Strong home sales in Myrtle Beach area have market smiling

The real estate market improved in the first half of 2010, according to Realtors and experts, but with continued price drops there is still a ways to go before the market reaches stability.

Single-family home sales grew 32 percent in the first half of 2010 when compared with the same period in 2009, and condo sales rose 38 percent, according to statistics gathered from the Multiple Listing Service.

The median price - the price at which half sold for less and half sold for more - of single-family homes dropped 5 percent to $170,000 in the first half of this year compared with the same period last year. The median price of condos fell 6 percent to $122,000 in the first half of this year.

"It was better than we expected. There's so much uncertainty out there, I think [the market] is doing really well," said Marvin Heyd, broker-in-charge at Prudential Burroughs & Chapin Realty. "I think the rest of this year will follow the same path."

Heyd said there are great opportunities for buyers with the low prices available and with interest rates at record-low levels. The next several months should have continued growth in sales and - after a traditional seasonal winter dip in sales - the market should be stronger in the first part of 2011, assuming there are no additional big problems in the economy, he said.

Heyd said the market should maintain a similar level of sales because people who had been waiting to purchase will continue to come and buy property.

Sales in June were strong, with a 40 percent increase in single-family home sales and an 18 percent increase in condo sales, when compared with June 2009, according to the data. But prices, which seemed to be stabilizing with small drops or no change in April and May, dropped by a greater margin. Median single family home prices dropped 10 percent in June, and condo prices fell 4 percent.

"I think that is because we're still dealing with foreclosures," said Tom Maeser, a real estate analyst for the Coastal Carolinas Association of Realtors. "As long as you have foreclosures in the mix you're going to have an impact on pricing."

Foreclosures and short sales are sold at discounted prices, which drives down the real estate values overall. The drop in prices isn't great for property owners trying to sell but for some buyers it can mean an unexpected opportunity.

Pat Higgins, 69, a retiree who moved into a two-bedroom house in the Forestbrook area this week, said the low prices made it possible for her to buy the property.

"I came down here with the intention of renting because I rented my whole life," she said. "I thought it would never be possible for me to own a house and here I am. ... I was able to buy for about the same price I could rent for and I thought why not."

Higgins, who moved from New Jersey, said she was able to negotiate the price of her house down more than $5,000 to $117,750. It took a little bit of time for her loan to go through, but, all in all, the process of buying her house moved through smoothly.

"It's absolutely beautiful and perfect for me," she said.

Alex Holbert, the broker-in charge at Remax Town & Country, said that while it is possible prices will continue to fall a bit, the market still looks to be stabilizing.

"I feel we've got to be close to the bottom, but gosh until we sell down the inventory that's out there, it puts pressure on the existing real estate market," he said.

It may take a couple of years to get through all of the short sales and foreclosures, but once those distressed properties are off the market there will be improvement, Holbert said.

Holbert said that while prices may still drop a bit and the interest rate may fluctuate, the second half of the year should be steady and make way to gains in 2011. "I'm very optimistic about things even if we have not hit the bottom," he said. "The signs I've seen in the first half of the year show me at halftime that things are looking good for the second half."

One positive sign is that the best properties, with the great locations and amenities, are selling quickly, said Radha Herring, the broker-in-charge of the Watermark Real Estate Group.

Herring said that her company has seen a definite improvement in the market in 2010 from last year and that June was also a strong month.

"We're very positive about today's marketplace. I consider this to be the most opportunistic market we've seen in 30 to 40 years," she said. "It's bringing the buyers who have been sitting on the sidelines."

One trend Herring has seen, she said, is that buyers are making decisions more quickly.

"I think it's because they've been studying the market for so long on their own. ... When they finally do come to Myrtle Beach, they're armed with a lot of information so they're able to make a confident decision, a quick decision."

Herring, who has been seeing a large number of buyers paying cash, said that the percentage declined a bit in June, in part because the single-family-home buyers were more likely to use financing.

In June, about 44 percent of buyers paid cash, 44 percent used conventional financing and 12 percent got loans through the FHA and VA.

Maeser said he is not sure how long the market can maintain such a high level of cash sales and the high number is indicative of the good prices.

"It's blowing my mind it's lasted this long," he said. "If [the market] didn't have those cash sales we would be hurting. As long as the cash sales can hold up, that's what's saving us basically."

The high level of cash sales and continued large number of distressed properties - such as foreclosures and short sales - are driving sales, which is reducing the number of properties available.

The number of condos listed on the market in the first half of the year was down 14 percent from 2009 and the number of condo sales was even with last year.

The reduction of properties available is a good thing because it helps control prices in the market, Maeser said. Eventually as the number of properties available drops there will be increased competition which would push prices up.

"We're seeing little bits and pieces of recovery," Maeser said.

Chuck Houseman, a Realtor with The Litchfield Co., said that the real estate market on the south end of the Grand Strand has done well in the first half of this year and seems positioned to continue improving.

He said good marketing and a stream of buyers who have wanted to move to the south end of the Grand Strand for a while have brought in steady sales.

The south end of the Grand Strand has seen fewer foreclosures than other areas and that is a benefit to the property owners and sellers, Houseman said.

"I would like to think that being guardedly optimistic, we're going to see improvement. Slow, baby steps perhaps, but improvement nonetheless," he said.