Real estate sales slide in Myrtle Beach area

Grand Strand real estate sales slid again in November, a possible cause for concern, but single-family home prices continued to rise, showing signs of stability, according to data released Friday.

Single family home sales fell 34 percent in November when compared to the same month last year, according to the Multiple Listing Service. Condo sales dropped 18 percent in November from the same month a year ago.

"It's starting to get to the point that you have to worry that sales are slowing down for a reason," said Tom Maeser, a real estate analyst for the Coastal Carolinas Association of Realtors.

When sales dropped last month, Realtors and experts said it was a result of several factors including a rush last year to buy before the home buyer tax credit expired, uncertainty surrounding the election and foreclosure problems. The continued drop might not be able to be explained away in the same way, Maeser said.

Some Realtors were not concerned about the drop in sales and didn't see it as an indication of more troubles ahead.

"I don't see concern in that it's off, that it's something drastic, that it's not going to come up next year," said Marvin Heyd, the owner of Prudential Myrtle Beach Real Estate.

Heyd said the market is typically slow in November and that last year's sales were boosted by the home buyer tax credit.

Drew Streett, a Realtor at Garden City Realty and the regional vice president for South Carolina Realtors, said the drop in sales is not uncommon in an election year when there is uncertainty about who will be elected and how the new government will work, he said.

"I don't think it's something to be concerned about. A lot of people in October and November were waiting to see how the election would play out, now they're waiting a little," he said. "I feel like the spring, the end of 2011 is going to pick right back up."

Penny Boling, the broker-in-charge of Century 21 Boling and Associates, said that last year at this time buyers were going after any property with a low price and this year they are being more selective, which may be part of the reason sales are down.

"I think last November was just heating up with foreclosures and the short sales and people were buying anything," she said. "We've cleaned the market up a little bit."

Maeser said that foreclosures have been driving sales - about a third of all properties sold are either foreclosures or short sales - and that delays as banks halted foreclosure sales could have contributed to the decline in sales. Sales could also be lower because the best deals were bought quickly, leaving fewer of the low-priced properties available, he said.

The number of single-family homes on the market was down to 5,861 from about 6,200 last year and the number of condos on the market dropped from 6,186 to 5,248 last month, according to the MLS.

The inventory has dropped because buyers have bought low-priced properties but also because some sellers, who don't have to sell now, have taken their homes off the market, Heyd said.

Single-family home prices went up 5 percent in November, when compared to the same month last year, continuing a trend of small gains. Condo prices continued to drop and were down 6 percent last month from November 2009, according to the MLS.

Foreclosures are more of a problem in the condo market than they are in the single-family home market, which is part of the reason home prices are stabilizing, Maeser said.

Boling said that certain neighborhoods and resorts have stabilized but the lack of financing on oceanfront financing continues to push prices on those properties down.

Those properties are largely being purchased by investors who are paying in cash, she said.

About 49 percent of buyers paid with cash in November, with 44 percent using traditional financing and the others using programs through the Federal Housing Administration or Veterans Affairs to pay for their purchases.

"There's a lot of buyers out there that still have a lot of cash. I don't think we've tapped that resource yet," Boling said.

Streett said he's not worried about the number of cash buyers, or that their money will dry up because they continue to go to his company looking to buy property.

"To carry us through the short-term, yes, I think it's very sustainable," he said.

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Tourism picking up, but real estate lags on Strand

Economic recovery is under way along the Grand Strand, but expect tourism to bounce back before real estate does, said Robert Salvino, a research economist at Coastal Carolina University.

"In housing, it will be years before we get to the [pre-recession] level because it was an unprecedented upturn," Salvino said at a university event Tuesday morning. "That recovery will just take some time, but it is there. It's just slowly coming. Tourism, I think, will get back to a normal pace much quicker."

Salvino offered his latest predictions for the regional Waccamaw Council of Governments -- which includes Horry, Georgetown and Williamsburg counties - at the Waccamaw Higher Education Center in Litchfield Beach.

Hotel occupancy is expected to rise 1.7 percent this fall and 0.4 percent this winter, compared with the same seasons last year, Salvino said.Occupancy increased 7.6 percent during the summer. Room rates at hotels rose 1.6 percent during the summer, and will continue to rise through the off-season with a 3.3 percent rise projected for fall and 2.7 percent for winter.

How far the hospitality industry has rebounded depends on how you measure it, Salvino said.

Revenue per hotel room has already returned to pre-crash levels, but tourist spending has been slower to catch up, he said. Retail sales in 2007 were $1.1 million and fell to about $929,000 in 2009 and were up to $972,000 by 2010. At this rate, tourist spending will be 90 percent recovered by summer 2011 and fully recovered by 2012, Salvino said.

In real estate, building permits issued in Horry County have been flat from 2008 to 2010, he said. The number of permits for single-family homes is far from what it was during the boom years earlier this decade, Salvino said. For example, the U.S. Department of Commerce recorded 575 building permits in Horry County in July 2005 but only 90 in July 2010.

Because construction contributed so much to the economic boom, a weak real estate sector will hold the overall economy back from reaching pre-recession peaks, Salvino said.

The real estate market could rebound in 12 to 14 months, provided banks loosen their lending standards and foreclosures go away, but both of those factors are uncertain, said Tom Maeser, a real estate analyst with the Coastal Carolinas Association of Realtors, after the event.

Even if the area returns to the number of homes and condos that were being built or sold during the boom, the properties may not fetch pre-recession prices, he said.

Other recovery indicators, such as consumer confidence, have remained flat, Salvino said.

The amount of shipping through the Port of Georgetown also remains down and that's not likely to change unless the port is dredged, he said. Even if the Georgetown steel mill reopens in 2011 as ArcelorMittal representatives say it will, that is unlikely to make a large difference in the amount of goods that go through the port, he said.

Salvino's biggest message was that the economy will remain relatively flat in the near term, said Tim Tilley, president of heating and cooling engineering firm EnviroSep.

Tilley was one of a handful of businessmen in an audience of mostly academics and municipal and county employees. About 30 people attended the event.

The economy needs to diversify beyond tourism and real estate to get beyond the flat projections, Tilley said.

"We need diversification in the area in the form of manufacturing and engineering resources," he said.

Diversification is a slow process and there's no clear route for the region, which is at the whim of entrepreneurs, Salvino said.

The Waccamaw Regional Council of Government's Economic Outlook Board will next meet in February to renew its forecasts.

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