Woah. Talk about a meltdown!
Recent reports reveal that residential real estate sales are down drastically as are housing values in Myrtle Beach, South Carolina. The Sun News reports that “the census tract stretching from Eighth Avenue North to 21st Avenue North, experienced an 89.7 percent decline in the number of home loans and an 87.2 percent decline in the dollar amount of those loans from 2006-2008.”
Other neighborhoods are struggling as well, “the Forestbrook area, where a number of new inland subdivisions have started in recent years, also was hit hard by the real estate bust. The number of home loans declined 85.4 percent from 2006-1008, and the dollar amount of those loans dropped 83.1 percent during that period.”
Other area stats are equally alarming. Not only are sales down but the housing values have had the rug ripped out from underneath them. Banks are getting burned as speculators looking to flip condos and houses have struggled to stay current on payments and many have defaulted altogether.
“When the bubble burst, it was like a light switch in our area and the market stopped as fast as you can turn the light from on to off.”
Myrtle Beach Real Estate blogger, Jeremy Blanton of Coldwell Banker said that “flippers were buying today for $150,000, placing on the market before the deal even closed for $200,000 and selling for $225,000. This with the banks that gave them the loans to do this cause the huge growth in home values here. Some “investors” were doing this with 5-6 properties at a time. In addition, they were building a surplus of supply of property faster than the demand for our area. When the bubble burst, it was like a light switch in our area and the market stopped as fast as you can turn the light from on to off. All those lenders, and owners were stuck with properties that they could not sell anymore. And everyone decided at the same time that they needed to sell. So inventory in the condo buildings went from 1-3 units to over 30 in less than a 2 month period.”
Tom Royce of the Real Estate Bloggers notes, “try comparing this to the hardest hit areas of Florida or Phoenix and you may be surprised. I think there are many pockets of home sales devastation affecting both home prices and the incomes of real estate agents. For the industry volume is even more important than pricing. One can make money even if pricing is off, but no one earns if the market is non existent.”
This is bubble real estate at its worst. Blanton said that he has “seen hundreds of agents call it quits. I remember hearing from one of my local MLS people that in December of 08 they had over 800 agents turn in their lockboxes in that month.” We’ll most certainly be seeing this city as a case study in Real Estate college courses within the next few years- this is pretty drastic.