Source: The Sun News
The Grand Strand real estate market continued to improve in February with double-digit jumps in single-family home and condominium sales and with median single-family home prices increasing for the first time in about two years.
Single-family home sales were up about 17 percent in February from the same month last year, and condo sales were up about 54 percent, according to data collected from the Multiple Listing Service on Wednesday.
"I think definitely sales are going to continue to improve as the pricing is declining," said Tom Maeser, a real estate analyst with the Coastal Carolinas Association of Realtors. "Those economic factors are going to eventually mean a recovery when you have decreased supply and increased demand. As those continue, it's a healthy sign."
The median price - the price at which half sold for more and half sold for less - for single-family homes was up about 8 percent in February compared with the same month last year. Prices rose from $173,500 in 2009 to $187,500 in 2010. The median condo price was down about 15 percent, dropping from $127,700 in 2009 to $109,000 in 2010.
The increase in home prices may turn out to be a temporary blip, experts say. But the single-family home market isn't as volatile as the condo market, which has been harder hit by short sales and foreclosures, he said.
The increase in median home price may have been due to a foreclosure moratorium over the holidays, which meant buyers were opting for slightly higher priced homes that typically couldn't compete with foreclosure pricing, said Paige Bird, a Realtor with Remax Ocean Forest. Some lenders including Fannie Mae and Freddie Mac suspended foreclosure evictions for several weeks during the holidays. It takes between 40 and 60 days to close on a property so the sales finalized in February would have started in December and January.
The number of condos on the market dropped by more than 1,000 from 2009, according to the MLS, and that loss of supply has created a little buying frenzy because there are fewer condos available and buyers don't want to miss the chance to get one, which has resulted in multiple bids on some properties, Bird said.
"A decline in the supply with higher demand creates a little more urgency," she said, adding that eventually it can lead to an equilibrium.
For Coldwell Banker Chicora, business throughout the Grand Strand from investors, first time home buyers and second home buyers has picked up.
"I think the numbers continue to validate the fact that our market continues to improve on a monthly basis, or a daily basis even," said Rod Smith, the director of general brokerage at Coldwell Banker Chicora.
Until this point, most sales have been on properties under $250,000 but some higher-priced properties between $500,000 and $700,000 have started to sell as well, he said. The median price increase in single-family homes may be a result of those higher priced properties starting to sell and shows a strengthening and firming of that market, Smith said.
The rise in median price is the result not of increasing prices, but of less availability of low-priced properties, said Greg Harrelson, of Century 21 The Harrelson Group. The lower-priced inventory is selling quicker than it was last year, he said.
Part of what is driving sales in the lower price ranges, especially in the condo market, is the number of cash buyers, he said.
Most of the sales in February, 51 percent, were paid for in cash, with 41 percent traditionally financed and the remaining 8 percent financed through the Federal Housing Administration, Veterans Affairs or other programs.
That may be the largest proportion of cash sales ever, with the average typically hovering around 18 percent, Maeser said.
Many of the cash buyers are scooping up oceanfront properties as an investment, Harrelson said. Some people who pulled money out of the stock market are now ready to invest it in real estate.
"A lot of money has been sitting on the sidelines," Harrelson said. "Over time they're starting to gain their confidence back in the economy and in the real estate market."
Harrelson is concerned about how long the market will stay at the bottom and whether a boost in business this spring can be carried through the rest of the year. He will be more optimistic if there are three consecutive months of a decrease in properties for sale, an increase in the number of pending sales and a decrease in the days on market, he said.
"The market could go down a little bit more ... but I don't anticipate anything drastic," Harrelson said.
By Adva Saldinger - asaldinger@thesunnews.com
