Another month has passed and it is time to reconnect with the Myrtle Beach real estate market. Like any other investment, it is always good to review them on a monthly basis in order to be informed of any changes that may impact you. The month of April proved to be another active month for sales which has been the common thread for the past few years. Spring is always the beginning of the listing and selling season.
I want to share something that I have observed over the past 90 days. This observation is more about consumer mentality versus predictions of the market.
I have observed a shift in the mindset of property owners in Myrtle Beach. I have noticed that most owners have come to terms with the new real estate market. Meaning, they are past the anger stage of the busted market and are now looking at their investments from a more non-emotional perspective. Property owners are now looking at the financials of their investments and if it makes sense to own then they hold, and if doesn't then they sell. Of course, this may seem logical and obvious yet we have to understand that logic was missing for the last few years and that was one of the contributing factors to the down market. Mortgage Companies, Wall Street, Builders, Developers, Realtors, Appraisors, Buyers, Sellers and many others were making decisions without using logic. If one does not use logic then they must be using emotion which in turn causes problems when making investments.
Once again, I have observed a shift from buyers and sellers making emotional decisions to now making logical decisions. I believe it was the emotional decisions that we made that drove the Myrtle Beach homes market up to unprecedented levels and then a series of emotional decisions that influenced the sharp decline. Emotional decisions are usually 'hope' based and logical decisions are typically based on facts.
So, what does this mean?
Now that people are accepting the market for what it is (I didn't say liking it...accepting it), they are now starting to evaluate their investments and to decide if they are committed to owning for the long term. Here are a few things that you may want to consider with your Myrtle Beach real estate investments:
1 - If we are going to see a flat real estate market for the next 5 years, are you okay with the current cashflow situation? Does the current cash flow situation for your property allow you to hold indefinitely, or are you still holding in anticipation of a “better price”?
2 - If you are waiting to sell so you can buy in another area, will the next property increase in price at the same pace that this property will? If so, you are selling high and then buying high. There is nothing to gain. Is waiting to get where you want to go worth the perceived gain that you are holding for?
3 - Can you manage the expenses of the investment for an additional 5 years in order to see what happens in the market? This downturn which feels like it “happened overnight” has been happening for 5 years. Consider what those who wanted to wait and see from 2006 until now have experienced with their value. Is the cost of another 5 years manageable if there is not “overnight change”?
4 - Can you do something to increase the rental income to help offset the expenses? Is there something you can control that will decrease the carrying cost? Some Myrtle Beach oceanfront condos cost more than others.
5 - Based on current supply levels, is it likely that your Myrtle Beach home or condo will appreciate over the next 5 years?
6 - Are you using the property enough to justify the cost? The costs associated with owning 2nd homes and/or investment properties is easily absorbed when the market is appreciating at a rapid pace. If the exit strategy of “selling for a profit” is gone, does holding for enjoyment make sense with what you are spending?
As an owner of Myrtle Beach real estate, only you can determine if selling or holding is the right thing to do. I have been discussing the above questions with many property owners and sometimes the answers mean they should sell and sometimes it means they should hold. Without knowing one's individual situation, I could never make a blanket statement suggesting everyone sell their property. What I can do is suggest that all property owners evaluate their current investments and come to a logical conclusion, based on facts, as to what they should do for the next 5 years.
As your Myrtle Beach Realtor, I am always willing to provide you with the information necessary to make sound investment decisions. Sometimes you should sell and some times you should hold on for the long run. Please let me know what information you need in order to come to a logical conclusion.
I remain committed to being your Myrtle Beach real estate resource. Please take advantage of my willingness to provide you information without obligation.