2007 September | Myrtle Beach Real Estate

Archive for September, 2007

Myrtle Beach Real Estate Auction Announcement

Sunday, September 16th, 2007

Property owners try for quick sale at auctions
JENNY BURNS – REAL ESTATE

Posted on Wed, Sep. 12, 2007 – The Sun News

The number of real estate auctions is growing on the Grand Strand, and the beach is about to see what may be its largest – at least 48 residential and commercial properties from 25 sellers sold at one auction.

A new company, Coastal Auction Co., is holding the event at 10 a.m. Sept. 29 at the Marriott Grande Dunes.

The list continues to grow, but it already includes oceanfront lots and condos, Intracoastal Waterway lots and homes, an oceanfront estate in the Dunes Club, a lot in Grande Dunes, a home in DeBordieu, apartments and a motel in Atlantic Beach and commercial property ready for multifamily development.

People usually think of auctions only for distressed properties, but it is becoming a more popular way for an owner to quickly sell a property by a certain date, said Joe Exum, owner of Exum Auctions and Real Estate in Myrtle Beach.

Exum has formed Coastal Auction with David O’Connell, owner of the Myrtle Beach Home Store.

Exum has seen renewed interest in selling real estate at auction since the market slowed.
He’s seen more business in the last year than in the last five years, he said.

Auctions along the Grand Strand have had mixed results.

During the Sept. 29 auction, each property owner will decide if their property will sell with a minimum offer or as an absolute auction – meaning there’s no minimum price. Two properties – two-bedroom condos near Coastal Carolina University – will be sold in an absolute auction.

“Absolute brings the most excitement,” said Exum, the auctioneer.

Exum said Coastal Auction has spent more than $100,000 in marketing in newspapers in the East and Northeast, including the Wall Street Journal and the New York Times.

O’Connell is selling some of his own properties, including two oceanfront lots in Atlantic Beach.
O’Connell said he’s going to build on anything he doesn’t sell, but he wants to consolidate his property holdings for development in one place and sell those that are single properties in different areas.

“There will definitely be a boatload of really good deals,” O’Connell said.

A slumping market and falling prices, especially for oceanfront properties, have kept potential buyers waiting to see what will happen. By deciding to sell auction-style, O’Connell hopes the event will create a sense of urgency that buyers can snatch up good deals.

He and Exum say this is likely the largest multiproperty auction that the Grand Strand has seen in a long time.

Exum says an auction can sell a property at that day’s fair market value instantly. And, Exum said, he works with sellers to make sure they are setting a realistic minimum price. He has turned down some sellers who wanted to join the auction because of the price.

“It doesn’t make sense for us to bring in a property with a reserve that’s not realistic,” he said.
Since the seller writes the contract and sets the closing date, Exum said they have to offer some discount to the buyer.

Auctioneer Chris Pracht in Anderson, past president of the S.C. Auctioneers Association, agreed.
“If the seller is not realistic, then you’re going to waste a lot of promotional money and get nothing done,” Pracht said.

So far, real estate auctions on the Strand have had mixed results.
Exum has had success selling two properties at auction. The Seaside Plaza hotel was sold at auction in May for $792,000. The property had been listed on the Multiple Listing Service prior to that for $850,000, he said.

Exum also sold two duplexes on Chester Street for $671,000 last month, a price that satisfied the seller. But two single-family homes that went to auction didn’t sell immediately. One is still on the market, and the other is in contract negotiations.

An auction by Chris Pracht Auctioneers Realty and Auction LLC in Anderson also didn’t sell a group of oceanfront and oceanview lots in North Myrtle Beach on July 25. Pracht said the offer reached $4 million for the seven lots, but that was under the goal of the sellers. All the lots are now up for sale for $6.2 million, and Pracht said they’re negotiating contracts.

“We had good attendance, but the market was under the expectations of the sellers,” he said.
“It’s been a fairly tough market down there.” But he was successful in selling 14 parcels of land on the Murrells Inlet waterfront for $9.5 million in April.

Pracht warns that sellers shouldn’t use the auction method as a last resort. The best reason to do it is to sell in a timely manner, he said.

“The flip side is there’s no real guarantee of what the market is going to be at that time,” he said.

If you go
What Coastal Auction Co. auction
When 10 a.m. Sept. 29
Where Marriott Grande Dunes
What At least 48 properties, residential and commercial, will be for sale
For more information http://www.coastalauctioncompany.com/

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Myrtle Beach Condo Pricing Blues and Greens

Sunday, September 9th, 2007

Condo market on wild ride

Despite huge drops, experts say it likely hasn’t hit bottom
By Jenny Burns – The Sun News

Posted on Sun, Sep. 09, 2007

Prices for oceanfront condominiums along the Grand Strand have been on a roller coaster in recent years – and have now plunged to levels seen three years ago before the condo boom.

Condo prices skyrocketed in 2005 – increasing $100,000 in less than six months in many cases – but since then have fallen to the levels in late 2004 and early 2005.

“We’re exactly where we were three years ago. If we’re not there, we’re really darn close. It’s like we erased the spike,” said Mark Loomis, a real estate agent at Advantage Real Estate who specializes in oceanfront condos.

As prices grew higher, investors couldn’t afford to buy units that wouldn’t generate enough income to cover their mortgage. Flippers got caught with a property worth less than they bought it for, and supply ballooned. Then insurance spikes and mortgage tightening slowed the market to a crawl.

Real estate agents are telling clients it’s like getting a second chance to buy that condo that they didn’t buy three years ago.

Only resale condos have seen these dramatic price drops. Newly built condominiums seem to be holding their value better, agents say.

“Preconstruction oceanfront is still doing pretty well,” said Tom Maeser, president of the Fortune Academy of Real Estate. “It’s the resale that’s taking a hit.”

Case in point: Camelot by the Sea, a themed 230-unit condo tower that opened in 2001 in Myrtle Beach, sold a one bedroom unit in January 2005 for $209,900. The sales topped out at $345,000 six months later. In June, one sold for $176,000 – lower than the 2005 price.

The condo market’s rise and fall has made some folks instant money makers and others money losers.

Loomis said he sold a condo at $169,900 in August of 2004. It was a conversion – meaning a hotel room renovated into a condo – that closed in March 2005. That summer, he had a buyer who wanted to purchase his client’s unit for $260,000. They passed up the offer. A year later, the same condo had an offer of $200,000. His clients said that was way too low and passed again.

Now, the condo is listed for $157,900 – $12,000 less than what the client bought it for initially.
That condo took only 10 days to go under contract for the low $157,900 price – which proves that buyers are out there, Loomis said.

The fall in prices turned a potential $90,100 profit if the client had sold in 2005 into a $12,000 loss.

The tide of the condo boom turned so quickly few saw it coming.

“It’s like an instant brick wall on the roadrunner show and there’s no skid marks,” Loomis said.
Economists say it’s not necessarily bad that condos on the Strand’s oceanfront have fallen so much. It makes them more affordable to potential buyers, and the price adjustment has happened quicker here than other areas like Florida, said Mark Vitner, economist at Wachovia in Charlotte.

But he doesn’t think prices are done falling. He expects they’ll go a little further – and sales will rise before prices do.

Agents say these low prices should spur renewed interest in Myrtle Beach’s oceanfront – but they’re not sure when.

“We still haven’t seen the number of pending oceanfront contracts rise. We have a lot of shoppers but not a lot of buyers,” Loomis said.

He says investors are waiting, looking for signs that prices have hit the bottom.

“There are a lot of sharks swimming around the ship wreck. One guy would like to buy 10 to 15 oceanfront condos. But he’s not buying today. There’s no sense of urgency,” Loomis said.

Others are choosing to buy now. Dan Hennigar of Philadelphia, an iron worker, recently bought a new condo at Dunes Village. He wanted it instead of his older condo at Beach Cove because he said it was holding its value better.

His Beach Cove condo sold, but not at its boom-time price. He still made money off of it, since he bought it for $110,000 in 2003 and sold it for $167,000 this year.

“I wish I had sold it a year before. I would have made twice the money,” he said. “But you can’t cry over spilled milk.”

Frank Zambetti of New City, N.Y., wants to buy an oceanfront condo in Myrtle Beach, but he’s weighing his options.

“I know [prices] will probably come down a little more but I’m not waiting for that,” he said. Zambetti’s main concern is getting the needed rental income to cover his costs when he’s not in town. He plans to visit often to sell his Zamco Building Products.

High prices had caused many investors to get rid of their oceanfront condos because the rental income wasn’t enough to cover their mortgage costs, analysts say. Lower prices should make that more doable, Maeser said.

“For the consistent rental investor – those that don’t plan to flip properties – this is a good time to be looking at properties,” Maeser said.

But Loomis, who invests in condos himself, said he doesn’t think we’ll know we’ve hit the bottom until we are three to six months past it.

Some buyers have told Loomis to call them when prices start to go back up.

Investor and owner of Myrtle Beach Condo Store, David O’Connell, said he’s seeing out-of-state investors now looking at the area, saying they think the bottom is near and looking to buy. He’s seeing pent up demand. The question is, when will it break free?

An influx of speculators to the Grand Strand’s oceanfront caused the lightning fast spike in prices. At the height of the housing boom, Myrtle Beach ranked 20th in the nation for the amount of mortgages to investors, Vitner said.

“The runup in prices was way overdone. It priced a lot of buyers out of the market, who were hoping to flip properties and make a quick profit,” Vitner said.

Insurance increases, high prices and now mortgage tightening brought the market to a crawl.
But the pace at which prices have
adjusted is a good sign, Vitner said, although sales will grow before prices will creep up.

So how low will they go?
Vitner thinks they’ll fall a little bit further.

“We’re not going to see strength return to the Myrtle Beach real estate market for another year,” Vitner said.

Loomis said that basic economics dictates that prices may still have room to fall because inventory is still slowly rising.

Contact JENNY BURNS at 626-0305 or jeburns@thesunnews.com

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