Buyers have the advantage right now when it comes to Myrtle Beach Oceanfront. Inventories are high and buyer interest is low. Why? Because the cash flow gap continues to widen. Rental rates can’t support the current price levels.

Momentum Investors – people looking for quick appreciation – are looking elsewhere. In a slow market, they can’t recoup the carrying costs – especially if they buy at today’s prices. So, a new buyer profile is emerging – the Value Investor.

Value Investors – people looking for intrinsic oceanfront value – want property for their personal use (family and/or corporate) and are looking for long term appreciation. The cash flow gap is mitigated by large down payments and/or the tax advantages.

Buying Strategies: Are you a Value investor? If so, here are some strategies for finding good values in today’s oceanfront market.

1. Start Shopping Now – the off-season is the best time to find a bargain. This Winter has been very slow, but the market is expected to pick up in the Spring. You have a three or four week window of opportunity to shop for a bargain right now.

2. Prepare for Rejection – make a low offer and expect to be turned down. Make a second or third offer, if they are willing to negotiate. Be prepared for several “no’s” before you get a “yes.” And, don’t get your heart set on one particular unit, or even one particular resort – you have to be willing to walk away.

3. Consider Makeovers – bargains sometimes need cosmetic work, or upgrading, that the current owner doesn’t want to be bothered with, or can’t afford to make. Look for the “ugly duckling.”

4. Make Offers on Several Condos/Resorts – some resorts have large inventories of similar units. You’re more likely to find a willing seller if you make offers on 10 units than on only one or two. Looking for units in a couple of resorts will further increase your chances.

5. Work with a Buyer’s Agent – onsite agents and listing agents are not working for you – they are working for the developer or seller. Find an experienced buyer’s agent who will represent you and your best interests exclusively. She/he will be knowledgeable about the oceanfront market, will do the leg work of presenting several offers on several units, and will help you negotiate a deal.

6. Ignore Listing Prices – they only reflect what the owner hopes to get and may not reflect current market reality. Do your own market analysis with the help of your buyer’s agent and then determine what you are willing to pay. In the end, market value is determined by what a unit actually sells for.

7. Look for Motivated Sellers – you already have the advantage of a slow market, now look for owners that are anxious to unload their unit. Some listings actually say “motivated seller” - most don’t. But you never know if a seller is motivated until you make an offer. Most sellers won’t give you that information in advance.

8. Offer Incentives – give owners a reason to take your offer. Offer to close quickly (30 days) with few or no contingencies. Pay cash, or line up your financing in advance. Price out needed improvements in advance then offer to buy the unit “as is.”

Value Investors will need solid financial resources in today’s oceanfront market – even if they do find a bargain. They will need to make large down payments or be able to carry significant negative cash flows. And that will work out just fine for some buyers – but not everyone.

Oceanfront Value Investors have to love Myrtle Beach, love the oceanfront and love the resort they’re buying into. Then they can enjoy their new condos and wait a few years for long term appreciation while 79 million “baby boomers” with their incredible buying power continue to come to the beach to live, work, play and retire.
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Are you a Value Investor looking for Myrtle Beach oceanfront?
Contact Barbara Chartier at 843-421-6680 or barbarachartier@century21.com .

Coming – “Myrtle Beach Oceanfront: Selling strategies in a slow market.” (Part 3 of 3)

The Myrtle Beach oceanfront market is slowing down. At one of the more popular oceanfront condo resorts, over 20% of the units are listed for resale. At others, sellers have lowered prices and are offering sales incentives in an effort to find buyers. Inventories are high and buyer interest is low.

Where have all the buyers gone?

A partial answer is - into hibernation over the winter. Myrtle Beach typically experiences a general real estate slowdown during the winter months. The market usually picks up in the Spring - so we’ll know better by the end of March how things are shaping up.

But there seems to be more to it than simply a seasonal slowdown.

New investors are finding the oceanfront condo market less attractive. Prices have skyrocketed over the past couple of years and rental rates have not kept pace. Tourism growth is lagging behind the growth of new construction,further diluting the rental market.

New buyers find it very difficult to cash flow properties when they add in Property Owner Association and Rental Management fees. And, with the slowdown, flipping possibilities are greatly diminished. Oceanfront condos will have to be held for a while for further price appreciation.

Where will the new buyers come from?

A new oceanfront buyer profile is emerging. They want oceanfront because of its intrinsic value. They want oceanfront for their personal use - family or business. They want oceanfront for long term price appreciation. And, they want oceanfront because of the tax advantages that diminish any cash flow or holding costs negatives.

The buyers are out there but they’re different from the investors that have driven the oceanfront market in the last couple of years. In this changing oceanfront market, sellers and buyers need to consider new strategies.

For more information on “Buying & Selling in a Slow Market” contact Barbara Chartier by phone 843-902-0204 or email barbara.chartier@century21.com .

Coming

• Myrtle Beach Oceanfront: Buying strategies in a slow market. (Part 2 of 3)
• Myrtle Beach Oceanfront: Selling strategies in a slow market. (Part 3 of 3)

Myrtle Beach is gradually becoming a year-round place to live, work and play. And that’s good for real estate - more things to do, more people to do them and more jobs to make it all happen. That means more need for housing.

Jobs: Recent statistics from South Carolina Labor Market Information indicate an increase of 18,000 jobs in December ‘05 over the previous year. About 4,300 of those were in construction, and 7,800 were in educational and health services. Even the traditionally seasonal hotel/tourism industry added jobs in December. “We are busier earlier and longer,” says Melissa Gause, corporate manager for Lakewood Camping Resort. Area resorts are working hard to attract conventions to their facilities year-round and it’s paying off. “Because of our convention business, it is not a huge big difference in regular and summer employment,” says Cindy Hull, sales director at the Marriott-Grande Dunes.

Tourism: On another front, Myrtle Beach will be breaking into the growing sports tourism market with the Ripken Experience - Myrtle Beach. In the past five years, 40 percent of U.S. adults attended an organized sports event, competition or tournament as a spectator or a participant, according to the Travel Industry Association of America. The Ripken Experience - Myrtle Beach is the first phase of a planned 300-acre sports development - to be used not only for youth baseball… but also for football, soccer, even band competitions during the fall and spring. Players and families will stay at Myrtlewood Villas. Again, the idea is to attract visitors to Myrtle Beach year-round.

Retirement: Don’t forget the 79 million baby-boomers who begin to turn 60 this year. Myrtle Beach continues to attract second home buyers and relocation / retirees who are just plain tired of shoveling snow. There’s plenty for these active folks to do beyond the beach, shopping, eating out and golf. The annual Job and Volunteer Assistance Fair for Senior Citizens held at the Myrtle Beach Convention Center attracted 400 people to 50 booths of employers and volunteer groups. Several groups seeking skilled volunteers found seniors with ideal job experience and free time. The Friendship Medical Clinic, a free clinic that serves low-income people, found potential volunteers in two nurses and a retired doctor, Director Terri Harris said. Today’s “seasoned” citizens have spent most of their lives trying to make a difference in the world. They don’t want to stop now when they relocate to Myrtle Beach.

So… it’s happening - slowly but surely. Myrtle Beach is becoming a year-round destination with the need for year-round places to live. And that’s good for real estate.

Resources:
More workers keep jobs in offseason by Dawn Bryant The Sun News
Anticipating the Ripken Experience by Dawn Bryant The Sun News
Senior fair attracts elderly, teens by Emma Ritch The Sun News