The market continues to work through the issues left from the real estate bust, with experts hesitant to predict what’s next until the market sells the supply of foreclosures and short sales that have flooded the inventory, forcing prices down.
“What we are seeing is a continuation of the reduction of inventory in the market,” Smith said. “We are not going to get any better until we get rid of all this inventory.”
The problem is, no one can pinpoint when that will be. There’s no way to know how many foreclosed houses banks need to unload, said Tom Maeser, real estate analyst for the Coastal Carolinas Association of Realtors.
Experts have thought the market had bottomed out, only to see prices drop even further. Smith calls it a “sloppy bottom.”
“We are just walking along in this mucky, sloppy bottom,” he said.
Prices have plummeted in the last five years, leaving many homeowners owing more on their houses than they are worth and others who want to sell unable to at the much lower price.
The median price for a single-family house along the Grand Strand has fallen from $217,108 in August 2007 to $162,000 last month, according to the MLS.
That’s good news for buyers who can get financing, which requires much more paperwork than a few years ago during the housing boom. Another plus: Interest rates hit another record low Thursday, with the average for a 30-year fixed mortgage falling to 4.01 percent – the lowest rate since Freddie Mac started keeping records on the rates in 1971. Experts predict the rates will continue to drop.
Still, the low rates have done little nationally to entice buyers, many of whom don’t have enough for a down payment or a high enough credit score to qualify amid the tighter lending standards.
Cash buyers are helping keep the Grand Strand market going; 50 percent of buyers in August paid cash. Five years ago, only 15 percent were cash buyers, according to the MLS.
“If it weren’t for those cash sales, we would be in worse shape,” Maeser said.
Signs nationally point to a rough road ahead. Sales of new homes fell to a six-month low in August, the fourth consecutive monthly decline, the U.S. Commerce Department reported Monday. New-home sales are on track to have the worst year since the government started keeping records a half century ago.
The Grand Strand market is mixed, with one single-family neighborhood showing stability by having less turnover than average while developers desperate to unload oceanfront condos are selling them to the highest bidder at steep discounts, Smith said.
“You can see both ends of the spectrum,” he said.
Experts are hesitant to predict what’s next in this kind of market, but say there are positive signs.
Builders are at it again, adding new houses to the offerings that could lure buyers who will live here to help make up for the lost investor-owners, Maeser said. And some Realtors, including Marvin Heyd of Prudential Myrtle Beach Real Estate, have seen more buyers trickle through in recent weeks.
“September we’ve seen sales spike up a little bit,” Heyd said. “We’ve seen a lot of buyers coming in in September, a lot of them paying cash. We are seeing some good signs.”