Mid-Year Myrtle Beach Market Update 2013

If you are thinking of selling your home, click here for our Free Home Value Report. 

If you are interested in buying a home, click here to enjoy the Myrtle Beach-area Full Home Search. 

Hello and welcome back to my Myrtle Beach real estate video blog where I am bringing you relevant topics about our local market. Thanks, as always, for joining us!

I’m asked all the time how the market is doing. When asked that, it’s common for agents to attach their personal production to the state of the market. The two, however, aren’t necessarily direct reflections of each other, though. Just like life, there are ups and downs in businesses that don’t always represent what is going on in the market as a whole.

So today I wanted to give you some statistical information and recap these past six months of 2013 and compare them to the first six months of 2012. Let’s start with single family homes. The number of units sold from January through June of 2013 was up 16% from last year and the sales price was up 4.5%.

Now the next area is why it’s good not to attach opinion. I thought the price of condominiums would have increased; however, data shows prices remained flat. The number of units sold was up by 5% while the inventory has decreased by 11%. So there are quite a few less condos on the market this year than there were last.

Distressed sales are down by 24% which is great. There is still a tremendous amount of inventory, over 3,000 lots for sale! In the first six months of this year, 686 lots sold! Here’s the weird part, that’s the exact same number of lots that sold in the first six months of 2012.

So, in a nutshell, you have a stable market. I’m very excited! If you’re a buyer, it’s time. If you’re selling, take advantage of low inventory; interest rates have crept up and buyers are feeling a sense of urgency. So, give me a call at 843.251.2693 or send me an email greg@gregsisson.com I’d be more than happy to help you get started with your next real estate move. These last six months of 2013 are going to be great!

How Will Rising Interest Rates Affect the Market?

Watch on your mobile device >> 

Lately, I have been hearing the same question: how will rising interest rates affect the market? Interest rates have crept up in the past 30 days from a little below 4% to about 4.5% now. Because of this, there is a great sense of urgency for buyers. They want to avoid the possibility of paying a higher interest rate if they wait. This is great news for sellers on the market now.

If interest rates increase to 5%, the market will slow down a bit, but with current interest rates, buyers are ready to purchase your home. If you have any real estate questions or are looking to buy or sell, please don’t hesitate to call or email me.

How to Take the Uncertainty Out of the Transition

Watch on your mobile device >>

Brightwater Living is an independent senior living retirement community in the heart of Myrtle Beach. I met with Barbara Gans from Brightwater because there are so many questions on how the transition of moving from a home to a facility like Brightwater transpires.

According to Barbara, interested parties should look at as many independent living communities as possible. When you visit, there are many questions you should ask. We’ll look at three key ones. How do you like the community? Can you afford it and can you afford not to move to in? What about the “what ifs?”; what’s available if you need specialized care? Here’s a summary of the advice Barbara shared.

Question 1:  How does the community make you feel?

The best way you can figure this out is by experiencing the environment. You can do a tour, stay in a guest suite, participate in activities and enjoy meals there to see if you want to truly explore it. The best things you should look for you can’t taste and see. It all comes down to how the environment makes you feel. 

Question 2:  How much does it cost and can you afford it? 

Get all the facts and figures. To do so, ask lots of questions. Who owns the property? How long have they been in business? How are they licensed by the state? Ask for occupancy agreement templates to share with financial advisors, attorneys and family members. What are the home prices? What is the financial model? For example, there are many, such as life care, equity, and deed-based models so it’s very important to get all that clarified. Does the family have any liability when you leave the community? Make sure your salesperson is transparent. And, finally, ask for the complete cost analysis upfront. When you take into account all the services, you may be pleasantly surprised because it may be less than it is to maintain your own home.

Question 3:  What about the what-ifs?

What if you need a higher level of care? Be sure to ask about assisted living, memory care, skilled nursing, long-term care and physical therapy. What do these areas cost? Can you use long-term care insurance and how does Medicare factor in? Tour these areas, even if you don’t need those areas now. At Brightwater we offer a full continuum of care.  

To reach Barbara at Brightwater, please call (843) 903-8300. 

Give me a call so I can tell you where to be positioned and how to be successful in this market. Please contact me at (843) 251-2693 or email us at greg@gregsisson.com. We’d be happy to assist you. 

How to Use a 1031 Exchange to Save a Bundle When Buying Investments

Watch on your mobile device >>

If you're a real estate investor or thinking of becoming one, then you can definitely take advantage of this law, and I recommend you do so.

Basically, the "1031" allows you to sell one property and buy another without incurring capital gains taxes.
You simply have to re-invest all your profits into the next property (or properties) within a specific timeline (described later).

However, the property must be “qualifying property.” This is property held for investment purposes or used in a taxpayer's trade or business.

Investment property includes real estate, improved or unimproved, held for investment or income producing purposes.

Be aware that real estate must be replaced with like-kind real estate. This means that “like-kind replacement property” can be any improved or unimproved real estate held for income, investment or business use.

Here are some examples:
·    Improved real estate can be replaced with unimproved real estate and vice versa.
·    A 100% interest can be exchanged for an undivided percentage interest with multiple owners and vice-versa.
·    One property can be exchanged for two or more properties.
·    Two or more properties can be exchanged for one replacement property.
·    A duplex can be exchanged for a fourplex.
·    Investment property can be exchanged for business property and vice versa.

Be Aware: Your personal residence can't be exchanged for income property, and income or investment property cannot be exchanged for a personal residence in you'll reside!

What Are the Types of 1031 Tax Deferred Exchanges?

There are three types of 1031 tax deferred exchanges that can take place:

- Straight exchanges—two parties trade properties of equal or approximate value. This is the simplest exchange.

- Multi-party exchanges—this involves three or more parties buying, selling, or exchanging properties. Don't attempt these exchanges without the aid of a tax professional; they tend to be very complex.

- Delayed exchanges—this exchange allows the sale of the relinquished property and the buying of the replacement property to occur at different times as long as stringent rules are followed. This is the exchange most often used.

What's the Advantage of the 1031 in Terms of Taxes?

As the law's title indicates, the capital gains tax is deferred, but not eliminated.

However deferral is a great way to leverage small real estate holdings into larger ones!

Since you can postpone gains, you're able to use a tax-deferred exchange strategy to transfer equity to a larger property, all without paying taxes!

Another advantage is that there’s no limit on exchanges. This means you can make as many exchanges as you want!

So, over the course of your lifetime, you can keep growing income and appreciation by adding new properties without having to pay the capital gains tax!

If you specialize in buying and renovating properties and want to keep reinvesting your profits into larger properties, then this strategy is especially attractive.

Note: If you don’t keep reinvesting, you risk being classified as a real estate dealer by the IRS and will not be able to participate in exchanges.

What Are the Basic 1031 Qualification Rules?

There are some basic rules that must be followed in order to qualify for a 1031 exchange. These include the following:

·    The properties to be exchanged must be located in the United States. Note: You can exchange foreign property for foreign property and domestic for domestic. However, you can’t mix these exchanges together.
·    You must trade only like-kind real estate.
·    An exchange must be made that’s equal to or greater in both value and equity. Any cash or debt relief received above this amount is considered “boot” and is taxable.
·    The like-kind property must be identified within 45 days of the closing on the initial property.
·    All proceeds from the initial sale must be turned over to a "qualified intermediary" (also called a QI, facilitator, exchanger, etc.) who is the person or company playing the role of middleman.
·    Any of the proceeds not under the control of the middleman are subject to taxation.

The middleman holds the funds from the initial property in escrow until such time as the closing on the second property occurs.

The middleman also assists the owner with the preparation of paperwork and other services to ensure the transaction progresses in a smooth manner.

The closing on the second property must take place within 180 days following the close on the first property.

Wow, as you can tell, this is pretty complex subject and can't completely covered here! But if you're an investor or plan to be one, I hope I whetted your appetite for this subject. To learn more, contact me at insert link.

Win an iPad Mini!

Watch on your mobile device >> 

Interested in winning an iPad Mini? Sign up for our Market Snapshot to become eligible for a drawing on an iPad Mini on May 1st. Market Snapshot is an online tool that sends you monthly reports of properties sold and listed in your neighborhood. Just go to www.gregsisson.com/snapshot to enter.

If you have any real estate questions or needs, please feel free to call us at (843) 251-2693 or email us at Greg@GregSisson.com. Thanks!

Grand Strand Real Estate Market Update – April 2013 vs. April 2012

Watch on your mobile device >>

We’re seeing a fairly steady yet slow increase in average sale price and sales while the number of days remains close year over year and inventory levels also only slightly declined. In terms of distressed sales, both in the single-family and condo categories, though we are seeing some improvement there is still a fair amount of inventory on hand that we need to clear through before we can see a strong comeback.

All in all, our numbers and outlook is improving though it may be taking longer than as reported in some other pockets of the nation during this very promising housing recovery period. Here’s a look at our numbers as they relate to the first quarter of 2013 compared to the same period in 2012.

Single-Family Home Sales Up, Avg. Price Remains Fairly Flat, Homes Selling Slightly Faster

Right now, we are reporting a fairly significant increase year over year in the number of single-family homes sold through the end of first quarter. At 1,144 homes sold this year versus 1,007 sold in 2012 we saw a 12% jump in single-family home sales.

In terms of prices, there are two ways to examine price trends; first by looking at the average sales price and second, considering the median sales price. Looking at the latter gives us a better indicator of where the growth in our marketplace lies. As of April 1, 2013 our average sale price was $205,000 compared to $203,000 the previous year, marking a nearly flat 1% positive change. The median sales price is $160,000 for the first quarter of this year and last, meaning that half the homes were sold above that price and the other half sold fell below the $160,000 mark.

The number of days on market fell only slightly from 194 last year in the first quarter to 182 during the same time in 2013, pointing to a very slight positive change on market for single-family homes.

Fewer Homes On-Hand, Distressed Properties Still Dominate Nearly One Third of Inventory

Looking at inventory levels in the Grand Strand real estate market, we reported a slight decrease in the number of homes available from 4,288 as of the first of April in 2012 versus 4,034 homes on hand at the same time this year, indicating a 6% decline and a 10-month supply of inventory.

Distressed sales have slowly begun to clear away though there are a significant number of homes to be sold yet with 28% of our first quarter inventory this year being distressed properties. This compares very closely to last year’s 28% of closings in the distressed property category.

Condominium Sales On the Rise, Average Price Up Slightly, Condos Selling Faster
The number of condo units sold last year through the first quarter was 845 as compared to the 8.5% jump indicated by 924 units sold this year. Though not as much of an increase, we saw a positive change by 4.5% in the average sale price of condos with last year’s average at $126,700 to the first quarter of 2013 average sale price at $132,000.  Median sales price also climbed a modest 5% year over year, going from $100,000 to $105,000 respectively.

The total days on market changed a fair amount this year going from 186 to 127 for the first three months of the year.

Inventory Steadily Clearing, Distressed Sales Continue to Dominate Condo Market

The number of available condos went from 3,963 in 2012 to 3,383 by the end of the first quarter this year, representing a 15% decline in condo inventory. The hardest hit segment in our marketplace during the market crash and throughout our recovery has been condos, highlighted in the percentage of distressed sale closings that represent our market. At 25% of closings in 2013 and 35% of closings the previous year, distressed sales still hold a significant impact on our market.

Land Sales Up a Small Amount, Prices and Days On Market Remain Fairly Flat

In terms of land sales, we have seen a huge surge in the number of building permits obtained during the past few years. Looking at the first quarter of 2013 for the number of lots sold, however, we were at 265 as opposed to 271 the year prior. The average sales price saw a very modest increase from $78,000 last year to $83,000 in 2013 through the first quarter. Distressed sales were down from 42% the year before to 35% by April 1 of this year. Time on market has remained flat with just a two-day change year over year.
~
These figures indicate slight improvement in some areas and a stronger positive trend in others though the overall consensus is that we have a while to go before we can expect to see a significant change. Our inventory levels are still fairly high and the number of distressed properties continues to dominate a good portion of our market but we’re moving in the right direction. We expect to see a slow yet steady improvement over the next 18 to 24 months.

For a customized look at your property as it relates to today’s marketplace or if you’d like our assistance in finding the perfect home here in the Grand Strand, contact us today!

greg@gregsisson.com
843-251-2693

Grand Strand Real Estate Market Update – March 2013

Watch on your mobile device >>

A consistent factor in nearly all the markets across the nation since late 2007 has been inventory and in many cases – too much of it. Whether this meant a large number of distressed sales, homes that just were not selling enough or buyers lacking confidence to buy – much of America went through a real estate downturn.

Distressed Property Inventory Lowest in Several Years

Today, that has changed. Not only is it a very active marketplace but also we are seeing a complete shift in trends whereas sellers now have the upper hand in lower to mid-level price ranges.

Consider this: just two years ago as much as forty percent of our available inventory was made up of short sales and bank owned properties. Today’s distressed property inventory has significantly reduced. Of our present-day 4,000 or so homes on the market right now, only 4% of them are bank owned foreclosures, which translates to about currently active 180 listings. For condos that number is even lower at just 3.3% of the approximate 3,500 available condos for sale being distressed properties.

Multiple Offers Are Artificially Inflating Prices

What was once very much a buyer-controlled marketplace has complete turned the tables – even for distressed properties. Buyers are up against a lot of competition, particularly in the $200,000 and under price bracket. It is necessary to be prepared to pay close to asking price for many of these homes given the high occurrence of multiple offer situations these days.

As demand continues to rise and inventory keeps dwindling downward buyers will be facing more and more of these situations where prices will be artificially inflated. So far the Fed has not done much to change interest rates and the expectation is that they will last at least a while longer. With fewer distressed properties competing with standard sales now is a great time for buyers to get in on the action.

Sellers Market for Homes Priced $200k and Under

With all the pent up demand from after the Presidential election and then the Fiscal Cliff issue – now there is a lot more consumer confidence and much more buyer activity in the marketplace. If you have been on the fence about selling – this is the time to jump off and consider listing your home before mainstream spring market sellers begin to list.
~
As always, we provide a market snapshot on our video blog but for a customized look at your own real estate outlook and goals, I invite you to visit us! We look forward to helping you achieve your goals!