Grand Strand home prices / sales slumping ~ good news?

Home prices on the Grand Strand are now showing declines for the first time, according to July sales statistics from the Multiple Listing Service.

• Analysts had been baffled for months about why the Strand’s home prices continued to show year-over-year increases.

• An adjustment was inevitable, and some analysts say it could be a sign the bottom is near, while others are less certain.

PRICES & SALES DOWN ~ Good news?

• Average single-family home prices in Horry and Georgetown counties fell more than 9 percent, from $294,135 to $266,926.

• The median price - meaning half sold for more and half for less - dropped about 2 percent to $220,000 from $224,155.

• The good news is that stability in the market wouldn’t happen until this price correction showed up, said Tom Maeser, president of the Fortune Academy of Real Estate.

CREDIT CRUNCH ~ How long it will last?

Maeser isn’t sure how much longer, and Mark Vitner, economist at Wachovia in Charlotte, said the last few weeks of tightening in the lending industry won’t help things.

• “I’d like to think the market is near bottom. We had projected that sales would bottom out this year, but the abrupt lending tightening means we could see more” sales drops, Vitner said.

• Buyers will have a hard time finding interest-only loans and may have to put down at least 20 percent of the purchase price, hurting the price of a home they can qualify for.

• Rates on jumbo loans, which are often used to finance beach properties, have risen dramatically in the last week, he said.

FEWER BUYERS

“The pool of qualified buyers is smaller than it was a month ago and much smaller than a year ago,” Vitner said. “We’ll see sales weaken over the next several months depending on how long this credit shake out takes.”

While Vitner does think we’re “very close” to the bottom - he says that just means that prices will stop falling.

“That doesn’t mean all is well in the housing market,” he said, because some buyers who have contracts on homes may not be able to get the loan they thought they could.

SELLERS CUTTING PRICES ~ Buying opportunity?

Sellers are finally getting the message that they have to cut prices to sell. They’re either doing that or if they don’t have to sell now, they’re taking their homes off the market.

With prices down, now may be a great time to buy.

BOOMER RETIREMENT

In the long term, Vitner says Myrtle Beach’s appeal and retiring boomers will keep the market on the upswing.

“There’s no question the housing market will recover. It’s just a question of when.”

Source: Jenny Burns - The Sun News, Myrtle Beach, SC