4 Advantages to Investing in Myrtle Beach Real Estate

December 1, 2012 By Ben Guyton /Hoffman Group

With the housing market showing signs of improvement both in Myrtle Beach and surrounding areas, opportunities are in abundance for purchasing a vacation home or investment property. Whether you are a homeowner, a seasoned investor or desire to purchase a vacation or investment property, there are many advantages in doing so.
Following are 4 key advantages of investing in real estate in the Myrtle Beach and Grand Strand area:

1. Supply and Demand

The current real estate market in the Myrtle Beach area is considered a buyer’s market providing ample supply of competitively priced properties. When supply exceeds demand this results in record low prices. With an improving local economy, demand is showing increased growth. Demand, which closely follows an improving economy, is an enticing factor for investors who are looking for an ROI from vacation economies such as Myrtle Beach.

2. Rental Income Demand

Many investors find Myrtle Beach real estate attractive because of the rental demand for vacation or resort type properties. This has only become more in demand over the last few years due to attractive pricing and availability of properties.
A professional real estate agent knowledgeable about Myrtle Beach real estate will be able to provide advice that will assist an investor with regards to opportunities available to purchase, incentives, income streams, and ROI.

3. Historically Low Interest Rates

Interest rates have hit record lows, and investors are making some smart borrowing decisions with the low rates. While the current economic conditions with regards to the “fiscal cliff” are unpredictable it is safe to say that now is the time to take advantage of the record low interest rates.

4. A Growing Economy

Amid economic downturns and recent tough economic times statewide and across the country, rental incomes in Myrtle Beach have shown resiliency. The key is a successfully managed property which enhances. This strategy provides an investor with a better probability for positive cash flow.
If you are in the market to purchase a new home or condo, investment or otherwise, today’s market environment in Myrtle Beach is very promising.

The material provided is for informational and educational purposes only and should not be construed as legal, investment and/or real estate advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

Improving Market? You bet, but....

The Myrtle Beach area has experienced a welcomed month-to-month increase in residential sales activity from January through August. It is anticipated this trend will continue throughout the year due to excellent interest rates and some great bargains. It is also encouraging to see the number of sales over the 2011 figures each and every month with better than average improvements in May, June, and July of this year over the preceding months in 2011.
While inventory of residential properties has declined slightly each month over the last several months, there are 4,417 residential properties currently on the market. The largest percentage of homes on the market are between $100,000 to $200,000 with 1,739 listings. The second largest group is $200,00 to $400,000 which reflect 1,576 active listings. This price range also has had the most sales year-to-date at 804 and is a healthy 7.7% increase compared to 2011 which had 746 sales.
The market still clearly favors buyers due to ample distressed properties, bargain prices, and at or near record low interest rates. This does not mean if you are a seller that you cannot sell. It means you if you are selling your must be priced in the market and you must be have a good marketing strategy

The Short Sale Delima!

 

What are they and how do they impact me?

A lot of people I work with misunderstand what it means to short-sale a property.  Many think it means that you can buy a property in a short amount of time.  Truly nothing about a short sale takes a short amount of time. 

A short sale is when the owner of a property is attempting to sell the property for less than the amount(s) owed on the property.  That is the simplest definition of the process.

Short sales have become much more “popular” over the last 3 – 4 years as the economy has changed and real estate prices declined.  This option, initiated by the property owner, is a much better solution to a bad situation for both the property owner and the lien holder (bank), but it is not easy.

First, the property being sold must receive an offer from a buyer.  Basically nothing really starts on obtaining approval from the lien holder until an offer is submitted.  This is why an asking price on a short sale property is not an assurance that the property can be purchased at that price.  Trained Realtors know how to arrive at a price that can generate offers and have a good chance of bank acceptance.

Second, the seller must qualify for the short sale.  That’s right, the Seller must qualify.  A property owner must have a qualifying hardship for the bank to approve the property to be sold short of the mortgage amount.  Loss of job, reduced income, divorce and job transfer is the more prevalent hardships, but there are a few others.  A property losing value is NOT a hardship that qualifies for a short sale.

Third, All financial information is reviewed by the lien holder and must be submitted by the seller.  It is a requirement that you enlist the services of a Realtor (hopefully a certified one) to handle negotiations on your behalf.  As a property seller you will have to submit bank statements, tax returns, income statements, etc. to your real estate agent.  It is the responsibility of the agent to compile and present the information to the lender, not judge it.

Forth, Approval by the lender will be based on many things, but will always include the following three things; Seller’s financials, current market where the property is located and strength of the buyer.  The second item noted there, current market, is often overlooked with inexperienced real estate agents when working with sellers.  It is important to submit offers to the lien holder that closely represent what similar properties have SOLD for in the sub-market where the property is located.  Submitting an offer substantially below the current market will only frustrate both the Buyer and seller and potentially throw the seller into foreclosure once the offer is declined 2 – 4 months after it is made.

Last, Patience is mandatory when pursuing a short sale.  As I said in the beginning, nothing happens fast with a short sale.  If you have the patience to wait, then it is a viable option for purchasing or selling a property and is a much better option, for the seller, than foreclosure.  It is also far better for the community than foreclosure as pricing for a short sale generally falls between a non-distressed sale and a foreclosure, so it keeps values up for the neighborhood.

Compared to other areas of the country and even to other sub-markets in the area, Barefoot has fared well with the volume of distress properties.  So far this year we are tracking for a higher count of distressed sales in the resort than last year.  In 2011 there were 69 properties that closed as either a short sale or foreclosure.  Year to date for 2012 we have 47 properties either closed or pending in distress.  There are still concerns that we will see an even higher rate of distressed properties come to market this fall in this area.  Looking ahead there is growing confidence in the market stabilizing and fewer (non-distressed) properties coming on the market.  If the supply stays low and demand consistent then even with a higher than normal distressed inventory the prices will not be hurt too badly.  If you are not buying or selling real estate right now it is still important to stay informed about the market and know your properties value.  

Please accept this article as a brief summation of a very complicated and arduous process.  If you would benefit from more information or need professional assistance please reach out to a qualified Realtor certified in helping homeowners in hardship.  You can reach me anytime at ben@benguyton.com or direct at (843) 241-1929.