Myrtle Beach 3rd Q ~ single-family homes show strength
Myrtle Beach ranks in the bottom half of the nation on the likelihood that prices for single-family homes will decline in the next two years, according to a study by The PMI Group.
RISK INCREASING
But the potential for a price drop has doubled since last year, the report says. Myrtle Beach’s chance of a price decline increased from 8.2 percent in 2005 to 17.5 percent in 2006.
• That’s because a 21 percent increase in home prices between second quarter 2005 and second quarter 2006 has hurt affordability.
• “That’s really high - a 21 percent increase,” said Beth Haiken, spokeswoman for The PMI Group. “Prices are increasing much faster than people’s incomes.”
• “A lot of the areas appreciating very quickly in the 20 [percent] to 30 percent range have slowed down. But Myrtle Beach its still going up. It could continue, since unemployment is low and employment growth is good,” Haiken said.
• But the market can’t sustain 21 percent appreciation forever, she says.
• “People’s income cannot keep up. That’s what we’re seeing in other areas around the country,” she said. “That’s not necessarily a bad thing. It’s a situation where houses and incomes are in balance.”
APPRECIATION SLOWING
Single-family home appreciation already has showed signs of slowing from its double-digit pace on the Strand.
• For the third quarter, the average price of single family homes is up 7 percent from last year, according to the Multiple Listing Service for Horry and Georgetown counties.
• “We’re already noticing price appreciation slowing. It’s conceivable that we could be a little above the national average [4 percent to 6 percent] next year because of the number of out-of-state buyers buying high-end product,” said Tom Maeser, market analyst and president of the Fortune Academy of Real Estate.
NATIONAL TRENDS
Nationally, the potential for price drops increased from 28.8 percent to 32.8 percent.
• And 18 of the 50 metropolitan cities ranked in the study face a greater than 50 percent chance that home prices will decline. That’s up from 13 cities in the first quarter.
• Year-over-year appreciation remained in the double digits in 20 cities and topped 20 percent in four - Phoenix and Orlando, Miami and Tampa, Fla. - while the rate of appreciation slowed in 41 of the 50 cities.
• The risk of price declines is concentrated in California, the Northeast, Fort Lauderdale, Fla., and Las Vegas.
Source: Jenny Burns, The Sun News, Myrtle Beach
