Myrtle Beach area real estate prices even out

Myrtle Beach area real estate prices even out
Market analysts suspect bottom in sight
By Adva Saldinger - asaldinger@thesunnews.com


Real estate prices along the Grand Strand began to show some signs of stabilization in April and sales continued to climb.

The median single-family home price - the price at which half sold for more and half sold for less - was $168,000 in April, even with last year. The median condominium price was down only 4 percent to $120,000, according to data from the Multiple Listing Service released Tuesday.

Prices have fallen dramatically since the peak of the real estate market, and in April 2009 both single family home and condo median prices dropped by at least 20 percent.

"It's just encouraging news. It makes me optimistic on where the market is heading," said Tom Maeser, a real estate analyst for the Coastal Carolinas Association of Realtors. "Our recovery is there in sales ... and it's been consistent for quite a period of time. The next thing we need is for prices to stabilize and hopefully start to rise."

While the seeming slow of price drops in April is good news, it will take a few months before a trend of bottoming prices, or increases can be established, he said.

Rod Smith, the director of general brokerage of Coldwell Banker Chicora, said that the home price staying even and the small decline in condo price is indicative of the market having reached the bottom.

"I think we're going to see that continue, and I really think that's going to help firm up our market," he said.

As the low-priced properties sell quickly, some buyers are moving up into higher price ranges, and some properties that cost more than $500,000 have started to sell, Smith said.

Single-family house sales were up 48 percent from April 2009, according to the MLS. Condo sales were up 27 percent from 2009, a more modest increase than in recent months.

"I think it's a continuation of people coming down off the fence and recognizing the great buys that are out there," Smith said.

While sales are up, there are also more properties coming on the market, which means a longer wait before prices rebound, said Greg Harrelson, the owner of Century 21 The Harrelson Group.

The number of single-family homes listed in the MLS in April was 6,316, a number that is down slightly from last year but has been steadily climbing in recent months despite increased sales. The number of condos listed, 6,005 is down significantly from last year but has also risen in the past several months.

"We're not really burning inventory, we're remaining status quo," Harrelson said, adding that until sales exceed the number of properties being added, there won't be a price reductions.

The reason the market is seeing more properties for sale is because some homeowners, who were waiting out the market, have decided to sell their property, he said.

"What I'm seeing with prices remaining fairly stable in the residential market - that's an indicator that we may be at the bottom. The question becomes how long we stay at the bottom," Harrelson said.

The market will likely have some minor increases and decreases in price but will remain relatively flat for the next year, he said.

The nearly 50 percent jump in home sales is partly because of the expiration of the home buyer tax credit, which had buyers rushing to sign contracts on properties before April 30. The tax credit provided up to $8,000 to home buyers who had not owned a home for the previous three years and up to $6,500 to buyers who had owned a home for five consecutive years out of the past eight years. To qualify, buyers had to sign a contract by April 30 and must close on the property by June 30.

The second half of the month was particularly busy because of the credit, Harrelson said. Even though the credit is over, it may not mean a slowdown in sales, in part, because the incentive got a lot of people talking about buying properties, he said.

Radha Herring, the broker-in-charge of the Watermark Real Estate Group said she has seen business pick up, with more inquiries and more buyers.

She said low-priced properties are selling quickly and in certain communities the real bargain deals of last year are no longer available.

"As the good inventory is being depleted, the buyers that want to get that good inventory are having to pay a little more," Herring said.

That translates into price increases in certain high quality condominium buildings and developments, she said.

The number of sales paid for in cash dropped in April after exceeding 50 percent for a few months. About 45 percent of buyers paid cash for their properties, with 46 percent using conventional financing and the remaining 9 percent getting loans through programs like the Federal Housing Administration or Veterans Affairs.

That may be due to the fact that most of the buyers that qualified for the home buyer tax credit would have financed their properties and not paid cash.

"I don't think there's any way you can maintain a 50 percent cash sales scenario for a long time," Maeser said. "We've got to get other sources of financing into the picture."