Homebuyers are flooding Myrtle Beach with “dangerous” purchases. who are they?

Editor’s Note: This is a two-part series on the current state of the Myrtle Beach real estate market. To find out more about the causes of home price spikes click here.

Myrtle Beach’s housing market exploded last year as more people exchanged big cities for the South Carolina coast.

Realtors bid in ways that enthusiastic buyers raise concerns about whether this current activity is sustainable and, importantly, whether Myrtle Beach will be affordable to the people who live and work here. He says he started the war, made dangerous purchases, and soared home prices.

Some actions are reminiscent of the 2008 financial crisis that destroyed housing values ​​across the country. Economists say it’s unlikely to be repeated, but some unlucky individuals can suffer disastrous financial difficulties if they’re not careful.

Nowadays, homes sell within a week of being put on the market, so it’s easy to wonder exactly who is moving to Myrtle Beach.

Well, let’s start with someone who has money.

Grand Strand has long been a popular place for people to retire. You can see how each new retiree community emerges, or how some of the golf courses serve older business professionals.

Many new South Carolinas come from the northeast and demand the state’s warm climate, lower living costs, and lower taxes.

“Many people love beaches,” said Lenny Diedrich, Vice Chairman of Myrtle Beach, South Carolina Real Estate Agents Association. “Many people love golf courses. They have great natural resources not found anywhere else in the state.”

Sun News interviewed people in Boston, Connecticut, and New Jersey who have already bought a home in Myrtle Beach this year or plan to buy one in the coming months. All of them said it was worth moving here, even though home prices in the area continued to rise.

“It’s like an old Snowbird scenario,” said Century 21 realtor Greg Harrellson. They are just running away for the winter. Now Snowbirds could be someone who is still working. I haven’t retired yet because I can work remotely. “

Originally from New Jersey, Geri Allia Allessandrini moved to the golf community at the northern end of Myrtle Beach last weekend. She said she was lucky, the process of buying her home went smoothly. The seller accepted the first offer made by her and her husband. Her offer was $ 220,000, just below the asking price of $ 224,900.

Despite selling back more expensive homes in New Jersey, Alexandrini said her new condo is actually “much bigger” than before due to the astronomically high cost of real estate in the north. It was. She and her husband decided to retire there because she said she had been to Myrtle Beach for years and loved the community.

“I’m moving from Ocean City, NJ. The price goes through the roof, so I got a lot more than I’ve ever had,” she said.

Some new buyers coming to Myrtle Beach haven’t even planned to live here full-time. Some people are buying a second house, according to luxury realtor Troy Kaz.

Damion Vincent wanted to move here from Connecticut later this year, but the current real estate market has thrown a wrench on his plans. His current job cannot be done remotely, so he wanted to buy some rental properties instead to replace his income.

Vincent and his wife purchased their first Myrtle Beach rental property in late 2019 and early 2020. The third property will close in a week, but I wanted to act faster before last year’s prices soared.

“When we entered the market, we thought it was a bit expensive at the time. It was nothing compared to last year’s situation,” he said. “I can’t see the end.”

Now, Vincent said that whenever they see the house they want, they feel they must act as soon as possible to keep the house from breaking.

“It’s something we can’t rush, but it’s terrible because you have to jump to these properties really fast,” he said.

Dangerous purchase

The 2008 housing crisis is still burning in the hearts of Myrtle Beach realtors. High-risk lending by banks has led to so-called “bubbles” that have nearly destroyed much of the financial industry.

Today, buyers are once again engaged in risky purchases, but the outcome of those decisions is likely to result in individuals rather than banks as a whole or lenders, Martin said.

“The difference is that, in general, there are no households that have gone too far,” Martin said. “At least those who are considering buying are entering this with a fairly healthy household balance sheet, so there is no fragile housing market like it was back then.”

According to realtors, two major dangerous behaviors dominate home purchases in the Myrtle Beach area.

First, as the bidding war (or fear) spreads in the housing market, people are buying homes for more than the value of the home. This is dangerous, according to Martin, as homeowners can “upside down” their mortgages as the housing market cools, borrowing more than the actual value of the home.

Second, buyers are refraining from more extensive home inspections to speed up the sales process. This is most worrisome to realtors, as buyers can end up with homes that require 5- or 6-digit home remodeling.

A fatal mistake in any of these areas can cause serious financial damage to new homeowners moving to Myrtle Beach. However, Martin said the harm is likely to affect only sporadic, unfortunate households.

“It’s a risk for individuals who buy those homes,” Martin said. “Suddenly, not many households are facing worse homes than they were a year or two ago.They may end up paying a lot for the house, which means someone got a good price for it. “

Tips for buying a home in Myrtle Beach

Today, the Grand Strand real estate market has all the potential pitfalls that many buyers (and sellers) need to be aware of. Here are some tips from four realtors: Century 21 Greg Harrellson. Troikaz, luxury real estate director at Keller Williams Pauly’s Island / Myrtle Beach. Morris Lyles, Chairman of the South Carolina Real Estate Agents Association. Lenny Diedrich, Vice Chairman of the SC Real Estate Agents Association in Myrtle Beach.

  • Even if you don’t think you need a real estate agent, having a real estate agent is very important. For both sellers and buyers, “it’s not time to go alone,” Kazu said, “you need supporters.”

  • Don’t forget walkthroughs and more extensive inspections. If so, make sure your purchase contract can be canceled in case the home inspector finds a major defect. Agents recommend a cap of $ 10,000 to $ 20,000.

  • If you are financially competent, you are willing to offer above the asking price, or even above the valuation of the house. Other buyers may be willing to do the same, and it’s easy to overpriced.

  • Do you know your friends for sale? They may be your best option. Some agents say that the best price they’ve seen is the one that was sold without going on the market.

  • please wait. The Federal Reserve Board said the current housing market will not last forever and prices could be more affordable in a year or two.

  • Consider allowing an extended leaseback. People who sell their homes also need a place to live and may not be able to move as soon as they are sold out. Some buyers have recently offered a four-month leaseback.