Grand Strand Real Estate News - October 2022

October 2022

Volume 2022 Issue 10

Dear Gene Carter Team,

This month we’ll take a look at year-to-date vacation rental incomes for 2022 versus 2021, the Myrtle Beach area’s misleadingly high crime data, and the current market report.

Market Report 

Prices for most segments of the condo market aren’t changing much but activity of all types is slowing down – new contracts, closed sales, and even listings. At this time, prices, especially for oceanfront condos with two bedrooms or more, are holding at or near the peak prices from the recent run-up. Even though the number of buyers has decreased, so far, the inventory remains low as well.

According to the available stats and reports from other agents I have talked to, the residential home market is experiencing the same trends as condos (See tables below).

My team is continuing to see more condo buyers than might be expected in light of the high interest rates.  Most are not financing, however, so the rates don’t matter to them anyway. An extremely high percentage of our buyers are paying with “cash” obtained from 1031 tax-deferred exchanges. Of our last nine buyers (buyers of my listings and Teresa’s buyers), five were 1031 purchasers.

There are now 464 active oceanfront condo listings, down very slightly from 466 last month. There are 794 active condo listings off the beach, up very slightly from 790 last month. (See graph in body of newsletter).

There are 3 charts included in the body of the newsletter comparing local real estate stats for September and October for single family homes, all condos/townhouses and oceanfront condos. All show similar trends - very little month-to-month change in average price but the new listings, pending sales, closed sales and total sales volume all dropped. (See charts)

Sellers - It’s still a great time to sell with prices at or close to the top for this market cycle. Higher prices are unlikely any time soon but there’s a real chance they could “correct” after rapid 50% appreciation so, if you want to sell, sooner is better than later. 

This is perfect timing to avoid carrying costs during the offseason. Also, it is still possible to sell and close before the end of the year but time is running out.

Please contact me if you would like an evaluation of your property’s current market value.

Buyers - There’s more inventory from which to choose now than there was during the craziness earlier in the year and sellers are actually negotiating again. Prices in our area are still low compared to comparable properties in other coastal resort areas around the country. For investors, rental incomes have remained high in 2022.

Please contact me or Teressa if you are interested in purchasing anywhere on the Grand Strand.

Grand Strand Vacation Rental Incomes

2020: For quite a few years prior to 2020, vacation rental incomes in general were pretty flat. During this Covid-dominated year, incomes plummeted 30% to 60% from those of previous years.

2021: Vacation rental incomes rebounded and then some. 30% to 50% increases (over pre-covid numbers) were common. This was a significant contributing factor to the rapid increase in prices.

2022: I was worried that the huge across-the-board increase in vacation rental income in 2021 was a post-Covid anomaly but it was not. Through September the 2022 incomes year-to-date are tracking very close to the record-breaking 2021 incomes.

This is great news! First, this means the owners are continuing to make more money from their investments. It also has helped prices remain high because, for many oceanfront and resort condos (condotels in particular), there is a direct correlation between rental income and value/price.

Rentals remain strong even in early November. I’ve had trouble showing my listings lately because they never seem to be vacant.

Misleading Myrtle Beach Crime Statistics

The seasonal and transient nature of our population skews the local crime statistics. Potential buyers and visitors read online reports and make decisions based on these. A recent article in our local newspaper addressed this and published some interesting numbers to illustrate.

Believe it or not, in 2021 the official population of Myrtle Beach was only 36,543. This resulted in a violent crime rate of 12.34 per every 1,000 people per FBI statistics.

However, if people who commute, work, visit or attend events are included, the city’s average daily population swells to 155,000 —leading to a violent crime rate of 2.84 per 1,000 people. This more representative crime rate would make Myrtle Beach one of the safer cities in the country. 

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!

This month we’ll take a look at year-to-date vacation rental incomes for 2022 versus 2021, the Myrtle Beach area’s misleadingly high crime data, and the current market report.

Market Report

Prices for most segments of the condo market aren’t changing much but activity of all types is slowing down – new contracts, closed sales, and even listings. Part of this could be seasonal although we usually don’t see a big lull until after Thanksgiving. Causes could be midterm elections, uncertainty over inflation, high interest rates and apprehension about a possible recession.

At this time, prices, especially for oceanfront condos with two bedrooms or more, are holding at or near the peak prices from the recent run-up. I think this is because, even though the number of buyers has decreased, so far, the inventory remains low as well. So the relatively few buyers have relatively few listings from which to choose, keeping the supply/demand ratio pretty constant. It remains a good time to sell. 

According to the available stats and reports from other agents I have talked to, the residential home market is experiencing the same trends as condos (See tables below).

One interesting observation is that my team is continuing to see more condo buyers than might be expected in light of the high interest rates.  Most are not financing, however, so the rates don’t matter to them anyway. An extremely high percentage of our buyers are paying with “cash” obtained from 1031 tax-deferred exchanges. They sell a property somewhere else in the country and then buy their replacement property on the Grand Strand. Once the other property closes, they only have 45 days to identify the property they are going to purchase so they can’t wait for lower interest rates or for prices to come down. Of our last nine buyers (buyers of my listings and Teresa’s buyers), five were 1031 purchasers.

Below is the graph I’ve been updating each month showing the active listings in oceanfront buildings and non-oceanfront buildings. The number of active listings in each category has barely changed since last month. There are now 464 active oceanfront condo listings, down very slightly from 466 last month. There are 794 active condo listings off the beach, up very slightly from 790 last month.

The following chart shows various statistical metrics for single family homes in our market. This compares September with October. As you can see, there is very little month-to-month change in average price but the new listings, pending sales, closed sales and total sales volume all dropped. By the way, these numbers come from InfoSparks, a source of statistical analyses available through our MLS. I’m not sure of their methodology for a few of these.

This chart shows the same stats for condos and townhouses. This includes all condos, including residential properties as well as oceanfront and resort condos. The pattern is similar - minimal average price changes but big drops in new listings, closed sales and total sales volume. These numbers also came from InfoSparks.

This chart shows most of the same stats specifically for oceanfront condos. Very similar pattern with small average price changes but fewer new listings, closed sales and lower total sales volume.

Sellers - It’s still a great time to sell with prices at or close to the top for this market cycle. I would be very surprised to see higher prices in the near future but there’s a real chance they could “correct” from the 50% appreciation we experienced in just a few months for most resorts. If you are thinking of selling, sooner is better than later. 

There are still buyers out there, even with the high interest rates and economic uncertainties. 

This is perfect timing to avoid carrying costs during the offseason. 

It is still possible to sell and close before the end of the year (if that is important) but time is running out.

Please contact me if you would like an evaluation of your property’s current market value.

Buyers - There’s more inventory from which to choose now than there was during the craziness earlier in the year and sellers are actually negotiating again. 

Prices in our area are still low compared to comparable properties in other coastal resort areas around the country. 

For investors, rental incomes have remained high in 2022, matching or exceeding 2021’s record-breaking numbers (See below). 

Please contact me or Teressa if you are interested in purchasing anywhere on the Grand Strand.

Grand Strand Vacation Rental Incomes

2020: For quite a few years prior to 2020, vacation rental incomes in general were pretty flat. In 2020, Covid forced the complete shutdown of all short-term rentals in our area for several peak months. This was followed by a very weak travel year in general. Incomes plummeted 30% to 60% from those of previous years.

2021: Vacation rental incomes rebounded and then some. 30% to 50% increases (over pre-covid numbers) were common. The occupancy was somewhat better but the big increases seemed to mainly come from higher weekly and nightly fees that owners and rental companies were able to charge and which vacationers were willing to pay. This was a significant contributing factor to the rapid increase in prices. If the income for a condo increases 40%, the return typically increases 50% to 60%, in line with the price increases we saw for most investment style condos.

2022: I have to admit that I was worried that the huge across-the-board increase in vacation rental income in 2021 was an anomaly. Was it just pent up beach fever after being locked down with Covid? Was it because the Grand Strand area was one of the first to loosen up the mask rules? Was it because everybody was flush with cash from the stimulus packages?

Apparently it was not an anomaly. The 2022 incomes year-to-date are tracking very close to the 2021 incomes. Once the September statements were sent out, I checked a couple of dozen properties and, on average, the incomes have been about the same as in 2021. A few were as much as 10% or 15% higher and a few were as much as 10% to 15% lower but overall the incomes are very similar to those from 2021. 

This is great news!. First, this means the owners are continuing to make more money from their investments. It also has helped prices remain high because, for many oceanfront and resort condos (condotels in particular), there is a direct correlation between rental income and value/price.

Rentals remain strong even in early November. I’ve had trouble showing my listings lately because they never seem to be vacant.

Misleading Myrtle Beach Crime Statistics

On several occasions through the years, buyer clients of mine have backed out of purchases or decided not to move into our area after checking the area’s crime stats online. Unfortunately, the seasonal and transient nature of our population skews the local crime statistics. A recent article in our local newspaper addressed this and published some interesting numbers to illustrate.

Believe it or not, in 2021 the official population of Myrtle Beach was only 36,543. This resulted in a violent crime rate of 12.34 per every 1,000 people per FBI statistics.

However, if people who commute, work, visit or attend events are included, the city’s average daily population swells to 155,000 —leading to a violent crime rate of 2.84 per 1,000 people. This more representative crime rate would make Myrtle Beach one of the safer cities in the country. 

The article also states that crime rates have been reduced nearly 25 percent since 2017, a result of more aggressive policing methods and stronger community partnerships.

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 a new review published in Zillow. 

• Very good. This is the 2nd transaction with Gene and everything from listing to marketing to sale , inspection and close went well. We would use them again for both buying and selling a property in Myrtle Beach. Karl and Dawn. Sea Watch. 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 - September 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

Gene Carter

Beach Pro Team

Cell Phone:  843-455-4785

Email: GeneCarter@BeachProTeam.com

Website:  www.BeachProTeam.com