead the state. It was more than 11 percentage points higher than a statewide decline of 1.7 percent.
But the average price of a Hilton Head area home dropped 5.3 percent, to $324,793. It was the steepest decline of any of the state's 15 regions, according to an annual S.C. Realtors report issued last week.
"People don't have to buy on Hilton Head; they have to want to buy," said Realtor Andy Twisdale. "And they aren't buying the higher-priced homes like they were before."
Twisdale said that as long as total sales continue to rise, the average selling price should increase.
"Real estate is all about supply and demand," he said. "It's very positive that there's more demand, and as more buying takes place, the prices will rebound."
Maria Skrip, broker-in-charge at RE/MAX Island Realty on Hilton Head, attributed the price decline to foreclosures and short sales that she said have flooded the market.
"We've got to get the short sales and foreclosures off the market before that average (selling price) can go up," she said. "But there are fewer of them out there now than in the past."
Charles Sampson, a Realtor at Charter 1, said the report might suggest an artificially steep decline in prices for homes on Hilton Head, because the island itself wasn't as affected by short sales and foreclosures as the rest of southern Beaufort County.
John Robinson, president of the Hilton Head Realtors Association, said the average selling price would rise as the area's total inventory continued to drop.
"There was 10.8 months of inventory in December, down from 14.8 months the year before," he said. "We're moving in the right direction."
Follow reporter Grant Martin at Twitter.com/LowCoBiz.
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Annual real estate report: Hilton Head area tops rest of state, Jan. 25, 2012 [6]