Hampton Lake Files Chapter 11 - A Case for Debt Free Communities
After our stop in Savannah, our travels took us north to the Low Country in South Carolina. The Highway 278 east west corridor road expansion is still underway. When this is complete, traveling east to Hilton Head Island or west to Interstate 95 will be a breeze. New low priced Bluffton real estate developments can easily be found on the south side of Highway 278.
We’re not surprised to hear about the Chapter 11 bankruptcy filing of Hampton Lake considered a benchmark community in the industry, not because of fiscal mismanagement but because we see mixed indicators still in the market. Hampton Lake states the reason is because of two demanding investors. While some real estate developments have a record breaking number of homes under construction, others are still struggling to make sales. Lack of adequate sales equals cashflow shortfalls.
In our opinion, the higher end home markets (those over $500k) and the lower end home markets (those under $200k) are fairing the best. By our calculations, the average home price at Hampton Lake is in the low $300k’s, the most competitive part of the market. We believe it’s the high monthly fees in resort-style communities that may be scaring buyers away. Although Hampton Lake’s HOA fees are approximately $250 a month, many of the Hampton Lake neighborhoods have additional fees to maintain the common areas making it more expensive to live there. Hampton Lake is still a great alternative to Bluffton golf communities with even higher mandatory club dues.
Hampton Lake began development in 2006, just before the Great Real Estate Recession. This 900 acre private lake community’s infrastructure is complete and approximately 200 homes have been built of the 1,000 planned at this coastal South Carolina community. We’ve stayed on property and had the chance to enjoy the boatable lakes, fitness center, resort-style swimming pool and restaurant at this Bluffton real estate development. In 2009, the National Home Builders Association honored Hampton Lake as Best Community in America with their coveted BALA award.
Hampton Lake’s filing of Chapter 11 bankruptcy on April 29, 2013 may hurt future sales as skeptical buyers have plenty of alternative choices. We’ve seen many high quality real estate developments fall into court appointed receivership for whatever reason and come out smelling like a rose, from a property owner's point of view. We don’t expect this Chapter 11 bankruptcy filing to be the demise of Hampton Lake. Chapter 11 bankruptcy offers federal protection of assets. This restructure of debt does create a golden opportunity for hedge funds and private investment groups who have already been scoffing up trophy properties all across the southeast. Hopefully this is the last industry leader to take the fall, a coastal South Carolina community commenced during the Great Real Estate Recession.
If you’re searching for Bluffton real estate, we suggest until the dust settles down, seek legal and real estate counsel from experts in the area. Consider debt free communities like Colleton River Plantation, Belfair, Berkeley Hall or Hilton Head Lakes which is most similar to Hampton Lake. By the way, last week, debt free Hilton Head Lakes celebrated the grand opening of its newest amenity, a 14,000 square foot Lake Club and zero-entry lakeside swimming pool. This debt free gated community already has an 18 hole championship golf course designed by Tom Fazio.
If you’d like to be introduced to our trusted colleagues in the Bluffton area who can share more debt free coastal South Carolina communities with you, write info@communityfinder.com or call us toll free at 866.384.1799.
