There is a very distinct difference today in the real estate market for what a Seller believes and what a Buyer believes. The "facts" the home seller believes is that the real estate market has rebounded and is on the fast track to return to the pricing highs of 2006 & 2007. These facts are based on the continued pounding of this information into our heads by the national news media.
The "facts" that the Buyer believes show that the real estate market is about to implode again and the recent 1% jump in interest rates will impact pricing and things will start to decrease again. There is still an abundance of properties on the market for them to choose from and they have an expectation of 10% - 15% off the asking price of any property offered.
What do you believe? Why do you believe what you believe? Is your education of the current market derived by newspaper headlines, or do you follow the market, research the numbers monthly and use all available data to help you understand the market at a local level? Opinions generated without proper research can cost you money and time, so don't be stubborn because you want to believe...
The real estate market in any area of the world is determined by the properties in that market that are actually selling. It is not determine by what a single Buyer or Seller Wants to be taking place. The market is what it is and the only decision you would normally need to make is if you can participate in it.
The most recent facts from properties in our market show a flat market, in general. My opinion is that Flat is actually a good thing right now based on where we have come from. Last year we were happy that prices were only Decreasing around 2% - 4% annually, so for 2013 flat is an improvement. Pricing is always the central question when it comes to real estate, but the true drivers are obviously Supply of properties on the market and the demand for those properties. The demand for single family homes in our market is up 16% from the same period (Jan-June) in 2012. 16% more properties have sold this year and there are 1% fewer homes on the market to generate that increase. Supply and demand working together have brought the Average selling price of homes up 4% this year...but that is not entirely true. The larger factor is that all Distressed (foreclosure & Short sale) properties is down by 6%. Fewer properties priced low will improve the Median selling price more so than fewer overall properties available, or more selling.
Condo facts show that demand is up 5% and supply is Down 11% which has had ZERO effect on pricing. The average price is the same for the first six months of 2013 as it was in 2012. All of that along with Distressed condo sale being down 24%! Wow. Let me say it again...Condo prices have not moved up at all market-wide this year when compared to last year. This is true for the Myrtle Beach market.
Land supply still puts us with enough land to last for over 3 years based on the demand, so an extreme Buyer's market remains in effect.
When you remove Land from the equation and divide the number of properties selling in a month into the number available we arrive at a 8 - 10 month supply of properties today. A balanced selling environment (not a Buyers market or a Seller's market) happens when the supply is around 6 - 8 month supply.
In conclusion, our market is heading in a very good direction. A healthy direction. As has been predicted by real estate experts for over 18 months, we are in a long, slow, steady period for pricing. Flat pricing is expected through 2014 with very low single digit increases to begin in a year to 18 months. If a "Bottom" is still being discussed then it is past us. It is in our history now mainly due to affordability related to mortgage rates. Cash buyer's still have an advantage here.
Seller's shouldn't expect improved pricing which keeps them from selling if they want or need to. Buyer's should understand the market to know that demand has eliminated most seller's from considering offers of 10% or more off a fair asking price. If you want to buy it you better get it before someone else does. Just ask three of our clients that experienced this recently!
Make it a great day!
Ben
