Market Trends ~ Condos soft / Homes strong in 2nd Quarter

THE GRAND STRAND MARKET CONTINUES TO SHOW SIGNS OF SOFTENING - especially in condominiums, where sales dropped 30 percent and listings nearly doubled over last year.

The single-family-home market remained strong, topping past year’s second quarter record sales by 4 percent. Still, single-family sales in the last three years increased 21 to 27 percent and listings grew by 50 percent.

CONDOS: Lower sales, higher inventory, longer time on marlet

• Condo sales dropped from 5,091 last year to 3,576 in the second quarter.

• Condo listings climbed from 3,584 last year to 10,031. There were 9,012 condos listed in the first quarter.

• Condos are taking 172 days, compared with 30 days last year.

HOMES: Higher sales, higher inventory, longer time on market

• Single-family sales increased from 2,793 to 2,892 in the second quarter.

• Home listings grew to 4,848 from 3,165.

• Homes are taking an average of 141 days to sell, compared with 92 last year.

EXPECT PRICE DECLINES

“Sellers sitting out there have their mindset of 2005, and they’re pricing it with that mindset. And 2006 has changed dramatically, and they are going to have to reevaluate their pricing,” said Tom Maeser, president of Fortune Academy of Real Estate.

Maeser expects price declines in certain segments of the condo market because of the high inventory and a drop in sales.

He said he expects single-family homes to continue to beat last year’s sales pace but condo sales to stay slow.

“If last year is the standard, we’ll continue to see the same decrease in sales, since there will be a lot of inventory on the market because prices are still fairly high,” Maeser said.

Mark Vitner, senior economist for Wachovia in Charlotte, N.C., said he expects the condo market either to appreciate very little or to see price declines. He said the market hasn’t been the same since Hurricane Katrina.

“Speculators were driving up demand in the three years prior to Katrina, and after Katrina they were adding to supply. They’re either breaking contracts or closing on property and immediately trying to sell it,” he said.

Vitner expects the market to work out those kinks through the next year.

“Some folks will take their property off the market, and others will come down in price, and the market should clear out after 12 to 18 months,” he said.

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

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