Grand Strand Real Estate News - June 2022

June 2022

Volume 2022 Issue 6

Dear Gene Carter Team,

Summary

The real estate market is definitely cooling down. The numbers of pending sales and closed sales are trending lower and the number of properties on the market is trending higher. The good news for potential sellers is that prices are generally much higher than they were a year or two ago (or any time in the past 15 years!). The good news for buyers is that there are now actually good choices of available properties to buy. Market details below but here are a few other news updates.

Condotel interest rates are currently lower than conventional second home rates (Wow!). The recent Fed interest rate hikes, in combination with some overlaid fees specifically targeting second homes, have created this extremely unusual situation. We have been helping buyers find favorable portfolio programs for their second home purchases. If you are considering a purchase of this type in our area, please contact us.

New oceanfront hotels are in the works (but no new condo towers). A new dual-branded 25 story Marriott resort hotel opened this spring next to the Breakers Resort on 21st Ave North in Myrtle Beach and several other hotels are planned.

Current Real Estate Analysis:

There are now 482 condo listings in oceanfront buildings, up from 121 on March 7. There are now 593 non-oceanfront condo listings versus 184  on March 7. (See chart). At this rate of increase, by early next year, condo listings will be back to the approximate levels these have been at for the past decade.

This month, in addition to the data I collect specifically for oceanfront and resort condos, we take a detailed look at sales, prices and listings for single family homes and all condos and townhouses on some graphs provided to our local Realtor Association since the beginning of 2019 (graphs below). FYI, the most recent data on these graphs appears to be at least a month old so the market has shifted somewhat.

Note that the dynamics for single family homes and oceanfront condos are very different: 

New single family houses are being added to the market all the time, making up about a third of the sales in recent years. Recent construction cost increases have driven prices up a great deal in the past couple of years. Meanwhile, there has not been a new oceanfront condo completed since 2009.

Single family houses are typically purchased for a specific immediate need whereas oceanfront and resort condo purchases and sales are generally discretionary.

A seller for a single family house has to then have a place to live. A seller of an oceanfront or resort condo generally has no such restrictions. 

The assumption that houses are being bought to live in and condos are being bought as second homes and rental properties is not true anymore.  Investors are building and buying single family houses and many people are choosing to buy condos and townhouses as primary residences.

Properties for Sale (Available Inventory): Two graphs below showing the number of SFH and condo/TH for sale at any given time. The patterns look remarkably similar with a huge decrease in inventory  - 59% for SFH vs 73% for cond/TH (with oceanfront condo inventory dropping about 90% per my stats). The house inventory started dropping a little earlier (November of 2019) versus early fall of 2020 for condo/TH. Both appear to have bottomed out in March of this year and listings have been increasing since then.

Closed Sales: Two graphs below showing the number of closed sales for SFH and condo/TH in each given month. Similar patterns with both showing sharp increases between June of 2020 and June of 2021. House sales flattened out from there, possibly because of the shortage of new construction homes. Condo sales continued upward at a slower pace and then dropped sharply after March of this year. 

Median Sales Prices: Two graphs showing the median prices for SFH and condo/Th in each given month. The patterns for these look almost identical and median prices increased continuously and are still increasing. Will this continue in the future? At some point, prices will level off. I think we will start seeing this with oceanfront and resort condos soon. I’m not as sure for single family house prices given the effects of increasing construction costs on new houses.

Just because median prices go up or down, it does not mean the value of a specific property automatically goes up or down. Thousands of sales make up these numbers and sometimes it is just a result of a change in the distribution of sales.

If you want to know the market value of your property, please contact me for a  free estimate.

Conclusions: The patterns for single family houses and townhouse/condos in these graphs look surprisingly similar considering the very different reasons why most people buy condos/townhouses versus the reasons most people buy single family houses. Regardless of the causes, we ended up with a wave of buyers who bought up all the available inventory, creating a classic seller’s market. The law of supply and demand always works, regardless of the reasons for the levels of supply or demand. 

No one can predict if the patterns for sales of oceanfront and resort condos and single family houses will continue to be this similar but I would not be surprised to see them diverge somewhat in the future. 

Sellers: As always, please contact me if you are thinking of selling. For rental owners, the timing is perfect to sell and still keep all of your peak summer income. Prices are at a 17 year high and this may be as good as it’s going to get in this market cycle. 

Buyers: There’s more inventory than we’ve seen in a couple of years and Teressa is ready to help you find that perfect property.

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.

Greetings From The Grand Strand!

We’re at the mid-summer mark and all reports point to another record-breaking tourist season for our area. Meanwhile, the real estate market is definitely cooling down. The numbers of pending sales and closed sales are trending lower and the number of properties on the market is trending higher. The stats show clear inflection points. The good news for potential sellers is that prices are generally much higher than they were a year or two ago (or any time in the past 15 years!). The good news for buyers is that there are now actually good choices of available properties to buy.

I typically focus on oceanfront and resort condos so I provide data from my own research (since this is not available from any other source). This month, in addition to this, I’ll take a look at the broader data provided by our local Realtor Association for all condos and townhouses and single family houses. By the way, there are similar charts available in each of my monthly newsletters under “Grand Strand Market Report”.

Let’s catch up on a few other newsworthy items before I dig into the real estate stats. 

Condotel interest rates are currently lower than conventional second home rates. The recent Fed interest rate hikes, in combination with some overlaid fees specifically targeting second homes, have created this extremely unusual situation. In a newsletter last year I highlighted the glaring discrepancy in rates when condotel rates (using inhouse portfolio programs) were almost twice as high as conventional rates (using Freddie Mac and Fannie Mae programs). Since then condotel rates have only moved marginally higher while the conventional second home rates have skyrocketed from their absurdly low levels. We have been helping buyers find favorable portfolio programs for their second home purchases. If you are considering a purchase of this type in our area, please contact us.

New oceanfront hotels are in the works (but no new condo towers). A new dual-branded 25 story Marriott resort hotel opened this spring next to the Breakers Resort on 21st Ave North in Myrtle Beach. Separate developers also want to build a 95 unit hotel at 29th Ave South and a 300-unit Holiday Inn Club Vacations Oceanfront Resort by the corner of Springmaid and Ocean Boulevards. Other hotels are reportedly being planned as well.

OK, Back to the real estate market analysis.

First, here’s the graph I’ve been including every month showing the number of active listings for oceanfront and resort condos. 

There are now 482 condo listings in oceanfront buildings, up from 121 on March 7. There are now 593 non-oceanfront condo listings versus 184  on March 7. If this rate of increase continues, there will be around 1000 oceanfront condo listings and 1500 condo listings off the beach by early next year - back to the approximate levels these have been at for the past decade. 

Let’s take a detailed look at sales, prices and listings for single family homes and all condos and townhouses. Below are some graphs provided to our local Realtor Association by InfoSparks. We’ll look at data for condos and townhouses (all of which are bundled together) as well as single family homes from January 2019 until early June 2022 (not sure of the date). Here are a few things to keep in mind:

The most recent data on these graphs appears to be at least a month old so the market has changed somewhat in the meantime. For instance, the number of active condo and townhouse listings is 731 for “June” according to the pop-up info on the online version. There are actually 1075 active listings at this moment. 

The dynamics for single family homes and oceanfront condos are very different: 

New single family houses are being added to the market all the time, making up about a third of the sales in recent years. Recent construction cost increases have driven prices up a great deal in the past couple of years. 

Meanwhile, there has not been a new oceanfront condo completed since 2009 so there has been no new inventory and construction costs have not been factors in the price increases..

Single family houses are typically purchased for a specific need - growing family, retirement to a better, warmer area, etc. 

Oceanfront and resort condo purchases and sales are generally discretionary - no one truly needs to buy one (although there are lots or good reasons to buy) and very few sellers in our present market truly need to sell. 

A seller for a single family house has to then have a place to live. A seller of an oceanfront or resort condo generally has no such restrictions. 

The assumption that houses are being bought to live in and condos are being bought as second homes and rental properties is not true anymore.  A growing number of single family houses are being purchased or built by investors to rent and there are lots of condos and townhouses being built and sold in our area as primary residences because the prices for detached houses have placed them out of reach for many buyers.

Properties for Sale (Available Inventory) 

The two graphs below show the number of properties for sale at any given time.

The patterns look remarkably similar with huge decreases in inventory  - 59% for SFH vs 73% for cond/TH (with oceanfront condo inventory dropping about 90% per my stats). The house inventory started dropping a little earlier (November of 2019) versus early fall of 2020 for condo/TH. Both appear to have bottomed out in March of this year and listings have been increasing since then. As mentioned earlier, condo listings have gone up quite a bit since the final data point on this report - from 731 to 1075 listings (per MLS today) - so the next report should show a sharp increase. House listings have not changed as much in the past month - from 1636 on the final data point to 1679 today.

Closed Sales

The two graphs below show the number of closed sales in each given month.

The patterns look somewhat similar with both showing sharp increases in closed sales between June of 2020 and June of 2021. House sales flattened out from there, possibly because of the shortage of new construction homes. Condo sales continued upward at a slower pace and then dropped sharply after March of this year. 

Median Sales Prices

The two graphs show the median sales prices in each given month.

The patterns for these look almost identical and median prices increased continuously and are still increasing (at least through the data-collecting period for these reports). Will this continue in the future? At some point, prices will level off. I think we will start seeing this with oceanfront and resort condos soon. I’m not as sure for single family house prices. As mentioned, the dynamics are different. In particular, the effects of new homes and increasing construction costs combined with the basic need for people to have a place to live could keep driving prices up.

Just because median prices go up or down, it does not mean the value of a specific property automatically goes up or down. Thousands of sales make up these numbers. One factor that is often overlooked is that when a median price (or average price) changes, sometimes it is just a result of a change in the distribution of sales. For instance, prices for luxury houses could still be going up while the median price is going down if a very popular type of inexpensive house comes on the market and lots of people buy these inexpensive houses. In other words, all real estate is hyper-local - right down to the neighborhood and floorplan. 

If you want to know the market value of your property, please contact me for a  free estimate.

Conclusions

The patterns for single family houses and townhouse/condos in these graphs look surprisingly similar considering the very different reasons why most people buy condos/townhouses versus the reasons most people buy single family houses. I think this is because, even if they bought for different reasons (low interest rates, higher rental incomes for condos, the pandemic causing people to “get of the fence” about big life choices, etc.) we ended up with a wave of buyers who bought up all the available inventory, creating a classic seller’s market. The law of supply and demand always works, regardless of the reasons for the levels of supply or demand. 

No one can predict if the patterns for sales of oceanfront and resort condos and single family houses will continue to be this similar but I would not be surprised to see them diverge somewhat in the future. 

Sellers: As always, please contact me if you are thinking of selling.  For rental owners, the timing is perfect to sell and keep all of your peak summer income. For anyone thinking of selling, prices are at a 17 year high and there are lots of signs that this may be as good as it’s going to get in this market cycle. 

Buyers: There’s more inventory than we’ve seen in a couple of years and Teressa is ready to help you find that perfect property.

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!

Here is some new reviews published in Zillow. 

• Gene has extensive knowledge of Myrtle Beach properties and fellow realtors, We sold our condo for over asking price, thanks to Gene. We highly recommend Gene to anyone looking to buy or sell in the Myrtle Beach area. Myrtle Beach.

• Gene not only sold our condo, he was the agent that helped me buy this unit 7 years ago. He is in class by himself. He has the local knowledge and overall expertise in every area. You are leaving money on the table if you use anyone else but Gene. He also has a great team, Teressa Carter -Buyers agent and the best Client Care Coordinator in Horry county - Bea Shifflett. Trust me when I tell you they come no better than Gene, a great agent and person. Steve. Caribbean. 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 - May 2021

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

Gene Carter

Beach Pro Team

Cell Phone:  843-455-4785

Email: GeneCarter@BeachProTeam.com

Website:  www.BeachProTeam.com