Property sales rise, prices drop third quarter in Myrtle Beach area

jfrost@thesunnews.comOctober 24, 2012 

— Grand Strand real estate sales jumped during the third quarter, a reflection of how sales continue to increase, particularly for single-family homes, and an indication that people are still interested in relocating to the area, according to local Realtors.

Single-family home sales rose 17 percent July through September compared to the same period last year, according to the Multiple Listing Service. Condo sales rose 10 percent July through September compared to the same three months last year, according to the MLS. Cash sales of houses and condos make up 46 percent of all sales, which is down from 48 percent last year, but still holding strong, said Tom Maeser, a real estate analyst for the Coastal Carolinas Association of Realtors.

“A lot of positive things are happening,” he said. “People still want to buy here. Investors are finding cash to continue to buy, and new construction is up.”

Jamie Broadhurst, president of Century 21 Broadhurst in Myrtle Beach, said new home building is competitively-priced with resells, which is a good thing.

“There’s much stronger competition in new builds than resells,” Broadhurst said. “Our numbers are in line and above what we did last year third quarter.”

For Coldwell Banker Chicora Real Estate in Garden City Beach, the number of contracts written in the third quarter is up, Broker/Manager Dave Alexander said.

“October is also turning out to be a strong sales month,” Alexander said in an email. “It’s nice to see a rebound from our low period in 2009 and 2010. Increased sale is an indication that the Grand Strand is still a very desirable location for people to relocate to as well as make an investment in a vacation home.”

In September, single-family home sales along the Grand Strand increased 8 percent compared to the same month last year, according to the MLS. Condo sales declined 3 percent in September compared to the same month last year.

The decline in condo sales for September is because this is a much heavier investor market, Maeser said.

“Typically, activity wasn’t that strong this September versus last September,” he said. “Either there were not enough good products there to purchase, which doesn’t mean there won’t be next month, or there was a less number of people that visited in September versus last September. It is not an indication of our long-term situation. It’s just an abnormal month. I think we see a slow down just before an election. A lot of investors here are waiting to see with the election what happens with capital gains [tax].”

While the number of real estate sales increased in the third quarter, prices have dropped and continue to do so for condos because of foreclosures and short sales, officials said.

The median price - the price at which half sold for more and half sold for less- of condos declined 8 percent, to $100,000, during the third quarter when compared to the third quarter of 2011, according to the MLS. In September, the median price of condos dropped 6 percent, to $105,000, when compared to the same month last year.

The median price of a single-family home was $163,000 in the third quarter, up 1 percent from the same time last year, according to the MLS. In September, the median price of a single-family home was $154,000, down 6 percent from the same month last year.

“Condo financing is still a challenge,” Alexander said in his email. “Financing for single family homes is easier to get. For some time now two-third of our condo sales have been cash sales and only one-third of our single family home sales have been for cash. Also, local builders are actively building new single family homes which are attractively priced and selling quite well. There are very few new condos currently being built to help boost the condo median price number.”

Maeser said prices are being driven down by foreclosures and short sales. September, in particular, Broadhurst said, was a little bit off as far as pricing because the area is dealing with a number of short sales. That is a high percentage of the market right now, said Broadhurst, whose company also had a little dip in prices in September.

Maser said “there is more activity in foreclosures and short sales in condos because of vacation rentals, which is why we are seeing the difference between single-family and condos.

“We have builders coming back into the market and new homes typically run higher in price, which helped stabilize the residential side, but foreclosures and short sales are still impacting the condo side,” Maeser said. “If we get rid of foreclosures and short sales and have regulations not so extreme against the banks so they are able to lend money, especially to investors, we would see a recovery in the market.”

Several local Realtors are waiting for what happens in the November presidential election, which they say would have a significant impact on the real estate market for the rest of the year.

“I expect the rest of 2012 to show strong sales,” Alexander said. “Interest rates for new mortgages cannot get any better, in fact the only significant movement we will see will be up. Once we get by the election, buyers will know in what direction the government wants to take our country and will feel better about making a decision to make a purchase. I see an increase in sales and gradual increase in prices in our future. It will be a slow growth, but a positive one.”

Contact JANELLE FROST at 443-2404.

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