The Grand Strand’s real estate year has started just the way you’d want in a healthy market, with a modest rebound in numbers of sales – up 2.6 percent in January over December for single-family homes – and a median price up 8.2 percent to more than $196,000, according to a monthly report from SiteTech Systems, which tracks the local real estate market.
Condo sales were down 3.9 percent during the month after a year of modest growth, the report said, but the median price rose 18.6 percent to $116,500 in January.
While homes priced between $121,000 and $500,000 all hit historic peaks for numbers of sales in 2015, at least some of the area’s real estate watchers are watching as well the strength of sales for homes priced at more than $500,000.
The numbers of upper-end homes sold are modest compared with lower-priced homes, but the annual percentage increase for sales of homes at $500,000 and above harkens back to the Wild West days of the last decade.
I was a little bit surprised to see it up that much. It’s been gaining strength, obviously, but that’s a little bit more than I would expect.
Todd Woodard, SiteTech president
SiteTech figured that the $1 million-plus market grew by 105 percent in 2015 over what it had been in 2014. The increase in numbers of homes was just 20 sales, but the percent jump eclipses the previous high mark set during the boom days of 2005.
“I was a little bit surprised to see it up that much,” said Todd Woodard, SiteTech president. “It’s been gaining strength, obviously, but that’s a little bit more than I would expect.”
The trend continued in January, at least for homes selling from $500,000 to $1 million, which were up 23 percent from January 2015. Homes priced at more than $1 million declined from six sales a year ago to four sales in January 2016, a minor blip that represented a 33 percent drop in monthly sales for the price range from January 2015.
Marvin Heyd, broker in charge for Berkshire Hathaway Homes Services, said he began to notice increased activity at the high end during 2015, a trend that he said picked up speed last month.
“In December,” he said, “the whole spigot got turned on.”
In December, the whole spigot got turned on.
Marvin Heyd, broker in charge for Berkshire Hathaway Homes Services
Heyd attributed at least some of the upper-end growth to banks easing off on the interest rate for what’s known as jumbo loans, homes priced at $417,450 and up.
While conventional home loans now see interest rates of about 3.38 percent, Heyd said, the jumbo loan rate has dropped below 4 percent.
“Anytime you come down, that’s quite a saving (for buyers of high-priced homes),” he said. “Anything below 4 percent will stimulate sales.”
Heyd said the people who can afford the upper end had been buying $300,000 to $400,000 homes until recently, opting for square feet over high-end finishes. Now they’re back to wanting stone countertops, custom cabinets and better windows in their new homes.
Woodard said the increase sales at the upper end likely reflect increased confidence and a stabilized stock market.
He isn’t sure how many of the high-priced buyers are locals and how many are out-of-towners, but his guess is that most are coming from outside the area.
He talked recently with a local builder who told him that 80 percent of the company’s buyers are coming from outside the market.
While the high-end market is surging, sales of homes priced at $120,000 and less are sinking. Such home sales sustained Grand Strand Realtors during the Great Recession, but in 2015 it was the only price segment that declined in number of sales.
The segment reached a historic high with more than 900 sales as recently as 2012, but last year the number dropped to 673, a 15.2 percent drop from 2014.
“For such a long time, everybody was pushing $150,000 (homes),” Heyd said.
Now, the real activity is for homes $300,000 and above.
Heyd said his company’s sales this month are better than last and he sees good days for the area’s real estate during 2016.
Woodard is expecting modest growth in both price and numbers, just what you’d expect from a healthy, mature real estate market.