Closings Up, Volume Up, Flow of Money Good and Appreciation On the Horizon

Watch on your mobile device >>

This week, we had a great time talking with Buddy, owner of EF Hucks and Associates – the premier and long-standing appraisal and consulting firm that has been around guiding us for over 30 years.  Buddy walks us through with his answers to some very important questions to help us deal with the current market so we can know what to expect in the upcoming months and years.  His experience in trend analysis and market statistics – offers a sound view of how the industry is performing overall and how it affects us all.

Current Trends in Our Marketplace

Since we track house deeds, and have been doing so since the mid-1990s, we can see that during the past couple of years there has been an uptake.  We experienced a very tough market in 2008 and the year following was also a difficult year.  As a result, our increases have been slow but they are on the books.  Though we have seen small increments of improvement, the news is not as bad as it could have been since there could have been negative trends.

The total number of closings since 2008 has been up – this includes all types of properties; home sales, re-sales, condos, lots, commercial and rental units, etc.

When Will We See Healthy Appreciation Again?

There are several things that must take place in order for the real estate market to demonstrate a healthy appreciation and solid footing again.  The single most telling factor of how the housing market will perform – is the jobs market.

STEADY PAY RAISES

Given that a good appreciation rate is about four to six percent, we need to see the same level of pay increases on consumer jobs.  Not an increase of the number of jobs, but rather the earning power of those that are employed.  With that, there will be stronger consumer confidence, people will be able to afford and keep their homes and properties will move in and out of the market with ease.

BUYING AND SELLING OF HOMES

It is essential that properties change hands, are sold and continue to drive the real estate market machine.  The good news is that they have been selling.  Now that existing condos are moving we can expect to see a little firming up of housing prices.

MORE JOBS

Of course when there are more jobs, the economy overall improves.  An increase in jobs translates to more people being able to afford housing without going under water. As things slowly improve, we are seeing a lot of people seizing the opportunity out there right now and buying their dream homes at as much as half price! There are even some people who are making money off these deals – in fact investors have been on the scene during this steep decline in interest rates and housing values and are going to see excellent returns at some point.

MONEY FLOWING A BIT MORE FREELY

Many homeowners are putting up their home for sale even though they are not in a distressed situation.  The main reason is that it’s a great time to buy right now.  When we see money flowing to these properties, it drives the whole system and points to eventual stronger appreciation.

How Are We Doing In Terms of Volume?

Myrtle Beach is one of the communities that have a very strong average – 10,000 home closings projected by the end of 2011.  When you consider that in the peak time of our real estate industry, the total number of closings reached as many as 30,000 – though many of those were homes purchased to flip, today’s numbers look even better!

In terms of actual cash flow, the total amount of volume amounted to about a billion and a half dollars, clearly demonstrating that we have a very viable real estate market.

How Do Things Compare to Before?

Aside from the extreme fluctuations, price spikes, mortgage meltdown and subsequent crash of the market – when you look at the housing market in the early 2000s, the total units sold is fairly comparable to what we are seeing today.  In fact, we are exceeding those numbers today despite the economic downturn faced by the nation.

What Is In Store for the Next 18 to 24 Months?

In our marketplace we can expect to see a stronger market than it has been during the past several years.  Trending upward, there will be even more sales volume but distressed sales continue to exist and as a result housing prices appear to continue to decline for at least a while.  The good news is that during this time it is a great time to buy.

Volume appears to be picking up as well.  There are many people who have been able to successfully finance their way into some very good properties and at very reasonable rates.  It is not a good idea to buy homes primarily to flip them and earn a quick buck on them, rather the best route is to buy with the intent to live in the home for normal use.
~
To get in touch with Buddy and his team at EF Hucks, click here or visit their website for more information.  You can also sign up for their newsletter by clicking on this link.