Greetings from the Grand Strand!
Here it is - the big 2016 oceanfront condo sales analysis! Stats on other resort condos (non-oceanfront) are also included.
Let's jump right into it.
Be forewarned that many of my comments are going to sound a lot like my remarks from each of the past several years' reports. The fact of the matter is that
the general trends have not changed much. There have, however, been interesting shifts in specific developments and segments of the market. I'll cover a few of those.
The first chart shows the number of closed oceanfront condo sales in each year since 2003. The numbers have been ridiculously stable for the past 7 years. There were 1259 closed sales in 2016 compared with 1223 in 2015.
No new condo towers have become available and no other big events have occurred to shake up the market.
The next two charts show the average closed sale prices and the median closed sales prices for the same years. The 2016 average price decreased from $201,809 to $183,234 compared to 2015 but the median price increased from $144,500 to $148,000. The averages and medians have been bouncing around in their same respective ranges for the past 7 years as well. Buyers are buying and sellers are selling but the equilibrium continues so prices are staying about the same market wide (although there are some subtle changes which I will talk about)
. These charts tell us more about the primary types of sales and the price ranges than they do about appreciation within specific buildings (as you can see in the next chart).
The next chart is a bit more interesting. This shows the oceanfront closed sales by price range. Sales in the $50K to $150K range have been plentiful and pretty stable
, probably the reason the median price has remained in this range (although, at $148K, it was the highest since 2010). In fact, almost half of all the sales in 2016 were in this range.
There have been changes in several price ranges. First, the number of sales under $50K has been dropping for years and the decrease was even bigger in 2016- probably because there are simply fewer available listings in this range each year.
Another segment of the market that saw a change was the $150K to $300K range. The number of sales in this range was up significantly.
This is actually
a continuation of a trend which started last year.
These numbers are supported by my own personal observations and experiences.
I'm encountering many more buyers with budgets in this range than I did a few years ago. Sales for condos above $400K remained relatively scarce.
One other noticeable change was that there were far fewer sales above $500K , which I attribute to the sell-out in 2015 of the remaining developer-owned inventory at North Beach Towers, which was accounting for most of these sales.
Note that numbers of sales, prices and other stats are often more dependent on supply (the number of available listings) than demand. Most people think sales increase and prices go up because more people want to buy. In reality, it often works from the other direction - the number of people willing to sell in a price range decreases or , in the case of the North Beach developer-owned condos, a supply source is exhausted . Regardless, a strong indicator of future price increases is a declining inventory and we are seeing this in segments of our market.
The next chart shows closed sales by number of bedrooms.
Incidentally, most 1BR condos are purchased by investors because they often produce the best returns. Also, the price points are attractive to many.
Both 1BR and 2BR sales increased while 3BR sales were down slightly. I think this is a supply/price issue rather than a demand issue. There are now far fewer available 3BR listings in the "sweet spot" $150K to $300K" price range than there were a year or two ago.
The next chart shows the percentages of financed sales versus cash sales. Although cash sales still dominated (60.98%), the number of financed sales continued to trend higher as they have for the past 4 years in a row. By the way,
financing is still readily available for almost all oceanfront condos - but it is highly specialized and not for amateurs. Contact me if interested.
The next two tables show the respective numbers of closed sales in selected oceanfront and non-oceanfront developments. Typically, the number of sales roughly corresponds to the number of units in a development
(the bigger the development, the more transactions). Also,
if there is new construction producing new residences, as is happening in Market Common, the numbers of sales will be high.
There were a few sharp changes which caught my eye. Long Bay Resort sales jumped from 7 to 24. I think the Long Bay 3BR condos had lagged the market and become undervalued (low $200s) and there was finally a run on them. The number of sales in North Beach Towers dropped from 40 to 13. This was clearly a supply situation. The developer-owned inventory, which had been fueling 40 to 50 sales per year, finally sold out.
I think the lesson to be learned from these abrupt changes is that unusually favorable opportunities don't last forever - market forces will eventually "correct" them.
This last chart shows the firm rankings for all of the real estate companies on the Grand Strand. As you can see
, RE/MAX Southern Shores (for the fifth straight year) led the area with over $356,062,270 in sales volume in 2016. We also led in number of unit sides (1884) overall and average sale price among the top 4 companies.
Well, that's the mega-report on 2016 oceanfront sales.
What doesn't really show up in the stats is that there are market leaders which are experiencing noticeable, if not always steady, appreciation. Inventory is shrinking and prices are subsequently edging up in a growing number of properties which are in high demand for one reason or another - popular developments, optimal floor plans and locations within buildings, unusually strong rental returns, etc.
So don't let the seemingly bland market stats convince you that you have all the time in the world to make that purchase or trade up into the property you really want -
the best properties (including the one you are going to want) will go up in values first.
Also, interest rates have already started rising and they are certain to increase more.
Each owners' and each potential buyer's situation is unique so please contact me if you are thinking of buying or selling. I'll be glad to work with you to develop your personalized plan to sell or your plan to buy.
That's it for now. All the usual reports are included as well as this month's Best Buys.
Come see me at the beach!