In Myrtle Beach, homes for sale dropped to a record number in 2021 as buyers entered the market by offering tens of thousands of asking price offers and forgoing due diligence steps such as home inspections and appraisals, agents said. local real estate. They made those sacrifices because so many sales turned into bidding wars.
At the same time, potential sellers have kept their homes, fearing they will not be able to find their next home at a reasonable price, if at all, further reducing the supply of homes on the market.
These “emotion-driven” decisions pushed prices to record highs as wealthy New Englanders moved to the region, full of cash and often able to buy twice as much property as they had in the north, but for the half the price.
A year after spike in home sales, the Myrtle Beach real estate market has finally begun to cool down. Rising interest rates and inflation have made the prospect of buying a home a much more expensive trial for some.
That doesn’t mean it’s stopped altogether, in any way, Century 21 real estate agent Greg Harrelson said.
It means that the market is much calmer. Properties that would have turned into 10-person bidding wars on the first day now spend a week or three before being sold to the fourth buyer who stopped, Harrelson said. Home sales are still happening fast, but not as fast.
“We are starting to see (number of) days on the market is increasing slightly,” said Harrelson. “Right now instead of selling in five days, hypothetically, it could be 25 days. This is still what we call the seller’s market. But it’s definitely completely different from what it was last year. “
The slowdown has also meant buyers have a bit more leverage, though Harrelson warned against calling it the buyers’ market. Basically, buyers no longer feel obligated to give up their rights to home inspection and the ability to withdraw if the valuation goes wrong. The offers they make are competitive, but not well above the asking price.
“It’s 100% different than it was three months ago or four months ago,” said Renny Diedrich, vice president of the South Carolina Association of Realtors on Myrtle Beach. “It’s a more normalized market. The past two and a half years have been something we have never experienced. “
If buying a home today is an experience bordering on calm, when did the slowdown begin?
Harrelson said he first noticed a change earlier this year.
“Before you see a change in the data, you will see a change in the conversations,” he said.
Suddenly, shoppers seemed more frustrated. They were “fed up with having to pay more and more,” Harrelson said. They complained about the multiple bidding wars, paying $ 30,000 more than the asking price.
“Shoppers felt bullied,” Harrelson said.
While, “at the height of the market, people were saying: ‘Find me something. I’ll pay for anything, ‘”he added.
As the slowdown has progressed since the beginning of the year, the supply of homes for sale has steadily picked up. In a building Harrelson works with, there were three condos for sale last year. They are now 40. Prices remain competitive, he said, despite the massive increase in availability.
“On average, (there were) 4,500 homes on the market from 2000 onwards,” said Diedrich of the Myrtle Beach area. “We have dropped to a low of around 1,200, and are now back to around 2,100. So we’re not where we normally are, but we’re heading in the right direction. “
Neither Diedrich nor Harrelson believe there is much chance that house prices will actually fall, at least in the meantime. Home sales are still happening at a steady pace.
“I honestly don’t believe, based on what we’re hearing and what we’re seeing, that prices will go down,” Diedrich said. “They just won’t increase as rapidly as they have in the last couple of years.”
A positive sign is that sellers are not suddenly rushing their homes to market as the slowdown appears, Harrelson said. This happened during the 2008 financial crisis and contributed to that long-lasting recession.
Advice for buyers
Diedrich and Harrelson shared tips for buyers and sellers as the housing market continues to change. The essence was that buyers simply “breathe”, as Diedrich said.
There are also some more concrete tips and ways of thinking that people need to consider.
Think long term: Interest rates have scared buyers, but they are still quite low. If you want to buy a house, do it. You can always refinance the loan if interest rates drop in a few years.
“Some people will say to me, ‘Well, great, I’ll just wait for interest rates to go down,'” Harrelson said. “Here’s what I’d say: ‘Well, what happened the last time interest rates went down? The last time interest rates went down, there was nothing to buy, no inventory. And when one came, you had to pay an extra $ 30,000. ‘ So be careful what you want. ”
Also, having a higher base loan will cost more in the long run over the 30-year life of the loan than just a few years of interest, he added. Even though a 6% interest rate hurts more than 3%, it’s still better than the double-digit rates the US has seen in past decades, Harrelson said.
For Buyers: Diedrich recommends getting pre-approval for a loan with a local lender because he knows more about any rules for beach houses, such as when a home is bought as a vacation property.
And don’t be in a hurry. Buying a home is a long-term decision, a place to spend the next decade or more of life. If you see something you like, don’t wait, but if you’re unsure, spend a little more time looking for the perfect fit, Diedrich said.
“Before, (the buyers) had no choice. They had a choice of A, A and A and they thought, ‘Well, let me guess? I will choose A because I had no choice, ‘”Diedrich said.” Now there is a little more competition out there and I feel they can make the best decision. … They are not making a decision because they have to make a decision.
For sellers: Prepare your home for sale; don’t wait to see if there will be another market shift or a “better time” to buy your next home after the sale, Diedrich said. And make sure you get the latest advice from a local real estate agent, because market conditions are changing from month to month, he said.
“Have someone updated on local industry trends and local trends so they can educate you,” he said. “Like, ‘Here are your options. What road do you want to take? ”