New homes crop up as building permits rise on the Strand

Eager buyers are no longer falling through their doors, but builders along the Grand Strand say that the first half of 2010 brought an increase in business after the dramatic drop of the past few years.

The number of building permits issued for residential new construction in Horry and Georgetown counties in the first half of the year is up about 36 percent from the same period in 2009, according to Market Opportunity Research Enterprises, a company that tracks the housing market. But while the Strand as a whole showed improvement, Georgetown County issued fewer permits in the first half of the year.

"We're not getting necessarily run over by folks, but we still are working, which is good," said Fred Coyne, president of the Horry Georgetown Home Builders Association.

Builders had grown used to building as many houses as they could, he said, so when the slowdown hit, it surprised builders. Now builders have been able to re-evaluate and decide what they have to do to move ahead, Coyne said.

"Everybody's kind of readjusted to the way, and the amount, of business that is out there," he said.

He said the first half of the year has left builders feeling better and the amount of tourist traffic this summer is encouraging because those visitors are people who might one day buy a house.

"We're still inching forward. I think you're going to see some up and down," he said, adding that "things are definitely looking up."

David Jacobs, the Horry County director of code enforcement, said that after the number of permits issued for single-family houses dropped nearly 50 percent from 2008 to 2009, the rebound this year was definitely welcome.

Despite the overall improvements from last year, the number of permit requests has slowed in the past few weeks, he said. Companies that may have been getting 20 permits a month a few years ago are now applying for five or 10, Jacobs said, and fewer companies are building speculative homes.

"I think it's going to pick up ... with a little break here and there," he said.

While Horry County has seen considerable increases in construction, Georgetown County is still seeing a drop in building activity.

"I can't say anything with much enthusiasm," said Boyd Johnson, Georgetown County's director of planning and code enforcement. "Things seem to have flattened out, and I don't have any reason to be confident that we're going to see any change in the near future. Certainly at some point we are, but I don't know when that's going to be."

The number of permits issued is down 57 percent from last year, which was down almost 24 percent from 2008, he said.

"We've had certainly a very clear steady decline since 2005 ... and I don't see anything changing," Johnson said.

Buddy Hucks, an appraiser who tracks the real estate market, said Horry County has a broader diversity of real estate products including properties for retirees, permanent residents, second-home buyers and investors. That variety explains why Horry County has seen a pickup in building while Georgetown County continues to struggle, he said.

In the spring, building picked up a little because of the home buyer tax credit but has leveled off since the government incentive expired, Johnson said.

While the number of permits issued hasn't started to rebound, the department is seeing an influx of developers coming in to discuss projects.

"I guess you'd say [they're] exploring ways to kick-start their progress," Johnson said.

Some of the changes builders are making include reducing prices, changing the concept to more easily qualify for financing and building smaller houses, he said. "The overwhelming trend is smaller homes," said Ben Guyton, the Pulte Homes general sales manager for the Myrtle Beach market. "Most people looking for homes want something simple that serves the need for them and the occasional guest."

Pulte Homes Inc. bought Centex Corp. last year and the merged company has brought a wider variety of floor plans into the market.

"We've actually had a very exciting first half of the year because of our combination of Pulte Homes and Centex," Guyton said. "It's created a lot of opportunity for us in the Myrtle Beach area."

The company is seeing more buyers coming down from northern states, where they are starting to be able to sell their properties and can now move to the Grand Strand, he said.

The company closely analyzes the market data and has made price adjustments over time, Guyton said.

Most real estate sales are of properties that cost less than $200,000, Hucks said, so builders are trying to keep prices low to compete.

Builders "will tell you that price will sell today on new product especially," he said.

Berkley White, the owner of Classic Home Building & Design, said his company has had to reduce prices in order to stay competitive. Like many other companies, Classic is cutting expenses and working with lower profit margins in order to stay in business, he said.

Business is about even with last year, but the number of potential buyers calling and stopping in has picked up, White said.

"We've had a good year considering the economic times that we're in," he said. "We're excited about the business that we've got and the potential."

White said buyers are more knowledgeable, are shopping around more and trying to get the most for their money.

"They look at the comps, they're very astute, they're very smart, with all the information that is out there," he said.

White said the second half of the year and 2011 should bring more business and that as the ability to get financing improves, the attitudes of builders and buyers should improve as well.

"We're excited about what the future holds because the more people we talk to, the more contracts that we sign and the more houses we're building," he said. "Everyone wants to buy it at the absolute bottom, when people start to see things go up there's a lot of people that will buy."

Susan Martin, the director of sales and marketing for Lennar Corp. in Myrtle Beach, said sales have improved at the local Lennar communities this year.

We've had a really good first half of the year, and we're looking forward to an even better second half," she said.

Martin said buyers are expecting more features without having to pay extra. She said buyers are willing to purchase a second home now and retire later because of low prices.

"Those people have come up and said we're not that leery anymore," she said. "[We're] seeing the whole economy switching and getting better, opening up people to buy and not wait."