Real Estate Market Sending Mixed Signals

Greg Harrelson - Myrtle Beach Realtor

As you know, last month I reported a spike in buyer activity along the Grand Strand for the months of February, March and April. During this three month stretch, we saw increased activity in buyer calls, internet visitors, showings on our listings as well as many completed sales contracts. Now we are going into the summer which many people believe is our busiest season for real estate sales and we are ready to capitalize on the anticipated activity.

There are a few concerns amongst the top Myrtle Beach Realtors that I will address this month in hopes to keep you abreast of what we see by being in the real estate trenches of Myrtle Beach.

1. The late winter and early spring proved to be better this year than in the past few for sales. I talked to 5 of the top companies in the last two weeks and all of them have told me that the increased momentum of the first quarter has seemed to slow a good bit. As a matter of fact, 4 of the 5 saw decreases in May 2011 compared to 2010.

What is the cause? My opinion is that a lot of investors came into our market and scooped up some really great deals. They made these investments early in the year so they could close the transaction and capitilize on the summer rental income. Anyone purchasing for investment today will likely miss out on all of June and July rental income leaving them just August income, which is not nearly enough to offset the expenses of condo ownership.

2. New home construction is taking place all over the strand. This is likely going to be the next sector of our real estate market to cause existing homeowners a problem. We all know that foreclosures captured the attention of many buyers looking for a deal, leaving the non-distressed home seller with few options other than lowering their price to get the property sold. Now that foreclosures have declined a bit, new construction is the hot topic. In many areas of Myrtle Beach, new construction homes are priced at the same levels as pre-owned homes. Buyers are paying attention because in many cases they can buy a new home for the same or less than a resale. I know it is hard to believe that developers are building homes in Myrtle Beach again, yet look around and you will see plywood, two by fours, and other building materials in almost every community that has undeveloped lots for sale.

3. You should have heard by now that South Carolina has again put a halt to foreclosures in order for banks and property owners to workout a modification on mortgages. This has decreased the amount of foreclosures being listed temporarily. The challenge is that this will likely last for only a couple of months which means they will begin foreclosing again in the fall. Winter will likely be dumping these distressed properties onto our market after the best selling  season of the year. In other words, we may have a situation where supply increases at the same time as demand decreases. I am watching for updates because this could have a negative impact on our market.

On the positive side, there are some good things to consider about the local real estate market. I know it is easy to catch one's attention by reporting negative news all of the time. As always, my intention is to be transparent with the consumer and share more than one perspective. I think the following is worthy of noting:

  • Due to the temporary halt in foreclosures, many property owners have been able to list their property and sell in less than 90 days. In some cases, I sold properties within a week or two of putting it on the market. My seller got top dollar because we hit the market at a time when the foreclosoures were sold and there was very little competition. Our strategy was to take advantage of the opportunitty before the state allowed the banks to foreclose again.

  • Banks are really cooperating with those property owners that are upside down on their mortgage, or those that are falling behind on the payments. We have seen a huge increase in Myrtle Beach Short Sale approvals. I know that short sales are distressed sales and that is never good for a real estate market. Yet every time a short sale is approved; that is one less foreclosure to hit our market. Short sales do less damage then foreclosures.

  • Financing is loosening a little. Don't get me wrong, banks are still tight, but they are starting to make more loans. I have banks sending me information daily as to what they will lend on and it is obvious that they are making soome changes. Our buyers are finding great loans for both homes and condos.

  • Overall, supply has dipped over the past 6 months making the chances of getting a property sold for a fair price much better than the recent past. The shift in supply varies in property type as well as buildings and communities, so if you want to know how the recent shifts impact you and your investment then feel free to call or email us for that report. In many cases, this dip has created a window of opportunity to get a property sold before the fall and winter.

We hope you find this months report helpful. A sincere "thank you!" to those who forward this report to other property owners in the Myrtle Beach area. We have spoken with many of them and sent them the information they requested. As always, if you need additional information, please contact us. We are committed to being your Myrtle Beach real estate resource and would love to be the solution to all of your real estate needs. Please contact us or call with any questions or requests!