How Grand Strand housing sales have continued to flourish throughout coronavirus outbreak
Bill and Sue Becker have been planning for 18 months to buy a home in the Myrtle Beach area and move from the Philadelphia suburb of Pitman, N.J.
The coronavirus has complicated the sales process a bit.
But COVID-19 isn’t stopping them from buying their soon-to-be house in the Arrowhead Country Club neighborhood, which is under contract and scheduled to close on June 8.
The virus’ impact has instead made the couple even more thankful to be leaving the country’s most densely populated state to move to the warmer beach town where Bill’s mother already lives.
“It does make us feel satisfied that there is less chaos where there’s less population,” Bill Becker said. “Mainly because New Jersey is the most populous state per capita, there is a lot of confusion and issues with having that many people. So we are looking for a slightly less fast-paced style of living.”
The Beckers aren’t alone.
The coronavirus has brought with it doom and gloom for many sectors of the economy on the Grand Strand.
But real estate and housing sales — particularly single-family homes — have continued to flourish through the first four months of the year, and there are indications they will increase even more in the coming months, especially if economic recovery from the virus continues to progress.
People want to move to the Grand Strand now as much as they ever have.
Single-family housing sales, inquiries, and both median and average sales prices are all up through April compared to the first four months of 2019, which was a surging year in real estate.
“The first three months of the year are probably three of the best months we’ve seen in five or six years,” said Bradley Bennett, owner and broker in charge of Oceanfront Guru Real Estate in Myrtle Beach. “It hasn’t slowed down.”
The numbers
Through April, single-family housing sales are up 3.3 percent and median and average sales prices are up approximately 3.6 percent in 2020 compared to the first four months of 2019, according to reports from the Coastal Carolina Association of Realtors, which tracks sales predominantly in Horry and Georgetown counties.
Despite S.C. Gov. Henry McMaster’s “home or work” order that lasted nearly the entire month of April, and stay at home orders in most other states, single-family housing sales dipped just 7.6 percent in the month compared to April 2019 as there were more than 725 single-family home sales.
Single-family sales were up 5.1 percent in March compared to 2019, and coronavirus restrictions in S.C. began on March 18 when McMaster closed restaurants to dine-in customers.
And those sales are at increased prices.
The median purchase price of a single-family home in April increased 3.8 percent over April 2019 to $250,166 as well as 4.2 percent over March 2020, which was up 3 percent over last March, according to the CCAR.
Though condo sales are down 13.2 percent for the year, both median and average condo sales prices for the year are up between 7.6 and 9.8 percent to $144,950 and $167,169, respectively, and condo prices were also up in April.
Buyers expecting to cherry-pick distressed sales in the midst of a global pandemic have been disappointed.
“I’ve probably talked to five or six buyers looking for steals, thinking people are going to panic and drop their price because of the coronavirus, but that just hasn’t happened,” Bennett said. “It has really been business as usual.”
According to Multiple Listing Service numbers for single-family home sales in April through filings Monday, 764 homes were sold for a total of $215.2 million compared to 828 sales in April 2019 for $234.3 million.
Including commercial sales, total real estate sales in April consisted of 2,423 closed transactions for a total volume of $574.1 million. In April 2019, there were 3,087 transactions for $679.2 million.
“Considering what we were going through, to close over a half billion dollars in April is extremely successful,” Bennett said. “I think agents are excited about what happened in April considering there was pretty much a national lockdown.
“That tells me the consumer is extremely confident in our market and its ability to rebound.”
Now that coronavirus-driven restrictions on travel and businesses are being lifted throughout the country, buyers will likely flood the market.
Northeast states such as New York, New Jersey, Pennsylvania and Connecticut are feeding into the housing market’s strength, and the coronavirus is likely a contributing factor, as all four states have been hard hit with a high amount of cases and deaths.
Those areas have accounted for heavy online sales inquiries, as the coronavirus may be leading residents to move up their plans to retire and move south.
“It’s clear that people are going to want to get out of the Northeast and the Midwest even more than before, and I personally think there’s going to be a rush of people who want to get out of the large metropolitan areas and get into a more mid-market size town like Myrtle Beach,” said Brian Moxey, president of Coldwell Banker Sea Coast Advantage real estate, formerly Coldwell Banker Chicora.
“People fundamentally want to live by the beach, get to better weather, get to a nicer place. Then when you’re confronted by something really scary, I think people decide now’s the time.”
The process
Demand has remained high in a market that has been its most active since the housing bubble that preceded the Great Recession of 2007-09.
Single-family home inventory decreased 5.6 percent in April, according to the CCAR. More preexisting homes have come on the market since the onset of the coronavirus, and there are a lot of new homes being built, but home construction was stunted beginning in March by limitations on the amount of people allowed on a work site for social distancing purposes.
“Inventory is still a little tight,” Moxey said. “Inventory is going to control the real upside of it, so if we bring more inventory into the market, we’ll sell more houses.”
The Federal Reserve System’s precipitous drop of interest rates at the outset of the pandemic has led to a 30-year fixed-rate average of 3.57 percent in the first quarter of 2020, down from 4.62 percent for the first quarter in 2019, according to the National Association of Realtors. Though the low rates aren’t available to all prospective borrowers.
“The bargain interest rates out there are wonderful. … That has helped the housing market tremendously,” said Coldwell Banker realtor John Draughn.
Sales closings in April were slowed by several factors, including diminished activities by banks and the closure to the public of Horry County and city government offices, including the county register of deeds. So all filings had to be done electronically.
The industry is adapting to the current environment with technologies, such as virtual showings and e-signings rather than in-person home tours and signings.
The Beckers are among the many people who are buying homes in the market despite not seeing them in person, instead relying on a video tour from their Realtor.
Condos take hit
Coronavirus restrictions have taken a toll on condos, which are often investment purchases and used as rental properties.
Condo sales in April plummeted 41 percent compared to April 2019. They were greatly impacted by the closing for about five weeks of oceanfront condotels, which in many cases kept Realtors from entering units to take pictures and videos for interested clients.
Of the 584 condos sold in April 2019, about 37 percent were oceanfront or ocean view, Bennett said, so they are a large part of the local condo market.
“When they shut all the buildings down people couldn’t get in to see the units, and people buying these units its usually discretionary income, and for a lot of people it’s an investment,” Bennett said. “Why contract and close on a unit in the month of April when you’ll have all these expenses like HOA fees but you won’t have any income?
“… I expect condos will bounce back. We’ll likely have an unusually high May and June with buildings reopening.”
Pending sales of properties under contract through April decreased 21.5 percent for single-family homes and 55.7 percent for condos compared to 2019, and a closing takes anywhere from a couple weeks to more than a month depending on the type of financing.
“The reason why pending sales are down significantly is people weren’t able to come to town to look at the properties.” Bennett said.
But Realtors continue to be encouraged by the many inquiries and leads they’re receiving.
“I think we’ll have an absolutely awesome second half of the year because we had a great first quarter,” Moxey said. “Now I think the pent up demand and aging population in the Northeast and taxes and all the things that have driven people here in the past are going to be magnified right now when you throw in whatever happens with the coronavirus moving forward.”
This story was originally published May 12, 2020 at 10:44 AM.
