2013 appeared to be an amazing year for the Real Estate market nationally, but how did it fare where your property is located?  You've heard that Real Estate is Hyper-local and that proved to be very true along the Grand Strand in 2013.

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Welcome to 2014; the year of the Amazing Real Estate market, right?  If you are a believer that past performance is an indication of future results you are taking the 2013 results and increasing them for this year, right?  Well, I have the good fortune to speak with dozens of people daily that have learned a lesson in Real Estate over the past 5 years and most are not on the bandwagon.  Before we look ahead to what may be in 2014, let's look back to 2013 and see how it fared against the previous year of 2012.  We have to see where we have come from, annualized, to see where we may go this year.  In its entirety, 2013 did prove to be a good year for housing.  Selling volume and sales prices were broadly higher in 2013 while inventory levels and days on market were lower.  The Grand Strand's inventory started the year with 9.5 month supply of homes and 10.5 month supply of condos (including Town homes) and ended the year down 15.7% & 5.6% respectively.  The tightening of the supply side aided in homes that sold getting slightly better selling prices with homes up 5.5% and condos up 2.5% for the year.  Been a while since any increase in pricing has been discussed, right?  Good News!  As for the demand side; single family homes had a whopping 19.2 annual increase and condos saw a 5.4% increase!  Remember these numbers.  The amount of time it took to get a property sold decreased slightly over the year with homes being down 6 days and condos down 9 days.  In review, the market had good positive numbers for the year along the Grand Strand with a gradual. slow climb out of the low levels it reached and has remained since 2010.  How can you use this information to look ahead?  Well, there are a few important numbers I believe can give us a general idea of what may happen.  As with any market you need to look at the supply vs.demand and the outcome.  Take a look at the previous numbers of single family home demand - UP 19.2% from the previous year, which effected pricing by 5.5%.  Would it be safe to think that another 19% increase would net us another 5.5% increase?  Sure, but there are other factors too; mainly the supply.  The Supply of homes did continue to decrease throughout 2013 and the decrease had a positive effect on pricing too.  I don't believe it will be the same in 2014.  There are two important things happening in the market right now that will effect supply in 2014; First, builders are building again.  Ride through any of the neighborhoods that have sat quiet that last few years and you'll see it happening.  The trucks are back and the cranes are flying trusses.  New Home construction will be a player in the supply side of the market this year.  Second, the holders-on are moving forward now.  The homeowners that haven't been able to swallow the market pricing over the past few years are going on the market now.  Many of these sellers are priced way out of the market, but they are on the market.  Some never left!  I actually came across a listing the other day that had been on the market for over 2,000 days!  It is an injustice!  Anyway, these homeowners will supply the market with homes at least for the first part of the year in hopes that the market has come up to meet their selling price.  In many cases, it won't.  There are also two important things that will happen in mortgage lending that will impact home sales in 2014.  First, rates will be higher.  Many estimate rates to jump to 5.5% range in the first quarter.  While it is still an amazing rate the threshold has been set and most Buyer's will be disappointed that 4.5% is not available any longer.  Others that can still afford to buy will hold back for a few months hoping for a rate decline before coming back in the market.  The second thing is the QM Rule.  The Qualified Mortgage rule is part of the Dodd-Frank act and will eliminate more Buyer's from qualifying for a mortgage.  There are industry-wide restrictions that cannot be broken by lenders in an effort to reduce high-risk loans.  This is another of the safety nets put into place after the real estate meltdown that will prevent 2006/2007 real estate markets from ever happening again.

Looking into the future (and making some assumptions), I see a market very similar to last year ahead of us.  I believe both single family homes and condos will see low single digit appreciation with higher than expected demand.  We will continue to see pockets of distressed (primarily Foreclosure) properties in the market, but the saturation levels should remain below 8% overall.  Short Sales have simply become so difficult for approval due to lender valuation many sellers aren't even trying any longer.  I do believe interest rates will rise, but our Buyers along the Grand Strand are generally smart to understand the small impact 1% can make.  Investors will remain in the market, but won't be the driving force this segment was in 2012 or 2013.  Certain sub-markets will see very high demand and the great properties in these markets will get multiple offers before selling, but only at what the market will bear.  Many Buyer's still know there is selection out there and won't get caught up in fighting over a market price.  The balance of pricing will be somewhat controlled by New Home supply, at least in single family homes.  There won't be any volume in condo New Construction until 2015 or 2016.  

I am very excited about the market ahead for both Buyer's and Seller's.  We won't be back in a market that sees 20% appreciation in a year, but given where we've been I think 3% - 5% appreciation is something to get thrilled about!

If you would like a full 13 page detail of the market in review emailed to you just let me know.  Email me at ben@benguyton.com with 2013 Market Report in the subject line.

I look forward to our next conversation!

Your Closing is today...How do you feel?

You have invested years planning, hoping and preparing for the day you close on this property.  You've spent months and months searching for it and weeks waiting to make this home your own.
Today you're finally closing on what will be one of your largest purchases ever and the place where you spend your life creating memories.

How do you feel about the journey?

Too many times the joy of homeownership is lost as we approach closing because of a small detail.  We focus on the one item that wasn't agreed on the inspection report, or that we paid all of our closing costs when the seller should have paid something....  In some cases it could be the experience you had with your Realtor.

There is absolutely nothing that should get in the way of your closing day being filled with JOY.

Being able to guide a homebuyer through the many steps of buying and closing on a home requires processes, attention to detail and anticipation.  Many of the mundane steps required to get real estate closed can be handled through proven processes and checklists, but that doesn't represent everything needed for a great experience.  The emotional journey a homebuyer takes cannot be "processed" and requires great attention to detail.  The relationship established through effective guidance should allow your real estate professional to anticipate your needs and keep the bumpy road smooth for you with you never feeling the bumps.  Great real estate closing don't happen by accident; they are planned and all the actions needed are completed only involving you where needed.

The best closings happen without a hitch and allow you to look forward to the day, enjoy the experience and continue your upward emotional journey into the months after you move in.

If your on this journey now or expect to start the journey in the future make sure to discuss your expectation with your Realtor.  When it comes to moving day and you reflect back on how you arrived your memory should turn your frown upside down!

Make it a great day!

Is a SELLERS Market Charging back?

 

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