Editor’s note: This is a two part series on the current state of the real estate market in Myrtle Beach. To learn more about what’s been causing the rapid rise of home prices, click here.
The Myrtle Beach housing market has exploded in the last year as more people trade out big cities for the South Carolina coast.
Real estate agents say eager buyers have started bidding wars, made risky purchases and inflated housing prices in ways that raise concerns about whether this current activity is sustainable — and importantly — whether it is making Myrtle Beach less affordable for those who live and work here.
Some of the behaviors are reminiscent of the 2008 financial crisis that destroyed home values around the country. While economists say that a repeat of that is unlikely, some unlucky individuals could still end up in dire financial straits if they are not careful.
These days, houses sell within a week of being put on the market, so it’s easy to wonder who, exactly, is moving to Myrtle Beach.
Well, people with a lot of money, to start.
The Grand Strand has long been a popular place for people to retire. You can see it every time a new retirement community pops up, or how some of the golf courses cater to older business professionals.
Many of the new South Carolinians come from the northeast, seeking out the state’s warmer weather, lower cost of living and low taxes.
“A lot of people love the beach,” said Renny Diedrich, South Carolina Association of Realtors’ vice president over Myrtle Beach. “A lot of people love the golf courses. We’ve got great natural resources that the other parts of the state don’t have.”
The Sun News interviewed people from Boston, Connecticut and New Jersey who have already bought a home this year in Myrtle Beach or plan to do so in the coming months. All of them said that despite the ever-rising home prices in the region, it’s still worth it to move here.
“It’s like the old snowbird scenario,” said Greg Harrelson, a real estate agent for Century 21. “The snowbirds used to be the person that’s no longer working. They’re just getting away for the winter. Now, the snowbirds can be somebody that is still working. They haven’t retired yet because they can work remotely.”
Geri Allia Allessandrini, from New Jersey, moved into a golf community on the north end of Myrtle Beach last weekend. She said she got lucky, her home buying process went smoothly. The seller accepted the first offer she and her husband made. At $220,000, her offer stood only slightly below the asking price of $224,900.
Despite selling a more expensive house back in New Jersey, Allessandrini said her new condo is actually “much bigger” than what she had before because of the astronomically high real estate costs up north. She said she’s visited Myrtle Beach for years and loves the community, so it’s where she and her husband decided to retire.
“We’re moving from Ocean City, New Jersey. Prices are through the roof. So we got much more than we would have ever gotten,” she said.
Some of the new buyers coming into Myrtle Beach don’t even plan to live here full time. Some are buying second homes, Luxury real estate agent Troi Kaz said.
Damion Vincent hoped to move here later this year from Connecticut, but the current real estate market has thrown a wrench in his plans. His current job can’t be done remotely, so he was hoping to buy several rental properties to replace that income instead.
Vincent and his wife bought their first Myrtle Beach rental properties in late 2019 and early 2020. They close in a week on their third property but wish they had acted much sooner before prices skyrocketed in the last year.
“When we got in the market, we thought it was kind of high at the time. That was nothing compared to what it’s been like in the last year,” he said. “There’s not really any end in sight.”
Now, Vincent said they feel like they have to act as quickly as possible any time they see a home they want, to ensure it doesn’t get snapped up.
“It’s something we can’t rush, but it sucks because you kind of have to jump on these properties really quick,” he said.
The 2008 housing crisis still burns on the minds of real estate agents in Myrtle Beach. Risky lending by banks led to the so-called “bubble” that nearly took down much of the financial industry.
Today, buyers are once again engaging in risky purchasing, but the fallout of those decisions will likely come down to individuals, rather than entire banks or lending institutions, Martin said.
“What’s different is you don’t generally have households that are overstretched,” Martin said. “At least, those who are looking to buy are coming into this with pretty healthy household balance sheets. So, you don’t have a housing market that looks fragile like it did then.”
Two main risky behaviors are dominating home purchases in the Myrtle Beach area, real estate agents said.
The first is that as bidding wars — or fear of them — grow in the housing market, people are buying houses for more than the home’s appraised value. That’s dangerous because once the housing market cools off, home owners could be “upside down” on their mortgage, meaning that people will end up owing more on their loan than the actual house is worth, Martin said.
Second, buyers are forgoing more extensive home inspections to speed up the sale process. This worries real estate agents the most because buyers could end up with a house in need of five- or six-figure renovations.
Fatal mistakes in either of those areas could lead to significant financial harm for the new homeowners moving to Myrtle Beach. However, Martin said that harm will likely only affect sporadic households, those in unluckier situations.
“It’s a risk for the individuals buying those homes,” Martin said. “It’s not as if all of a sudden a lot of households are facing homes that are in worse shape than they were a year or two ago ... They might end up overpaying for that house, but that means somebody got a good price for it.”
Home buying tips in Myrtle Beach
With all of the potential pitfalls in the Grand Strand’s real estate market right now, there’s a lot buyers (and sellers) need to keep in mind. Here are some tips from four real estate agents: Century 21’s Greg Harrelson; Troi Kaz, Director of Luxury Real Estate at Keller Williams Pawleys Island/Myrtle Beach; Morris Lyles, President of the South Carolina Association of Realtors; and Renny Diedrich, SC Association of Realtors’ vice president over Myrtle Beach.
Having a real estate agent is crucial, even if you think you don’t need one. For both sellers and buyers, now is “not the time to go it alone,” Kaz said, “you need an advocate.”
Don’t forgo walk-throughs and more extensive inspections. If you do, make sure your purchasing contract allows you to back out in case a home inspector discovers any major flaws. Agents recommend a $10k-20k cap.
If you are financially capable, be willing to make an offer above asking price or even above the home’s appraised value. Other buyers might be willing to do the same, and it’s easy to get outbid.
Know a friend who’s selling? They might be your best option. Some agents say that the best prices they’ve seen have been those sold without ever going onto the market.
Be willing to wait. The Federal Reserve said the current housing market won’t last forever, and prices could be more affordable in a year or two.
Consider allowing an extended lease-back. The people selling their homes also need somewhere to live, and they might not be able to move as soon as the sale closes. Some buyers recently have offered lease-backs as long as four months.