Grand Strand Real Estate News - August 2023

August 2023

Volume 2023 Issue 8

Dear Gene Carter Team,

Summary

We’ve been pretty busy the past few weeks. It’s a great time to visit (or shop for real estate). The next couple of months offer the best weather of the year.

Thanks for your patience regarding the website issues we have experienced in recent weeks (www.BeachProTeam.com). A change in the data feed from our local MLS caused a cascade of problems. We hope to have the remaining issues cleared up this week.

Real Estate Tax Bills for New Owners and Recent Sellers

Real estate tax bills for 2023 will be sent out in the next month. If you closed on a purchase in our area this calendar year, you will not receive a real estate tax bill but you will owe for your prorated portion of the year. At closing, the attorneys collected the seller’s portion of the real estate taxes. Our county sends the tax bills to the owner of record as of January 1 so the tax bill will be sent to the previous owner. You owe the tax regardless. 

You need to go online at https://www.horrycountysc.gov/online-services/ and look up the tax bill for your property (then pay).

If you sold a property this calendar year, the reverse applies and you will receive the bill even though your portion of this year’s taxes were collected at closing. You are not required to do anything at this point. Please do not pay the taxes that you don’t owe. 

Oceanfront and Resort Condo Market Update

The number of oceanfront condo listings has been increasing ever more rapidly, from 551 in July to 652 in August (See chart in newsletter). This is the highest number of active oceanfront listings since February of 2021. The number of active listings off the beach also increased again with 1008 in August vs. 961 in July. 

The number of new listings increased 21.6% and the number of active listings increased 18.1% (See chart in newsletter). The number of pending sales decreased 16.7% while the number of closed sales increased 30.5% (which indicates sales activity from 45 days ago). The big increase in active listings is the result of pending sales being down and new listings increasing rapidly. 

Sellers: Prices for larger condos (deluxe one bedrooms and up) are still holding up very close to the top of the market. Meanwhile, the number of active listings on the oceanfront is increasing in all categories now and prices for some of the “shotgun” one bedrooms and efficiencies have started to fall. There are some potential problems brewing for sellers in the near future so now might be a good time to cash out. Please contact me and I will be glad to discuss your specific situation.

Buyers: You have more choices every day, at least for the time being. It’s a great time to come down and look at properties. Please contact Teressa or Kevin to help you find the best deals.

New Home Sales

Resales won the battle in August (See chart in newsletter) with 537 closed sales versus 494 for new construction. Lots of new listings – 766 resales and 576 new construction homes. 

Many of the national builders are approaching the ends of their fiscal years. This may result in incentives and price reductions for buyers over the next month or two. Please contact Teressa or Kevin to help you find the best deals.

Time for Yearly Replacements and Upgrades!

There are lots of good reasons for owners to periodically make improvements to their properties - owner enjoyment, attractiveness to vacation rental guests (thereby improving rental incomes), attractiveness to potential buyers if selling (thereby improving the selling price), …. The best time to do this is typically in the fall and winter. If you own a condotel, please pay attention to the comments below regarding timing for this matter.

Improvements just for you - the owner: It’s best to periodically refresh your property for your own enjoyment.

Market Value: I’ve never seen the condition of a condo make as much difference in market value as it does now. The relative handful of condos which are truly up-to-date with today’s colors and styles can often command far higher prices than condos which have not been renovated. 

You don’t need to spend tens of thousands of dollars before listing. Relatively inexpensive improvements can dramatically enhance the way a property shows. 

Vacation Rental Property Replacements and Improvements

Renters want up-to-date decor in today’s popular colors, comfortable beds and furnishings, and modern kitchens. There are tens of thousands of oceanfront and resort choices, including a number of brand new hotels with 2BR and 3BR suites. 

Owners who handle their own rentals through VRBO, Airbnb or other sites, typically keep their condos in tip top shape. These rental websites allow renters to review each individual property. Properties with five-star reviews are going to do better than properties with three-star reviews.

Professional Rental Management Companies

It is often a battle to convince an owner to spend money on improvements and different companies utilize various strategies to incentivize these. 

Off-site companies are often very particular about which properties they will accept. Incidentally, many of the new “off-site” rental companies are not traditional brick and mortar businesses. They are virtual companies with no physical public interfaces.

Most off-site companies post high resolution pictures of their individual condos online which are updated each year to show improvements. Some also include review platforms for renters to fill out. Since renters can choose which specific units they want to stay in, the ones with the better pictures and better reviews will end up generating more rental income.

Condotels

Condotels operate like hotels. A guest is typically assigned to a condo rather than being allowed to choose. For this reason, onsite management does its best to keep all units as uniform as possible. There are various methods used to get the owners to do this.

Many condotels simply mandate certain upgrades each year.  This works in that it keeps all the units looking the same but, over time, the assortment of items purchased and installed at different times can look patched together and out of date. This is what fueled the idea for a “Bulk Upfit” to completely upgrade all the interiors in a resort all at once.

Buyers are aware of these costs as well as the seasonality of them. They will ask what upgrades are required and which ones have been completed and/or paid for before making an offer on a property. Many sellers like to list in September or October before the mandated upgrades for the following year are announced - typically in the late fall. 

There may be more required expenses this year than usual because of the failed “bulk upfits” that I’ve mentioned in previous newsletters. The resorts that planned these upfits had been holding off on the usual yearly improvements and replacements for several years and now these resorts are in dire need of attention and they are going to have to make up for lost time.  

Other condotels use a rating strategy. The management company inspects all the condos each year and gives each one a score. The score determines the rating. Incoming reservations are then assigned in a rotation based on the ratings. For instance, all of the A units are rented before the B units, which are all rented before the C units and so on. It can make a whopping difference in rental income, thereby incentivizing the owners to make improvements. These ratings and recommendations are typically done in the late fall as well and they are another factor potential buyers use to determine the value of a property.

We are starting to see new condotel concepts. One onsite rental company has a resort website and a centralized booking system but it lists each condo on its website with its own pictures and comments. A guest can choose whichever condo he wants. The best looking condos end up with higher rental incomes, incentivizing the owners to upgrade. All of the condos are also individually entered on VRBO, Airbnb and about 30 other websites. Most of these have review platforms, giving each owner another way to separate his condo from the competing condos in the same resort and another reason to make improvements. We may see more of this in the future.

Regardless of which situation an owner finds himself, now is the time to prepare for those offseason improvements.

Please Contact The Beach Pro Team If:

You are thinking of buying or selling an oceanfront or resort condo in our area

                                                                  Or

You are considering moving to our area or know someone else who is

                                                                   Or

You are an agent who has clients thinking of moving here or buying or selling in our area

                                                                   Or

You currently own a condo in our area and want a permanent home here

Check out our usual Grand Strand Market Reports, Sales and Listing Updates, my Best Buys, and new Beach Pro Team reviews. 

Greetings from The Grand Strand!

Well, the peak summer tourist season is over. Believe it or not, that generally means oceanfront and resort condo sales activity picks up! So far that seems to be the case as we have been pretty busy the past few weeks. Also, the next couple of months offer the best weather of the year – a little cooler, breezier, and drier than the summer - but not chilly yet. It’s a great time to visit (or shop for real estate) with lots of festivals and activities to accompany the nice weather.

Thanks for your patience regarding the website issues we have experienced in recent weeks (www.BeachProTeam.com). As mentioned in an email we sent out to our database, a change in the data feed from our local MLS caused a cascade of problems. Figuratively, their round peg for our round hole was changed to a square peg. There is still an issue with the Quick Search not finding condo listings and only active listings are currently showing up in searches (but not pending listings). We hope to have the remaining issues cleared up this week.

There are a couple of timing-sensitive issues which could affect real estate buyers and sellers in the next few months. For one thing, this is the time of year when many vacation rental property owners and management companies get started on preparations for the upgrades and renovations which are typically performed in the off-season. I’ll go into this in more detail below. Also, real estate tax bills will be sent out soon and there are a few things recent buyers and sellers need to know.

Real Estate Tax Bills for New Owners and Recent Sellers

Real estate tax bills for 2023 will be sent out in the next month. If you closed on a purchase in our area this calendar year, you will not receive a real estate tax bill but you will owe for your prorated portion of the year. At closing, the attorneys collected the seller’s portion of the real estate taxes using last year’s tax bill as a model for the calculations. Unfortunately, our county sends the tax bills to the owner of record as of January 1 so the tax bill will be sent to the previous owner. You owe the taxes regardless and if they are not paid by January 15, penalties will be added.

You need to go online at https://www.horrycountysc.gov/online-services/ and look up the tax bill for your property (then pay).

If you sold a property this calendar year, the reverse applies. The attorneys will have collected your prorated portion of the year's tax bill at closing and you don’t owe anything else. However, you will receive the bill. You are not required to do anything at this point. Please do not pay the taxes that you don’t owe. 

Oceanfront and Resort Condo Market Update

As you can see in the updated chart below, the number of oceanfront condo listings has been increasing ever more rapidly, from 551 in July to 652 in August. This is the highest number of active oceanfront listings since February of 2021. Last year, we saw an increase in active listings from March through July and then it flattened out for the remainder of the year. So far, that is not happening in 2023. The number of active listings off the beach also increased again with 1008 in August vs. 961 in July. 

The chart below shows month to month metrics for oceanfront condos. The number of new listings increased 21.6% and the number of active listings increased 18.1%. The number of pending sales decreased 16.7% while the number of closed sales increased 30.5% (which indicates sales activity from 45 days ago). The big increase in active listings is the result of pending sales being down and new listings increasing rapidly. 

Sellers: Prices for larger condos (deluxe one bedrooms and up) are still holding up very close to the top of the market. Meanwhile, the number of active listings on the oceanfront is increasing in all categories now and prices for some of the “shotgun” one bedrooms and efficiencies have started to fall. As I mentioned last month, there are some potential problems brewing for sellers in the near future so now might be a good time to cash out if you plan to sell in the next year or two. Please contact me and I will be glad to discuss your specific situation.

Buyers: You have more choices every day, at least for the time being. Our inventory increased last summer but then contracted again in the fall and early spring. It’s a great time to come down and look at properties. It’s easier to see properties than in the middle of the summer when everything is rented. Also, the weather is generally great this time of year. Please contact Teressa or Kevin to help you find the best deals.

New Home Sales

The chart below shows single-family home stats for August. This time resales won the battle with 537 closed sales versus 494 for new construction. Lots of new listings – 766 resales and 576 new construction homes. 

Please note that many of the national builders are approaching the ends of their fiscal years. This means they are pulling out all the stops to make their yearly sales goals. This may result in incentives and price reductions for buyers over the next month or two. Please contact Teressa or Kevin to help you find the best deals.

Time for Yearly Replacements and Upgrades!

There are lots of good reasons for owners to periodically make improvements to their properties - owner enjoyment, replacement of worn-out furnishings and appliances, attractiveness to vacation rental guests (thereby improving rental incomes), attractiveness to potential buyers if selling (thereby improving the selling price), …. The best time to do this is typically in the fall and winter. If you own a condotel, please pay attention to the comments below regarding timing for this matter.

Improvements just for you - the owner: It’s best to periodically refresh your property for your own enjoyment. Many owners express sadness when they prep their condo for listing and find that their property looks the best it ever has on the day it sells.

Market Value: I’ve never seen the condition of a condo make as much difference in market value as it does now. I think the fact that so many of them look tired with dated furnishings makes the ones with improvements really stand out and buyers are willing to pay the difference. The relative handful of condos which are truly up-to-date with today’s colors and styles can often command far higher prices than condos which have not been renovated, even for identical floor plans. 

You don’t need to spend tens of thousands of dollars before listing. A good compromise may be to perform relatively inexpensive improvements which can dramatically enhance the way a property shows. Fresh paint in currently popular colors can make a world of difference. It’s also often worth the expenditure to replace old carpet with new LVP or tile flooring and to replace particularly worn furnishings.

Vacation Rental Property Replacements and Improvements

Renters pay close attention to the conditions of the properties they stay in. They also want up-to-date decor in today’s popular colors, comfortable beds and furnishings, and modern kitchens. There are tens of thousands of oceanfront and resort condos in our area and renters have lots of choices. They also have a number of brand new hotels as well, many offering 2 and 3BR suites as well as traditional hotel rooms. 

Owners who handle their own rentals through VRBO, Airbnb or other sites, typically keep their condos in tip top shape. If they buy one without modern furnishings and decor, they will spend whatever it takes to get to the level it needs to be. Note that these rental websites allow renters to review each individual property. As you might imagine, properties with five-star reviews are going to do lots better than properties with three-star reviews. Incidentally, the reviews also are impacted by the efficiency and friendliness of the host in addition to the condition of the condo.

Professional Rental Management Companies

It was often a battle to convince an owner to spend money on improvements when I owned my vacation rental management company. A number of different strategies are used to deal with this dilemma.

Off-site companies are often very particular about which properties they will accept on their programs. This is particularly true of the handful of rental companies that generate the highest incomes. Incidentally, many of the new “off-site” rental companies are not traditional brick and mortar businesses. They are virtual companies with no physical public interfaces.

Most off-site companies post high resolution pictures of their individual condos online which are updated each year to reflect improvements. Some also include review platforms for renters to fill out. Since renters can choose which specific units they want to stay in, the ones with the better pictures and better reviews will end up generating more rental income.

Condotels

Condotels operate like hotels. A guest is typically assigned to a condo rather than being allowed to choose. For this reason, onsite management does its best to keep all units as uniform as possible.There are various methods for this. Note that, regardless of the method, the owner pays for the replacements and improvements. It’s part of the cost of the investment. 

Many condotels simply mandate certain upgrades each year.  New sofas this year, new flooring the next year, new paint the next year, new drapes the next year, new refrigerators the next year, etc. This works in that it keeps all the units looking the same but, over time, the assortment of items purchased and installed at different times can look patched together and out of date. This is what fueled the idea for a “Bulk Upfit” to completely upgrade all the interiors in a resort all at once.

Buyers are aware of these costs as well as the seasonality of them. They will ask what upgrades are required and which ones have been completed and/or paid for before making an offer on a property. Many sellers like to list in September or October before the mandated upgrades for the following year are announced - typically in the late fall. 

There may be more required expenses this year than usual because of the failed “bulk upfits” that I’ve mentioned in previous newsletters. The resorts that planned these upfits had been holding off on the usual yearly improvements and replacements for several years and now these resorts are in dire need of attention and they are going to have to make up for lost time.  

Other condotels use a rating strategy. Instead of mandating specific upgrades, they have A, B, and C units or Platinum, Gold, and Silver units. The management company inspects all the condos each year and gives each one a score. The score determines the rating. Incoming reservations are then assigned in a rotation based on the ratings. All of the A units are rented before the B units, which are all rented before the C units and so on. It can make a whopping difference in rental income, thereby incentivizing the owners to make improvements. The management companies will often assist (logistically) the owners’ efforts to improve their ratings. These ratings and recommendations are typically done in the late fall as well.

We are starting to see new condotel concepts. A very large national rental company which recently bought out a sizable local condotel management firm has incorporated a different strategy to keep their condos in good condition. It’s actually a centralized booking system incorporating a combination of ideas borrowed from off-site companies and individual owners. Although this company has a resort website and a centralized booking system, it lists each condo on its website with its own pictures and comments. A guest can choose whichever condo he wants. The best looking condos end up with higher rental incomes, incentivizing the owners to upgrade. All of the condos are also individually entered on VRBO, Airbnb and about 30 other websites. Most of these have review platforms, giving each owner another way to separate his condo from the competing condos in the same resort and another reason to make improvements.

Regardless of which situation an owner finds himself, now is the time to prepare for those offseason improvements.

Please Contact The Beach Pro Team If:

You are thinking of buying or selling an oceanfront or resort condo in our area

                                                                  Or

You are considering moving to our area or know someone else who is

                                                                  Or

You are an agent who has clients thinking of moving here or buying or selling in our area

                                                                  Or

You currently own a condo in our area and want a permanent home

That’s all for now. Check out our usual Grand Strand Market Reports, Sales and Listing Updates, my Best Buys, and new Beach Pro Team reviews.

See you at the beach!