Grand Strand Real Estate News - December 2022

December 2022

Volume 2022 Issue 12

Dear Gene Carter Team,

Summary

It’s time for my annual detailed analysis of the previous year (2022). Please take time to look over the various charts and detailed comments in the main newsletter. Lots of cool stats! Here are the two big takeaways (explained in more detail in the body of the newsletter). 

The number of oceanfront condo sales was down 23% but the prices increased by 24%. Low inventory and lots of buyers. Supply and demand!

Most oceanfront condo buyers purchased with cash instead of financing in all price ranges, probably because of all the 1031 exchanges and the higher interest rates.

Current Market Conditions

December, which has historically been the slowest month of the year for oceanfront condo activity, was indeed very slow. The number of new listings and new sales were both down. 

The good news, for sellers at least, is that prices in most segments of the market seem to be holding on to the huge gains from the past year - mainly because the inventory, particularly for larger condos, has been holding steady - even decreasing slightly. 

Sellers, please don’t take this for granted. Right now is an exceptionally good time to sell - the best in 15 years. Please contact me if you would like a customized market analysis for your property.

Buyers, you should have more choices in the coming months. Historically, the pace of new listings increases dramatically by mid-January. Please contact Teressa if you are interested in purchasing.

The number of active oceanfront listings was down slightly but in the same general range as the past four months – 442 versus 460 in November. The number of active condo listings off the beach reversed a trend and decreased from 838 in November to 778 in December (See chart in body of newsletter). Pending sales decreased by 7.6% and closed sales decreased by 11.8% (See chart in body of newsletter).

Each owner’s and each potential buyer’s situation is unique so please contact us if you’re thinking of buying or selling, Teressa or I will be glad to work with you to develop your personalized plan to sell or to buy.

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

Greetings from Myrtle Beach,

It’s time for my annual detailed analysis of the previous year. 2022 was a record-breaking doozy! I hope you will take time to look over the various charts and comments but there are two big takeaways (explained in more detail in the body of the newsletter). Here they are. 

The number of oceanfront condo sales was down 23% but the prices increased by 24%. Low inventory and high demand. Supply and demand!

Most oceanfront condo buyers purchased with cash in all price ranges, probably because of all the 1031 exchanges and the higher interest rates.

Current Market Conditions

December was a relatively slow month in terms of oceanfront and resort condo activity. I’m sure part of this was seasonal with everybody preoccupied with the holidays. With the exception of the past two years (which were weird), December has historically been the slowest month of the year. Also, I think there was just some exhaustion after the torrid market pace of the past two years. The number of new listings and new sales were both down. 

The good news, for sellers at least, is that prices in most segments of the market seem to be holding on to the huge gains from the past year. I think this is mainly because the inventory, particularly for larger condos, has been holding steady - even decreasing slightly. 

Sellers, please don’t take this for granted. There are potential problems on the horizon – higher interest rates and a possible recession. With so much uncertainty, it is impossible to predict the future but right now is an exceptionally good time to sell - the best in 15 years. Please contact me if you would like a customized market analysis for your property.

Buyers, you should have more choices in the coming months. Historically, the pace of new listings increases dramatically by mid-January and remains strong into the late spring. It’s already picked up in the past two weeks. Please contact Teressa if you are interested in purchasing.

I can’t wait to see how this year plays out!

Here are a couple of charts I’ve been including in recent newsletters. The first shows the number of active listings in oceanfront buildings and non-oceanfront buildings. The number of active oceanfront listings was down slightly but in the same general range as the past four months – 442 versus 460 in November. The number of active condo listings off the beach reversed a trend and decreased from 838 in November to 778 in December. 

The following chart shows several metrics for oceanfront condos. Average price and the number of new listings increased very slightly, 1.1% and 2.5% respectively. Active listings decreased by 3.9% The most notable stats were that sales were down as previously mentioned. Pending sales decreased by 7.6% and closed sales decreased by 11.8%.

2022 Oceanfront and Resort Condo Sales Analysis

Here is my big annual condo sales analysis. Incidentally,  most resort condos (as opposed to condos purchased and occupied by primary residents) usually follow the same market trends as oceanfront condos. Stats on quite a few other resort condos (non-oceanfront) are also included. Let’s get started…

The first graph (below) shows the number of closed oceanfront condo sales in each year since 2003. 

The number of sales in 2022 decreased by 23% (2159 in 2022 vs. 2806 in 2021). Keep this in mind when we look at the next chart.

By the way, the number of closed sales for condos not in oceanfront buildings also decreased - by 18% (4918 in 2022 vs. 5966 in 2021). 

The next two graphs (below) show the average closed sale prices and the median closed sale prices for oceanfront condos for the same years.

The average closed sale price increased from $244,347 to $303,525, an increase of 24%.

The median closed sale price increased from $190,000 to $239,000, an increase of 21%.

So prices increased 24% in 2022 even though the number of sales decreased by 23%. This is the opposite of the year before when the number of sales increased by 65% but the average price only increased 7.4 % and the median price only increased 2.7%.

So what happened? If you’ve been reading my newsletters for a while, you know I always point out that prices are purely dependent on supply and demand - regardless of the reasons for the changes in supply and demand. When buyer interest started accelerating in late 2020 (triggered by low interest rates, Covid cabin fever, whatever) there was a huge supply of oceanfront condos, as there has been for many years (which is why prices had been flat for many years). Throughout late 2020 and most of 2021, the only thing those thousands of buyers were doing was reducing inventory. They weren’t paying any higher prices. Only when the number of listings of individual categories (unit types, specific buildings, etc.) approached zero did the prices start increasing. The exceptionally high 2021 rental incomes and the continuing low interest rates fueled the price increases more.

Prices have flattened out again over the past few months. Inventory remains low for oceanfront condos but there have been enough buyers to maintain prices for the larger condos - although prices for the smaller ones have decreased somewhat. 

The factors that will affect prices in 2023 include interest rates (which will almost certainly continue to climb), the economy, rental incomes (will they remain strong?) and other factors we can’t imagine yet (Did anyone expect Covid?). Regardless of the reasons, it’s still all about supply and demand. Right now listings for many types of oceanfront and resort condos are still scarce and there seem to be enough buyers to keep the prices stable. Let’s hope these conditions continue.   

The graph below shows closed oceanfront condo sales since 2019 by price range.

For the first time since I’ve been doing these reports, there were no sales at all under $50K. There were also far fewer sales in the $50K-$100K range, probably because the condos which were selling in this price range are now selling for $100K to $200K. In fact, the only price ranges in which there were increases in the number of sales in 2022 were $150K to $250K (mainly 1BRs) and over $400K (2BR to 4BR condos which were previously selling for much less). 

The following graph shows the number of closed sales versus the number of bedrooms.

The numbers of sales were down regardless of the number of bedrooms with similar decreases across the board.

This next chart shows the average selling price per number of bedrooms.

Prices increased about the same percentage regardless of the number of bedrooms.

The next graph shows cash purchases versus financed purchases by year. 

Cash purchases still dominate, representing over 59.5% of all oceanfront condo sales, a slightly lower percentage than last year. 

The next chart shows the ratio of cash purchases versus financed purchases per price range in 2022.

Another first since I’ve been doing these yearly analyses - Cash purchases predominated in every price range. The highest percentage of cash purchases were for the lower priced condos but most of the higher priced condos were also purchased with cash. I think many of the “cash” purchases were actually 1031 tax deferred exchanges.

The next two tables show the respective numbers of closed sales in selected oceanfront and non-oceanfront developments for the past several years. Generally, the number of sales roughly corresponds to the number of units in a development (the bigger the development, the more transactions).

The big takeaway from 2021’s report was that there were huge increases in sales for many of the condotel developments and luxury buildings. This year it’s the reverse. Although there is no clear pattern, there were significantly fewer sales in most of the condotel and luxury buildings. Since there were almost 650 fewer sales in 2022, it’s not surprising that these numbers were down. A lot of this once again has to do with inventory. There were simply fewer for sale – which is why prices went up.

For resort condos off the ocean…

The story is the same in non-oceanfront developments. There were fewer sales in most but the decreases were pretty evenly distributed - no developments that were radically different from the others.

OK, now for company performance. The following graphic shows the rankings for the top 10 real estate firms on the Grand Strand ranked by sales volume. 

Once again RE/MAX Southern Shores Finished second among all the firms in our market. The one company which finished ahead has 432 agents compared to our 165 agents. Below is a “per agent” comparison (with the Beach Pro Team’s numbers included).

Agents for "Company #1" only averaged 7.35 transactions in 2022. Agents in RE/MAX Southern Shores averaged 15.5 transactions. The Beach Pro Team ended up with 90 transactions (for an average for me and Teressa of 45 apiece)!

Well that’s the 2020 oceanfront condo sales report. Remember that each owner’s and each potential buyer’s situation is unique so please contact us if you’re thinking of buying or selling, Teressa or I will be glad to work with you to develop your personalized plan to sell or to buy.

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

See you at the beach! 

Here is a new review published in Zillow. 

• Gene was quite knowledgeable of the current housing market conditions, provided critical metrics, responsive, listened to my perspectives, and provided sound expertise. Larry. Mar Vista Grande. North Myrtle Beach.

• Highly likely to recommend Teressa and her team did an excellent job selling our condo and also helping us buy the home of our dreams. We would not have found this property had it not been for her excellent knowledge of the area and the market! I highly recommend Teressa for all your real estate needs. Harris. Myrtle Beach.

We have chosen to utilize Zillow's review platform. This is not an endorsement of Zillow (Please ignore the ridiculous "Zestimates") but we think an online third-party review service provides more credibility than simply printing reviews ourselves. At this time, we have over 130 reviews with more coming in each month. To see all of the reviews at any time, you can visit Zillow Beach Pro Team reviews. 

Grand Strand Market Report - November 2022

OF/OV Homes Brochures:    Link to Listings 

OF/OV Homes Spreadsheet:   Link to Spreadsheet 

OF/OV Condo Brochures:    Link to Listings

OF/OV Condo Spreadsheet:   Link to Spreadsheet

Non-OF Condo Brochures:     Link to Listings 

Non-OF Condo Spreadsheet:  Link to Spreadsheet