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Dear Gene Carter Team,
Summary
This month, I’ll cover the just-mailed 2022 real estate tax bills, current market conditions, an unexpected decrease in oceanfront condo inventory, interest rates, and Hurricane Ian.
Real Estate Tax Bills: Tax bills for 2022 were scheduled to be sent out October 1. Your tax bill amount is based on the county assessor’s estimate of “Fair Market Value” as of December 31 of the previous year. If you want to see if you think it’s really “fair”, our Closed Sales Histories might come in handy. We have all of the closed sales (complete with details) from 2009 to 2021 laid out on spreadsheets for over 190 condo developments. Here is an example, Link to Anderson Ocean Club 2021 Closed Sales List. To request a spreadsheet like this for any development of interest, just visit www.beachproteam and sign up or click on the link below.
BeachProTeam.com/nl-ClosedSales
Keep in mind that your tax bill is not based on the market value today, which is almost certainly way more than it was in December of last year.
If you want to find out your approximate market value now, please contact me.
Market Conditions: There’s a perception among some of the potential buyers we talk to that the market has tanked and prices are falling rapidly as desperate buyers accept any offers presented to them. So far at least, that’s not the case. After selling 8 of my listings in August, I sold 8 more in September - and the prices were in line with recent closed sales, no desperation sales.
Prices are no longer generally increasing, buyers are negotiating more, and listings are taking a while to sell.
Sellers - keep in mind that even though prices are not increasing as they were, they are still far higher than they have been in 15 years.
Oceanfront Condo Inventory Decreasing Again: Unexpectedly, the inventory of oceanfront condo listings has actually started decreasing again. There are now 466 active oceanfront condo listings, down from 504 in August and 538 in July. Meanwhile, the number of active condo listings off the beach continues to climb with 790 now vs. 734 in August and 664 in July. (See chart in newsletter below).
There are some buildings and segments of the market where inventory is increasing rapidly and others where listings remain very scarce. Condos off the beach and small condos in oceanfront buildings are plentiful now so sellers and buyers are getting more competitive - resulting in lower prices and longer “days on market” for listings not reasonably priced.
The larger oceanfront condos are still in short supply and there has so far been little or no reduction in market values for many of these, particularly the non-condotels in North Myrtle Beach. I said “so far” because the factors that typically result in lower prices are gathering in force.
If you are considering selling and want to take advantage of top-of-the-market prices, I wouldn’t wait. There are uncertainties ahead and I think it is likely that prices are as high as they are going to get for a while. The skyrocketing interest rates are definitely having an effect. Demand is declining so, even if inventory stays low for certain types of properties, prices can still decrease. Also, for rental properties, the offseason is coming so now is the best time to sell.
Owners, please contact me if you would like to discuss your property’s potential selling price.
Interest Rates: The Fed has been using its toolbox to force higher rates in an attempt to cool off inflation. As a result, residential sales in our area are down. It's affecting resort condo sales as well but we’ve had so many cash buyers (most of whom are really 1031 exchange buyers) that it’s been less noticeable. However, if the high interest rates start preventing them from selling their properties in other parts of the country, that will reduce the number of cash buyers for us.
Condotel rates, which were twice as high as conventional rates a year ago (because conventional rates were at ridiculously low levels) are now very similar to conventional rates. Regardless of the financing type, most people are of the opinion that rates will come down sometime in the next several years so hopefully current buyers/borrowers can refinance at lower rates in a few years.
Hurricane Ian: After producing massive destruction in Cuba and Florida, the storm delivered a relatively mild strike to the Grand Strand. The winds on the coast topped out at about 60 MPH, well below hurricane force (75 MPH). However, the positioning of the storm resulted in a powerful storm surge which flooded oceanfront pools and roads and caused extensive damage to the dunes.
Because of the counterclockwise rotation of a hurricane, most of the severe damage from wind and especially tidal surge is focused on the front/right of the center. When it hit the Grand Strand it was moving west so the damage was mainly from its center around Pawleys Island to the north through North Myrtle Beach.
I spent the entire day after the storm checking out all the buildings in which I had listings. There were a few elevators temporarily out of service, some beach erosion and flattened dunes, and a few pools shut down for cleaning but no severe damage to any resorts(see pictures in newsletter below).
What was really striking as I drove up and down the Grand Strand the day after the storm was just how busy it was! Because of the sudden turn, there were none of the usual precautionary evacuations. The area was packed! Many of the buildings I checked had their pools operational by midmorning the day after and some kept checking in guests even as the winds were raging.
Hurricanes are a fact of life for anyone living or owning property on the eastern coast of the United States, from Texas to Maine. On the Grand Strand, it seems that we have a weather “event” of some sort about once every other year on average. Most cause minor damage like Ian did but Hurricane Hugo in 1989 and Hazel in 1954 both caused extensive damage.
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