Better real estate market means scattered tight inventories

sjones@thesunnews.comMay 21, 2013 

— There was a time not that long ago when Grand Strand Realtors were pleading for a lower inventory of foreclosures so sales of traditional homes could pick up.

That’s happened, as remains clear in the April real estate activity report by SiteTech Systems.

But behind the numbers, another potential problem could be lurking: low inventory.

The new low inventory, though, involves the number of traditionally-marketed homes for sale and available lots to put them on. While it’s not a crisis and no one’s saying it’s going to get that way, a tightening of available properties to sell to eager buyers could raise prices which, at some point, could suppress demand.

“The inventory is being pressured in all segments on the south end,” said Lee Hewitt, broker in charge at Garden City Realty.

Hewitt said he believes buyers will accept some price increases, but he’s not sure how much is too much that will cause them to put their money back in the bank.

“It’s going to be interesting how it plays out in the next three, four, five months,” he said.

It’s not just the Murrells Inlet area that is seeing a shrinking inventory, said Todd Woodard, SiteTech’s owner.

Inventories are tight in the Carolina Forest and Forestbrook/Socastee areas as well.

The situation has gotten serious enough, though, that it has prompted one Realtor to send an email seeking potential sellers.

“On average we generate over 300 buyer inquires per week,” Realtor Greg Harrelson wrote. “In the last two weeks, we have had numerous buyer requests for properties that we have already sold forcing the buyers to wait for us to get more inventory. We have many buyers that have already seen the properties listed in the MLS, yet they may want a different floor in a building or they may want a different size home than what is currently listed.”

Woodard said that tightening inventories are being driven by price or geography. He said that across the Grand Strand, inventory of single family homes is up 5.9 percent over the same time in 2012 and tightest for homes priced under $150,000.

Hewitt said he’s been seeing more action for upper-end homes in his area, a fact bolstered by the fact that while the number of transactions at his agency were up about 8 percent in April, there was a 15 percent to 20 percent jump in his revenue.

“Inventory that had been stagnant is now beginning to sell,” Hewitt said.

Other than tightening inventory in some price ranges and areas, SiteTech’s April market report was the same old same old, only better.

Sales were up, prices continued to inch forward and inventories of distressed housing were down, the continuance of a trend that began last autumn.

The report said that April’s sales production across the Grand Strand was the best month for single family residences since 2007, and was a 31.5 percent jump from April 2012.

A total of 443 single family homes had closed sales, more than 100 above April 2012. The median sales price was $175,000, an even $10,000 more than the April 2012 median. Ninety-two percent of April’s single family sales were at list price or above.

Year to date, single family sales are up 19.5 percent from the same time last year.

The market for condominiums was somewhat different in April.

Sales were at about the same number as April 2012, but have shown a climb of nearly 100 in the first four months of 2013 as opposed to the same time last year. The median condo price was down $5,000 from last April to $100,000, but remained at the same price, $103,000, in the four months year-to-year.

The number of condominiums sold during the first four months of 2013 was up 7.9 percent from the same period in 2012.

The distressed inventory of condominiums was 38.6 percent down from last year; distressed single family homes dropped by 29.9 percent from the prior year.

But Hewitt said shortages aren’t just in the finished product.

“We’re now seeing builders running out of lots to build on,” he said, but attributed the shortage more to price more than land availability.

That is reflected in the regionwide report, which said that lot sales dropped while the prices rose slightly to $36,000.

Hewitt said the Great Recession was the third real estate bust he’s seen along the Grand Strand.

“It seems like when the pendulum swings, it swings too far in one direction,” he said.

Now that it appears to be on its way back, he and others are hoping it won’t bubble up to another bust.

Contact STEVE JONES at 444-1765.

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