Why Is Our Market Going Up and Down So Quickly?

Today I’m here with the craziest market update yet. Our real estate market has seen some high highs and some low lows recently, and I’ll explain what those numbers mean to you.

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Today I’m here with the craziest market update yet. Lately, we’ve seen huge ups and huge downs. What is going on?

First of all, single-family home sales are down 25.2% from last month. Why the sudden drop? The hurricane came through. There were a lot of pending sales and after the hurricane ended, the banks ordered second appraisals to make sure the structures were still there. As a result, a lot of deals that were supposed to close last month ended up closing this month, which is probably why that significant drop happened.

Now, our market was probably set up for a small decline anyway. Last month, sales were down 9.4%, so we will see how that plays out over the next month. The good news is that sales are up 2% year to date. Closing prices are up 0.3% for the month, which is not a huge increase. However, sales prices are up 3% overall and currently, rest at $211,000.

If you look at the new construction market, though, there are a few alarming numbers. New construction prices are up 10% and the resale market was actually down 4.5% last month. That is the first time we’ve seen an actual decline in the resale market. We may see a slight dip in the first quarter of 2017, but it is hard to say what will happen in the real estate market right now thanks to the election results.

You need to work with a real estate expert in this market.

Condo inventory remained stable compared to 2015, although condo sales decreased by 10.1% from the previous month. Again, that is probably due to the hurricane. Year over year, condo sales are actually up 7.4%. The condo market had a very strong second quarter this year. The median sales price only dropped by 0.4%, at $121,500. Year to date, the median sales price is up 3.7% and sellers can net 92% of their asking price.

Residential lot sales were down 50.4% compared to October 2015, and they are down 11.3% year to date. The housing market has faced a crazy challenge with inventory, and the new construction market has definitely been impacted. However, the median sales price increased 60.3% year over year and is up 5.6% year to date. Sold to list price ratios are up to 83%. Builders are looking for land to develop, and the shortage of inventory has caused prices to go up.

What do all of these numbers mean for you? Ultimately, you need to find an agent who is an expert in the field. We study this market all day, every day so that we can get you the best deal as a team. We will keep an eye on these trends going forward and we feel very bullish about the market in January.

If you are thinking about buying a home, keep an eye on that inventory jump we usually see after January 1st. Next spring, we may see some weakness in prices, but again, due to the election results, that could change.

If you have any specific questions about our current market, just give me a call or send me an email. I would be happy to help you!

Click below for the detailed report:

Grand Strand Monthly Market Report October 2016

What to Expect in Real Estate with the Aftermath of the Election

Today, I’ll go over how a Trump presidency will impact the real estate market. Specifically, we’ll discuss down payments, interest rates, Fannie Mae, Freddie Mac, new construction, and more.

Looking for a Myrtle Beach home? Click here for a Full Home search

Selling Your Myrtle Beach home? Get a free Home Price Evaluation

Everybody in the world is asking about the Trump effect on the real estate market, so I did some research in order to give you an idea of what will happen to the market over the next year. I have to say, I feel very bullish about the 2017 real estate market, and so do many of the experts.

From a policy standpoint, a Trump presidency could be a real boon for buyers who have been struggling to come up with a hefty down payment. Trump has promised tax cuts which, combined with shrinking the brackets down from seven to three, will make it easier for buyers to come up with a down payment.

These tax cuts should also help boost the luxury market, which has been struggling nationwide over the last couple of months. Many experts feel that the promised tax breaks will reenergize the luxury market.

We’re feeling very bullish about the 2017 real estate market.

However, many people are wondering what will happen to Fannie Mae and Freddie Mac. Many Republicans want to shrink Fannie Mae and Freddie Mac, or do away with them completely. If Fannie and Freddie don’t survive the Trump administration, it would be very unfortunate for the real estate market. Those government-backed loans are pivotal to getting 30-year fixed rates for everyone who wants to buy a home.

So why do away with these institutions? Critics claim Fannie and Freddie made some bad business business decisions in the past to buy subprime mortgages and create an internal hedge fund. Although Fannie and Freddie have made significant management changes and repaid all the taxpayer bailout money, Republicans may want to do away with them to punish these institutions for their past errors.

Today, Fannie and Freddie are led by technicians providing a government guarantee on soundly-written mortgages. If there is anything wrong with these institutions, it could be that the guaranteed fees are too high and should be reduced. If Fannie and Freddie are abolished, then mortgages will be much more expensive as 30-year fixed rate products disappear from the market.

You may remember that commercial lending fell 90% during the market crash because there are no government guarantees for this product. Imagine what the housing market would be like if there was 90% reduction in home buying. Ultimately, Fannie Mae and Freddie Mac help smooth the financial market.

Now, what will happen to the Dodd-Frank Act? Dodd-Frank has over-regulated a lot of aspects in the real estate industry. In fact, Dodd-Frank created many delays and hurdles for buyers, sellers, borrowers, lenders, and agents. I think this law was written by people who had good intentions but don’t understand the day-to-day operations of the real estate market.

Changing the Dodd-Frank Act would definitely help smaller banks, which don’t have the resources to handle all of the extra regulation that came with this law. If the regulatory burden gets lifted, small banks can make more loans and boost home building activity, which we definitely need as the housing shortage continues.

The Consumer Financial Protection Bureau may undergo some changes during the Trump administration as well. Right now, there are not many checks and balances for the CFPB. In the past, it was unclear what was right and wrong between the mortgage industry and the real estate industry.

A combination of tax cuts and government spending will provide a boost to the economy in the first half of 2017, which should also lead to higher interest rates.

There could be less zoning regulations for new construction builders. Builders have seen prices go up due to all of the extra regulation from the government. Less regulation should open up the new construction market quite a bit.

We may see less natural disaster relief in the future as well. Right now, the program is $24 billion in the hole. The current flood map for federal insurance is outdated, so that would be improved so that better risk assessments could be made.

We will see tax code reforms. Commercial real estate depreciation will be a big issue, because Trump used that code to minimize his tax payments.

The stock market will experience huge highs and lows as these policies take place. You need to pay attention to the stock market because it directly impacts the bonds market, which affects interest rates. We may also see some changes with the Fed; Janet Yellen may be asked to step down.

Overall, though, I feel very good about the 2017 real estate market. New construction will be up, the luxury market will be reenergized, and buyers will be more able to afford down payments. Interest rates may increase, but we have been talking about that for awhile now. It’s impressive they’ve been so low for this long already!

If you have any other questions about our real estate market, just give me a call or send me an email. I would be happy to help you!

What to Expect in Real Estate with the Aftermath of the Election

Today, I’ll go over how a Trump presidency will impact the real estate market. Specifically, we’ll discuss down payments, interest rates, Fannie Mae, Freddie Mac, new construction, and more.

Looking for a Myrtle Beach home? Click here for a Full Home search

Selling Your Myrtle Beach home? Get a free Home Price Evaluation

Everybody in the world is asking about the Trump effect on the real estate market, so I did some research in order to give you an idea of what will happen to the market over the next year. I have to say, I feel very bullish about the 2017 real estate market, and so do many of the experts.

From a policy standpoint, a Trump presidency could be a real boon for buyers who have been struggling to come up with a hefty down payment. Trump has promised tax cuts which, combined with shrinking the brackets down from seven to three, will make it easier for buyers to come up with a down payment.

Trump should also help boost the luxury market, which has been struggling nationwide over the last couple of months. Many experts feel that the promised tax breaks will reenergize the luxury market.

We’re feeling very bullish about the 2017 real estate market.

However, many people are wondering what will happen to Fannie Mae and Freddie Mac. Many Republicans want to shrink Fannie Mae and Freddie Mac, or do away with them completely. If Fannie and Freddie don’t survive the Trump administration, it would be very unfortunate for the real estate market. Those government-backed loans are pivotal to getting 30-year fixed rates for everyone who wants to buy a home.

So why do away with these institutions? Critics claim Fannie and Freddie made some bad business business decisions in the past to buy subprime mortgages and create an internal hedge fund. Although Fannie and Freddie have made significant management changes and repaid all the taxpayer bailout money, Republicans may want to do away with them to punish these institutions for their past errors.

Today, Fannie and Freddie are led by technicians providing a government guarantee on soundly-written mortgages. If there is anything wrong with these institutions, it could be that the guaranteed fees are too high and should be reduced. If Fannie and Freddie are abolished, then mortgages will be much more expensive as 30-year fixed rate products disappear from the market.

You may remember that commercial lending fell 90% during the market crash because there are no government guarantees for this product. Imagine what the housing market would be like if there was 90% reduction in home buying. Ultimately, Fannie Mae and Freddie Mac help smooth the financial market.

Now, what will happen to the Dodd-Frank Act? Dodd-Frank has over-regulated a lot of aspects in the real estate industry. In fact, Dodd-Frank created many delays and hurdles for buyers, sellers, borrowers, lenders, and agents. I think this law was written by people who had good intentions but don’t understand the day-to-day operations of the real estate market.

Changing the Dodd-Frank Act would definitely help smaller banks, which don’t have the resources to handle all of the extra regulation that came with this law. If the regulatory burden gets lifted, small banks can make more loans and boost home building activity, which we definitely need as the housing shortage continues.

The Consumer Financial Protection Bureau may undergo some changes during the Trump administration as well. Right now, there are not many checks and balances for the CFPB. In the past, it was unclear what was right and wrong between the mortgage industry and the real estate industry.

A combination of tax cuts and government spending will provide a boost to the economy in the first half of 2017, which should also lead to higher interest rates.

There could be less zoning regulations for new construction builders. Builders have seen prices go up due to all of the extra regulation from the government. Less regulation should open up the new construction market quite a bit.

We may see less natural disaster relief in the future as well. Right now, the program is $24 billion in the hole. The current flood map for federal insurance is outdated, so that would be improved so that better risk assessments could be made.

We will see tax code reforms. Commercial real estate depreciation will be a big issue, because Trump used that code to minimize his tax payments.

The stock market will experience huge highs and lows as these policies take place. You need to pay attention to the stock market because it directly impacts the bonds market, which affects interest rates. We may also see some changes with the Fed; Janet Yellen may be asked to step down.

Overall, though, I feel very good about the 2017 real estate market. New construction will be up, the luxury market will be reenergized, and buyers will be more able to afford down payments. Interest rates may increase, but we have been talking about that for awhile now. It’s impressive they’ve been so low for this long already!

If you have any other questions about our real estate market, just give me a call or send me an email. I would be happy to help you!