Market Update.
6.5 Months of condo inventory on the market currently.
At 6 months, we’re in a buyer’s market.
In other words, it will take agents in our market roughly 6.5 months to get all the inventory that’s currently on the market sold.
Sellers are being told this buy their agents. The agents are letting them know that the market has softened which is another way of saying that sells are happening at a slower pace. Instead of it taking 60 days to get a condo sold, now it’s taking on average 128 days for that same sell to take place.
What this means for you is that there’s a lot of competition among sellers for the buyer’s that are shopping the market.
Since seller’s know this, they are reducing their prices so that they don’t sell their neighbors unit.
Currently, there are 1,245 Oceanfront or Oceanview units on the market either with an active or pending status.
Great Resorts with Lots of Amenities Yet High Inventory.
Ocean Reef has 21 active listings on the market.
Caribbean Resort has 21 active listings on the market.
Landmark Resort has 41 active listings on the market.
Beach Cove Resort has 35 active listings on the market.
Compass Cove Resort has 32 active listings on the market.
Sand Dunes Resort has 19 active listings on the market.
Low Inventory at Great Resorts Might be a Clue to Value.
However, places like Dunes Village and Grand Atlantic, only have a limited number of listings on the market because inspite of how the market is doing, they stay in demand.
Dunes Village has only 5 listings on the market.
Grand Atlantic has only 1 listing on the market.
So Why are Seller’s So Desperate to Sell?
It's not that everyone is so desperate to sell. It's that there are some desperate sellers out there, and when there are, it serves as an excellent opportunity for investors.
I just helped an investor buy an oceanfront condo at Windemere for $100,000 under the last unit that sold at the resort! In other words, he bought and instantly has equity in the unit.
So, deals are out there, you just need a broker to help you find them.
Condo inventory is up right now which means there's a lot of competition over buyers so sellers are more likely to reduce their price. Is that always the case: no. Are our prices holding: yes.
Our market behaves differently than the rest of the nation because of all the demand we have. Think about it. With Babyboomers retiring at 10,000 per day and moving to Myrtle Beach and Florida, you couple that with the fact that US News and World Report ranks Myrtle Beach South Carolina as the fastest growing place out of the 150 most populated places in the entire United States, and we’ve had that rating for the past 3 years!
Our market is NOT like the rest of the nation. It’s a resort market and as long as people want to retire and live at the beach, then we’ll have the demand.
This is where you want to invest your money in my opinion. Not Florida, not New York, not Texas or California, but Myrtle Beach, South Carolina.
However, Our Market Has Been Softening.
There are a variety of reasons why sellers are selling: HOA dues have increased in some places due to insurance increases. But, as long as your Gross Rental Income (GRI) remains higher than all your expenses, and you're ultimately turning a good profit, who cares if the expenses increase some?
The tourists renting your unit are paying all the expenses and you’re turning a profit! So, don't let expense increases scare you. That's thinking about the investment narrow-mindedly.
You must look at the overall, the macro picture of your investment, or the life of your investment. Think about it in terms of ownership duration.
If you plan to own it for 10 years, then even if expenses increase a little, so long as you’re still turning a profit, who cares? Additionally, ask yourself, “What can I do to maximize my return? Can I remodel my unit and bring in an additional $5,000 annually to offset increased expenses? Can I run Google Ads to get my unit infront of more vacationers, have it rented more, increasing my occupancy and ultimately my profitability?”
Get serious in the game you’re playing. Run annual Facebook Ads to drive more views to your listing.
So long as at the end of 10 years, or the lifetime of your investment, you come clearing a great profit and you reap the benefit of all the years of appreciation, then you’ve won! Don’t let expenses increases that are marginal scare you.
Why the Flood of Inventory? Absentee Owners Equal Scared Sellers.
Many Sellers don't know how to successfully manage their units to turn a profit so rather than learn, they put their unit on the market.
Also, people that purchased before COVID have seen a significant rise in appreciation so they are selling to cash in.
Additionally, rental incomes have decline some, I emphasize SOME. Again, when the majority of oceanfront condo owners are NOT serious about managing their units because they pass it off to a property manager and forget about it, and incomes decrease a little, this scares them, and they sell.
But, for those that are serious about their investment, and manage it well, this is standard “Condo Ownership 101.”
Markets rise and fall, it's part of the game.
Naturally, some years are better than others, that's standard for any investment.
Are You the Savvy Investor that Wins?
But for those not really understanding how to run their unit, how to maximize their occupancy and ultimately their profit, that are honestly just absentee owners, they get scared when any change happens, whether it be an insurance increase, rental demand decreases, HOA dues increase, and they their unit on the market, making room yet again for savvy investors to pick up their units at cheaper prices and win at the oceanfront condo investing game!