After several months of limited declines in median prices on the Grand Strand, sale prices dropped by double digits in January, indicating that the market may still have further to fall before it turns around.
The median price of single-family homes sold in January was $155,290, down 14 percent from the same month in 2010. The median price of condos was down 18 percent from January 2010, to $105,950, according to data from the Multiple Listing Service released Thursday.
The ongoing foreclosure crisis is having a dramatic impact on the market and continues to drive prices down, said Tom Maeser, a real estate analyst with the Coastal Carolinas Association of Realtors.
"This is what happens in a foreclosure environment, and to be honest with you, this has lasted a lot longer than I thought it would. I thought we'd start seeing some stability now," Maeser said.
The proportion of distressed properties, foreclosures and short sales sold in January was well above the levels seen through the past year and may help explain the price drop, he said.
About 32 percent of all single-family homes sold were distressed properties, and about 46 percent of all condos were distressed properties, according to the MLS. Over the past year, about 26 percent of single-family homes and 37 percent of condos sold were distressed properties.
With prices having fallen so low, there isn't much further to go, Maeser said. The median January condo price peaked in 2007 at $218,000 and has fallen 51 percent since then. Mediansingle-family home prices peaked in 2008 at $209,945 and have dropped 26 percent, according the MLS.
"To me, it's getting dangerously low on pricing," he said.
Greg Sisson, the vice president of Hoffman Homes, a division of The Hoffman Group, said it is clear that the real estate market has not yet hit a bottom.
"I don't know if I would look at one month and hit the panic button," he said, but added it "is definitely a little surprising that the drops are that big."
Sisson said that lower-priced condos are closer to reaching a bottom, but the higher-priced properties are still losing value. Most condos are a resort-type property, which will naturally take longer to come back as the economy recovers because it is a discretionary purchase.
As the prices drop, it could mean a pickup in sales as buyers choose to take advantage of the low prices available, he said.
Single-family home sales increased 4 percent, and condo sales dropped 10 percent in January, when compared with the same month last year, according to the MLS.
Penny Boling, the broker-in-charge of Century 21 Boling & Associates, said the price drops make it a great time for buyers, if they can find financing, which is still challenging.
About 48 percent of all properties bought in January were paid for in cash, with 43 percent paid for with conventional financing and the remaining 9 percent financed through programs through agencies like the Federal Housing Administration or Veterans Affairs.
Those cash buyers are helping to keep the market going, Boling said, because financing is especially limited on oceanfront and investment condos, which tend to have the most cash buyers.
Despite the rocky start, Boling said she isn't concerned about the year overall, which she expects will improve.
"I think we are going to have a boom year because of the activity," she said. "If someone doesn't sell these things and clean things up, we'll be sitting in the mud a long time."
Marvin Heyd, the owner of Prudential Myrtle Beach Real Estate, agreed that the year will pick up.
"We can't be concerned because the only way we've got to go is back up," he said. "A lot of people disagree, but I still think we've hit our bottom."
He said that there has already been a pickup in activity in February with more people calling, walking in and searching for information online, a good indication of future business.
Heyd said that some Realtors are no longer taking listings when an owner wants an unreasonable price, and some homeowners have simply chosen to wait to sell, which, along with strong sales last year, has reduced the supply of properties.
There were about 1,500 fewer properties on the market in January than there were the same month last year, according to the MLS.
Maeser said the inventory shouldn't drop much lower because having options creates competition in the market.
"So much of our inventory has become foreclosures, that is definitely where the market is, and the seller that doesn't have to sell has probably taken their home off the market," he said.
Despite challenges in the market, once it begins to recover, it will come back faster than most other areas, Maeser said.
"I think there's light at the end of the tunnel," he said, "it's just that the tunnel keeps getting longer and longer."
Contact ADVA SALDINGER at 626-0317 or follow her at Twitter.com/TSN_ASaldinger.