Myrtle Beach Housing Sales Creep Up


Housing sales creep up as prices slip
Analysts say markdowns will bring market back in balance

March 13, 2008

By Jessica Foster –

Home prices on the Grand Strand were down for the second month in a row, but sales have inched up, according to a February Realtors association report released this week.

The lower prices are what the area needs to jump-start real estate sales, help eat up excess inventory and stabilize the market, analysts said.

Until recently, steady home prices were considered the silver lining for an otherwise lackluster real estate market.

But now the oversupply of homes is forcing sellers to be competitive in their pricing. As a result, condo prices have fallen three of the past four months and single-family house prices have dropped since December.

“People are willing to take more of a cut,” said Carolyn Raines-Harbin, a Realtor with Surfside Realty Co. “If you’ve got someone making an offer, do you really want to hold out for another $10,000?”

The median price for a single-family house sold in February was $193,245, down from $198,000 in January. Condos fell from $166,500 to $155,000. That brings single-family house prices down 10 percent from those sold in February 2007 and condo prices down 29 percent. The median price is where half sell for more and half sell for less.

“The market is starting to show decreases in pricing which we weren’t necessarily seeing for the overall market,” said Tom Maeser, market analyst for the Coastal Carolinas Association of Realtors. “The good news is the sellers are typically getting more realistic. … All of this has to happen before you start seeing a good recovery.”

The declines are evident marketwide – even million-dollar oceanfront condos are going into foreclosure and being sold for less – but the steepest price drops are in highly concentrated condo complexes where more than 10 percent of the units are listed, Maeser said.

“Right now where I’m seeing the most declines is in condos in areas where there are a lot of listings in that project,” Maeser said. “Those that have just a whole bunch of condos in it and they were all built during the growth time, they’re probably sitting on a lot of inventory right now.”

The multiple listing service shows that many Myrtle Beach condos are selling with price cuts: One Myrtle Beach condo at the Patricia Grand recently sold for $138,500, down from the $146,000 asking price. Another on Lake Arrowhead Road sold for $180,000, down from the $189,500 asking price.

Foreclosures also are bringing down prices, although those don’t show up in the multiple listing service report unless they’re sold through a real estate company.

A Mortgage Bankers Association’s report found 1.86 percent of S.C. mortgages in the fourth quarter of 2007 were in foreclosure, up from 1.68 percent in the third quarter and reaching its highest rate in more than two years.

On the Grand Strand and in Brunswick County, N.C., there were 50 foreclosure filings – default notices, auction sales notices and bank repossessions – in January, up from 32 in January 2007 but down from 79 in December 2007, according to RealtyTrac.

“I think the foreclosures play a role in the initial phase of the recovery period that we’re in because they’re distressed sales. They’re problems, and the people unfortunately have to sell,” Maeser said. “As a result of that, you’ve got what I call bottom feeders: people that come out and just can’t wait to be picking up these distressed sales.”

The lower prices and cheap foreclosure properties are luring some buyers back into the market. The number of house and condo sales, though still fewer than this time last year, went up from 327 in January to 444 in February.

“I’m starting to see more investors,” said Jeff Casterline, a Realtor with RE/MAX Southern Lifestyles.

“I think buyers are starting to return to the area because there are a lot of properties that have good value right now.”

Raines-Harbin said her sales picked up at the start of the year, but she thinks there are many more potential buyers sitting on the sidelines, spooked by the recent economic downturn.

“People are afraid, and it’s not that they’re afraid of real estate. I think they’re afraid of everything in general right now,” Raines-Harbin said. “Everyone feels like they’re walking on eggshells.”

February’s uptick in sales is a good sign, said Coastal Carolina University research economist Don Schunk. He expects sales to remain fewer than last year, but to stay steady or increase slightly for the first six months of this year.

Prices will be one of the last things to turn around, he said. When they do start to rise, he doesn’t expect them to skyrocket as they did during the hot real estate market of 2005 and 2006.

“I think a lot of people in terms of builders, mortgage lenders and borrowers have learned a lot of lessons in the last year, and that’s going to lead to a more realistic market over the next few years as opposed to the frenzy we saw a few years ago.”
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