Amid a slower, somewhat stagnant real estate market, some bright spots have emerged, reports The Myrtle Beach Sun-News.
Some real estate brokers are reporting an increase in sales in November from October, while a handful of builders are saying they’ve noticed an upswing of calls. South Carolina mortgage activity appears to be returning to the area.
Statistics from the Multiple Listing Service don’t show an overall sales increase between these months. But with several good signs emerging - inventory is dropping, buyers are calling - real estate agents expect that buyers will return to the South Carolina housing market in 2007.
“The agents seem optimistic about it picking up. A lot of people are thinking or hoping that it’s kind of bottomed out and it will be stagnant or stale for a few months and then pick up,” said Rod Smith, director of general brokerage at Coldwell Banker.
Smith said that’s likely because the Carolina Forest office sells mostly single-family homes - not condominiums, where the market has been hit the hardest.
It’s busier at Classic Home Building & Design Inc., too.
“We’re seeing an increase in inquiries in the last 60 days and increased traffic in our model homes,” said Berkley White, the company’s president.
But there’s no doubt things have been slow for real estate in the final months of 2006. Single-family home sales fell 28 percent in November from last year and 8 percent from the month before.
Condo sales fell 27 percent from last year, but increased 6.5 percent from October.
Smith says he hears most often that buyers are waiting for their homes in the Northeast to sell - delaying a purchase on the Strand. Other buyers are saying they’re waiting until after the holidays to look around for the right home mortgage loans.
The market showed its first year-over-year median price decline in condos in November to $189,900 from $194,000 last year, said Tom Maeser, market analyst and president of the Fortune Academy of Real Estate.
But Maeser said agents are seeing a pickup in activity, and inventory is dropping. This is mostly due to sellers taking their homes off the market - realizing that it won’t sell unless they lower the price perhaps more than they’re willing.
Sellers are now adjusting prices accordingly if they want to sell - a shift from earlier in the year when many still thought they could get 2005 prices. This simply emphasizes the buyer’s market and the low price you could find on a piece of property.
With that in mind: why wait to apply for a mortgage?
Amid a slower, somewhat stagnant real estate market, some bright spots have emerged, in the Myrtle Beach area, the Myrtle Beach Sun reports.
Some brokers are reporting an increase in sales in November from October, and some home builders are saying they’ve noticed an upswing of calls.
Statistics from the multiple listing service don’t show an overall sales increase from October to November. But with several good signs emerging - inventory is dropping, buyers are calling - real estate agents expect a healthier market in 2007.
“Agents seem optimistic about it picking up. A lot of people are thinking or hoping that it’s kind of bottomed out and it will be stagnant or stale for a few months and then pick up,” said Rod Smith, director of general brokerage at Coldwell Banker.
The Carolina Forest office of Coldwell Banker Chicora saw a November sales month that not only topped October sales, but also ended up 123 percent above November 2005 sales.
Smith said that’s likely because the Carolina Forest office sells mostly single-family homes - not condominiums, where the market has been hit hardest. Other Coldwell Banker offices were flat or down from October.
It’s busier at Classic Home Building & Design Inc., too.
“We’re seeing an increase in inquiries in the last 60 days and increased traffic in our model homes,” said Berkley White, the company’s president.
But there’s no doubt things have been slow in terms of real estate and South Carolina mortgage activity in the final months of 2006.
- Single-family home sales fell 28 percent in November from last year and 8 percent from the month before.
- Condo sales, meanwhile, fell 27 percent from last year, although they did increase 6.5 percent from October.
Smith says he hears most often that buyers are waiting for their homes in the Northeast to sell - delaying a purchase on the Grand Strand. Other buyers are saying they’re waiting until after the holidays to look.
Sales in South Carolina are down across the board, and the local real estate market showed its first year-over-year price decline in condos in November to $189,900 from $194,000 last year, said Tom Maeser, market analyst and president of the Fortune Academy of Real Estate.
But Maeser said agents are seeing a pickup in activity, and inventory is dropping as home mortgage rates remain low. There are now about 9,500 condos on the market, compared to 10,493 in early October.
Maeser said this is mostly due to sellers taking their homes off the market - realizing that it’s a buyer’s market and they won’t sell their home if they aren’t willing to drop the price more than they’d like.
Sellers are now adjusting prices accordingly if they want to sell - a shift from earlier in the year when many thought they could get 2005 prices.
Agents say sellers are realizing the realities of today’s market, which is helping to cut down on excess inventory. The number of single-family homes on the market has dropped from 5,291 in October to 5,130 in December.
Heading into winter, the South Carolina housing market is continuing to cool, and the trend is especially evident in and around Charleston, the latest figures show.
The number homes sold in the tri-county region in November totaled 991, a decline of 15 percent compared to the same month in 2005, according to the Charleston Post & Courier.
For the year to date, local sales are down by nearly 5 percent.
While the activity isn’t off by as much as in other cities, the latest figures reflect the steady decline that the Charleston market has seen since the number of monthly transactions peaked in June 2005 at 1,574.
“The market was overheated,” said William S. Smith, an agent with Hartnett Realty Co. “We’re in a more realistic phase now.”
As a result, South Carolina mortgage activity is cooling and properties are taking longer to sell.
For November, the average number of days that a home stayed on the market climbed to 78 from 52 a year earlier, according to association figures.
Also, appreciation rates have steadied, said Patty Scarafile, CEO of Prudential Carolina Real Estate, the largest residential agency in the region.
In light of the slowdown, real estate agents have to emphasize to owners that homes need to be priced accurately to attract serious buyers.
“The houses that are selling today are competitively priced,” Scarafile said. “The public’s mindset has to go through an adjustment.”
The good news for sellers is that the latest figures show that overall, high home prices have yet to go south. November’s median home price was $204,624, up more than 8 percent year-to-date.
Though the slowdown in sales volume suggests that prices might fall, Smith said sellers still are optimistic about property values, and affordable mortgage loans should also help buoy demand.
He also noted that many are holding out, with hopes of getting lucky.
“Real estate tends to be an emotional and psychological issue for buyers, and sellers as well, so I don’t think it observes the dispassionate rules of economics,” he said.
Scarafile said the November sales figures didn’t come as a shock to anyone who pays attention to housing market trends. Her firm expected third-quarter sales to be the slowest and activity is now picking up.
“There are a lot of busy people out there right now,” Scarafile said. “Our listings are being shown, and we believe that will result in strong first-quarter closings.”
While the Grand Strand region of the South Carolina housing market is seeing quarter-over-quarter price declines, the lower-end market for existing single-family homes appreciated about 5.9 percent.
According to the Myrtle Beach Sun-News, that rate of appreciation places Myrtle Beach and vicinity fourth in the nation in between the second quarter 2006 and third quarter 2006.
Only Gulfport-Biloxi, Miss., Wenatchee, Wash., and Longview, Wash., had higher quarterly price appreciation out of 275 metropolitan areas, a third quarter report by the Office of Federal Housing Enterprise Oversight (OFHEO) showed.
The government agency tracks existing home sales through Fannie Mae and Freddie Mac, so the data only include single-family homes with loans under $417,000. The Strand’s quarterly price decline for resale single-family homes is for the entire market.
Andrew Leventis, an economist at the federal agency, said the disparity between the drop in resale single-family home prices and the federal numbers is the sale of high-end homes - above $400,000 - which are showing more softening than the lower end.
Mark Vitner, an economist at Wachovia in Charlotte, N.C., said that fewer high-priced homes are selling. Nationally, the report shows home mortgage loan applications and the housing market continuing to slow. Prices increased 0.86 percent between the second quarter and third quarter, the lowest increase since 1998.
The agency’s year-over-year price appreciation ranked Myrtle Beach sixth in the nation with a 21.7 percent increase. Leventis said he’s been impressed by Myrtle Beach’s prices outperforming those in the rest of the Palmetto State as South Carolina mortgage demand remains strong locally.
He said Myrtle Beach is the only city where that’s happening in the U.S. - where one city has much higher appreciation than the state average or other cities in that state. Wilmington, N.C, was listed 13th in the ranking with a year-over-year appreciation of 19 percent.
More pieces of real estate available for purchase and a bevy of price cuts make today’s South Carolina housing market ripe for first-time home buyers, local real estate agents say.
And several first-time home buyer workshops on the Grand Strand, offered by The Home Ownership Resource Center and First Federal Bank, can help renters get closer to achieving the dream.
“A 20 percent down payment and perfect credit are no longer the industry standards for getting a mortgage. Today, in most situations $500 is all an individual needs to put down in order to purchase their first home,” said Theresa Ross, certified consumer credit counseling professional.
“Get the Facts” will be a one-hour free informational session held tonight in Conway, S.C. Government-backed mortgage giant Freddie Mac created the “Get the Facts” program.
On December 2, the resource center will hold a free, day-long seminar on homeownership that takes participants through each step. Realtors, closing attorneys and mortgage lenders will explain what they do, and participants can get pre-qualified.
Participants can also set up personal credit counseling sessions and learn to read their credit reports.
“We help them from start to finish. We walk them through the whole process to qualify to get the best home purchase loan possible,” Ross said.
Ross said it’s important to look at your budget and decide what kind of mortgage you can afford.
“We want people to be able to live in their homes and not for their homes. Lenders always qualify you for more than what you can afford,” she said, adding that people become versed in credit scoring.
“I highly recommend people [check their credit] once a year irregardless of whether they are applying for credit. I had a lady the other day who had 12 lines of credit that were not hers.”
Rachel Broadhurst, president of Century 21 Broadhurst, said her company recently held a first-time home buyer workshop. She wants renters to know that in this buyer’s market, they’ll have more time to look around and are likely to find a good price.
“It’s time for them to start to looking around because there’s some good buys coming up out there right now. People are trying to get rid of inventory so there’s a lot to choose from,” Broadhurst said.
She said the main fear of first-time buyers is rejection - that they won’t be pre-qualified - and the other problem is the lack of money to put down.
“Many don’t know that they really can buy their own place. The home mortgage rates are staying good. Prices are down and there’s more to choose from,” she said.
Skyrocketing insurance premiums and steadily inventory have sent home sales tumbling on the Grand Strand.
Single-family home sales dropped 20 percent in October, compared to the 538 sold a year ago, according to the Multiple Listing Service for Horry and Georgetown counties.
Also, condominium sales dropped 34 percent to 423 from 640 last October.
“In my opinion, that’s going to be a continuing trend,” said Greg Harrelson of Century 21 The Harrelson Group.
The market is seeing a sharp increase in supply and a moderate decline in demand for home loans, he said. The result should be a decrease in prices in order to get properties moving … but this hasn’t been the case.
Prices are still showing year-over-year increases - with the average home price increasing 5 percent to $272,701 from $258,567 and the average condo price up 5 percent to $243,851 from $231,646.
However, most real estate agents say prices are being cut in certain segments of the home and condo market, as motivated sellers are offering big incentives in order to lure in buyers.
The market has completely “done a 180-degree turn from a year ago,” so large sales drops aren’t surprising, said Dale Johnson, owner of Palmetto Real Estate Partners, formerly Dale Johnson & Associates.
“Last year, there was still a tremendous amount of investor interest in the Myrtle Beach area [in October]. But this year, the investor has totally left the market,” Johnson said.
In Georgetown County, inventory has not been as high as the overall Grand Strand and sales declines have been smaller, said Royce King, president of The Litchfield Company Real Estate, LLC.
Harrelson said agents need to be prudent about what price they’re listing homes and condos a; if they want to attract middle-income home mortgage loan applicants, that is.
Many sellers are just listing property at a high price to see if it will sell, he said.
“I tell my agents, ‘Let’s not take overpriced listings. It hurts the real estate agent, the real estate company, and it hurts the consumer. It oversaturates the market. If we took those [units] off, supply would go down,” he said.
