Beach Pro Team, Gene Carter REALTOR
https://www.beachproteam.com/blog/grand-strand-real-estate-news-march-2021


Grand Strand Real Estate News - March 2021

Posted By: Gene Carter In: Monthly Real Estate News
Date: Thu, Apr 1st 2021 1:20 pm



Grand Strand Real Estate News


March 2021


Volume 2021 Issue 3

If you would like to receive this monthly newsletter CLICK HERE


Dear Gene Carter Team,


Summary


March has been the busiest month we’ve had in many years.Teressa and I have already sold 34 properties these first three months of 2021. All but a couple were resort and oceanfront condos. I added 5 new listings to MLS this past Friday and 4 of them were sold by Monday. There have been 1000 to 1200 active oceanfront condo listings at any given time for the past 12 years but the number has dropped from 768 last month to 640 today, a 17% reduction in inventory in 30 days. Sales for condos off the beach are just as hot. 1BRs and efficiencies as well as condotels in general are still lagging the market but the pace is picking up for all of these as well.

Does all this crazy activity mean prices are skyrocketing? Generally, no. Other than a few exceptions, we are seeing solid price increases in most segments of the market but not galloping appreciation. However, extremely low inventory in a few segments could lead to some big price gains in the near future.

One of the market segments with practically no inventory at this time is oceanfront condos in North Myrtle Beach - particularly the newer buildings. If you own an oceanfront condo in North Myrtle Beach or in one of the non-condotel buildings on the ocean anywhere on the Grand Strand, contact me if you want to test the market in a new price range!

Are buyers snapping up condos to flip them for big profits? No. Unlike in our “boom” about 15 years ago, I have yet to encounter one true speculator planning to “flip” a property. Buyers are buying for the right reasons. They are buying properties to live in, use as second homes, or rent out as investment properties.

What to expect? Despite demand increasing and inventory dropping, I don’t think prices will just keep going up in a straight line as they did during the bubble back in 2005. 

For one thing, lenders are being much more strict than they were at that time. They now insist on seeing an income stream sufficient to cover a borrower’s debt-to income ratio, regardless of his or her assets. They are also limiting the number of loans to any one individual.

Also, appraisers are operating under strict rules which only allow them to value properties according to directly comparable previously closed sales (same building, same floor plan, closing date usually within 90 days). In other words, whenever a listing goes under contract with a financing contingency at a price higher than the last one similar to it sold for, it’s likely it will not appraise at the selling price agreed upon by the buyer and seller, even if there were multiple offers at that price.

The other big reason I think we will see structured, gradual appreciation instead of extremely rapid price increases is because the supply side for oceanfront and resort condos has room to grow to match the buyer demand for most segments of the market. There is a large potential source of listing supply in the huge number of people who bought 10 to 20 years ago who have been waiting to sell for years until market prices increased. This requires some explanation.

The following is the pattern I’ve seen for the past 20 years in individual buildings and across the market as inventory levels drop. As supply decreases, as is happening now, prices start going up as the increasingly rare sellers demand higher prices. Prices don’t usually go up until the supply is at or approaches zero (at least for a particular floor plan or attractive building location). As prices go up, sellers who have been waiting for better market conditions now decide to list, thereby adding to the supply, which, in turn, tends to moderate prices. If demand remains strong, inventory drops again until prices start going up, followed by more listings and the cycle starts over. Be aware that if demand is not strong enough, prices can plateau at one level for a long time - often for years - even though sales continue. With present market conditions, I do expect prices to increase. In most segments of the market, they already have. But the price increases will probably come in cycles over time.

One wild card that could result in extreme appreciation is if speculators start buying in large numbers or if demand for our area becomes superheated for some other reason, overwhelming the number of potential sellers. Anything is possible but I think the restraints from the lenders and appraisers will probably keep this from happening. 

Buyers - There are still plenty of good deals out there but anticipate higher prices going forward. This is good news. Wouldn’t you rather buy in a market where prices are going up than one in which they are not? Also - we still have low interest rates and a strong rental season is right around the corner.

Sellers - It’s a great time to sell - lots of eager buyers out there. Your property can probably be sold quickly at a price higher than it could’ve been not so long ago. Keep in mind, however, that prices in our oceanfront resort condo market typically do not go up in a straight line so tomorrow might not be a better time to sell than today. The cycle I described earlier also varies from building to building and even floor plan to floor plan. If you have been waiting for a while to sell, now might be a good time. Please contact me and we can go over your particular situation.

Other News:

Late Covid surge as people drop precautions but the end is in sight as vaccinations will be available to everyone 16 and over statewide in the coming weeks.

All reports point to an exceptionally strong upcoming vacation rental season.

Southwest Airlines will start flights to our area for the first time.

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



Greetings from The Grand Strand!

Some of you may be getting bored with my reports of how busy our market has been in recent months but get ready for another one. This has been the busiest month yet. After the last few lengthy analytical newsletters filled with lots of graphs, I’ll spare the illustrations and just give you some anecdotal data and personal observations.

Teressa and I have already sold 34 properties in less than three months. All but a couple were resort and oceanfront condos. These are just our new contracts. We also had some additional closings from last year’s contracts mixed in. By the way, although most local agents are doing well, we’re doing way better than most.

I added 5 new listings to MLS this past Friday and 4 of them were sold by Monday.

I mentioned in last month’s newsletter that there were only 768 active oceanfront condo listings and that this number was far less than the normal 1000 to 1200 listings we’ve seen at any given time for the past 12 years. Well, I checked today and there are now only 640 active oceanfront condo listings. That’s a 17% drop in inventory in 30 days.

Sales for condos off the beach are just as hot. Magnolia Pointe, a large golf course condominium complex in which Teressa has sold a number of properties, had 107 sales in 2020. Magnolia Pointe has over 850 residences. There are currently only 7 active listings for sale - less than 1 percent of all the units in the complex! Of these, only one has been on the market more than 28 days.

As busy as it’s been, there are a few segments of the market still lagging. For instance, of those 640 current active oceanfront listings, 359 of them are one bedrooms and efficiencies. These are definitely still selling slower than the larger condos although the pace is picking up.
 
Condotels in general are still selling slower than other parts of the market but the pace is picking up for these as well, especially for the larger condos.

Does all this crazy activity mean prices are skyrocketing? Generally, no. Other than a few exceptions, we are seeing solid price increases in most segments of the market but not galloping appreciation. However, extremely low inventory in a few segments could lead to some big price gains in the near future.

One of the market segments with practically no inventory at this time is oceanfront condos in North Myrtle Beach - particularly the newer buildings. If you own an oceanfront condo in North Myrtle Beach or in one of the non-condotel buildings on the ocean anywhere on the Grand Strand, contact me if you want to test the market in a new price range!

Are buyers snapping up condos to flip them for big profits? No. Unlike in our “boom” about 15 years ago, I have yet to encounter one true speculator planning to “flip” a property. Buyers are buying for the right reasons. They are buying properties to live in, use as second homes, or rent out as investment properties.


What to expect? Price is a function of supply and demand, so if the demand is increasing and inventory is dropping, why won’t prices just keep going up in a straight line as they did during the bubble back in 2005? 

My crystal ball is broken at the moment but there are reasons to believe that, although we will almost certainly see higher prices, we probably won’t see a crazy run-up in our market like we did back in the 2003 to 2006 time frame. 

For one thing, the lenders are being much more strict than they were at that time (when anyone could borrow as much as they wanted with no documentation). In particular, lenders now want to see an income stream sufficient to cover a borrower’s debt-to income ratio, regardless of his or her assets. They are also limiting the number of loans to any one individual.

Also, appraisals are holding prices back. Appraisers are operating under strict rules which only allow them to value properties according to directly comparable previously closed sales (same building, same floor plan, closing date usually within 90 days) and they are not allowed to account for market timing or high demand as they did from 2003 to 2005 when appraisals kept pace with whatever prices buyers were willing to pay. In other words, whenever a listing goes under contract with a financing contingency at a price higher than the last one like it sold for, it will probably not appraise at the selling price agreed upon by the buyer and seller, even if there were multiple offers at that price. Depending on the situation, either the seller or buyer can hold his ground and gamble that it won’t kill the sale or the buyer and seller can negotiate a price in between the appraised value and the contract selling price. Regardless, the methods appraisers are required to use restrain appreciation.

The other big reason I think we will see structured, gradual appreciation instead of extremely rapid price increases is because the supply side for oceanfront and resort condos has room to grow to match the buyer demand in most segments of the market. This will require some explanation. 

Although no one is adding supply by building new oceanfront condo towers yet, there is a large potential source of listing supply in the huge number of people who bought 10 to 20 years ago who have been waiting to sell until market prices increased. Many have retired and they want to simplify. Many don’t live within easy driving distance anymore or their kids are grown now and have moved away. There are lots of reasons but I know these wanna-sell owners are out there. I get calls every week. Keep in mind that this is different from a residential market in which sellers would have to move somewhere else if they decided to sell. These are properties which were discretionary purchases all along with nothing holding a seller back from deciding to sell in an instant if he or she feels the time is right.


The following is the pattern I’ve seen for the past 20 years in individual buildings and across the market as inventory levels drop. I even saw this same pattern back during the run-up between 2003 and 2005 in super-fast-forward as lender-fed speculators overwhelmed the market. Here’s how it goes.

As supply decreases, as is happening now, prices start going up as the increasingly rare sellers demand higher prices. Prices don’t usually go up until the supply is at or approaches zero (at least for a particular floor plan or attractive building location). As prices go up, sellers who have been waiting for better market conditions now decide to list, thereby adding to the supply, which, in turn, tends to moderate prices. Sometimes prices even go lower. If demand remains strong, inventory drops again until prices start going up, followed by more listings and the cycle starts over. Be aware that if demand is not strong enough, prices can plateau at one level for a long time - often for years - even though sales continue.

Don’t get me wrong, with present market conditions, I do expect prices to increase. In most segments of the market, they already have. But the price increases will probably come in cycles over time. One wild card that could result in extreme appreciation is if speculators start buying in large numbers, overwhelming the numbers of potential sellers. Anything is possible but I think the restraints from the lenders and appraisers will keep this from happening. 

So, for you buyers, there are still plenty of good deals out there but anticipate higher prices going forward. This is not a bad thing. Wouldn’t you rather buy in a market where prices are going up than one in which they are not? Of course, interest rates are still low and a very strong rental season is right around the corner (for you investors) as added incentives.

For sellers, it’s a great time to sell - lots of eager buyers out there. And there’s a good chance, depending on where you own, that your property can be sold quickly at a price higher than it could’ve been not so long ago. Keep in mind, however, that prices in our oceanfront resort condo market typically do not go up in a straight line so tomorrow might not be a better time to sell than today. The cycle I described earlier also varies from building to building and even floor plan to floor plan. If you have been waiting for a while to sell, now might be a good time. Please contact me and we can go over your particular situation.


Other news:

There’s been a late surge in Covid cases, probably caused by people dropping precautions before they get vaccinated. Although she was one of the cautious ones, my wife came down with Covid two days before her scheduled vaccination. She’s now on day 10 of her quarantine and doing well. She should be out and about in the next day or two. Vaccinations are moving rapidly, and, in an acceleration of the original SC schedule, anyone 16 years old or older will be able to get a vaccination in the coming weeks.

All reports indicate that the upcoming rental season will be exceptionally strong. The resorts have been packed and advance reservations are pouring in.

Southwest Airlines has announced that it will start flying to Myrtle Beach for the first time (on a seasonal basis). United Airlines has also announced a number of new flights.

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!

Beach Pro Reviews

Here are some new reviews published in Zillow. 


  • Have used Gene and his team for two transactions. He assisted me in the purchase of a property as well as the sale of another property. I would recommend him and his team for your real estate needs! Bob. Caribbean. Myrtle Beach.

  • Gene's knowledge the Myrtle Beach market is impeccable. All documentation that conveyed was flawless and the closing was completed with ease. Will certainly utilize Gene Carter for future real estate investment opportunities. Benji. Dunes Village. 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 100 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


Below is a link to a detailed report on the current state of our local real estate market complete with statistics for just about anything imaginable. Please keep in mind that these statistics cover a broad range of properties and that particular areas or developments may behave quite differently.  

As always please contact me if I can be of service in any way.

See link below to interpret terms used in this report.


Grand Strand Market Report - February 2021

Best Buys


The following current listings are exceptionally well-priced and represent great values. The spreadsheets are sorted by price. These are live links to listing details and they will change according to changes in the MLS (Pending, Sold, etc.). The listing details are in the same order as the spreadsheets. Please call me directly if you find something of interest to you.
  


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
If you are considering buying or listing any property on the Grand Strand, or if I can be of assistance in any other way, please contact me. Also, please feel free to forward this newsletter to friends or acquaintances and of course I will be happy to add them to my email list.

Finally, please let me know if you are going to be in the area and would like to get together.

See you at the beach!




Gene Carter
Beach Pro Team
Cell Phone:  843-455-4785

The material provided is for informational and educational purposes only and sometimes contains current or forward-looking statements on real estate market conditions, and should not be construed as legal, investment and/or real estate advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors, and is not necessarily the opinion of RE/MAX Southern Shores or its agents.