A few weeks ago, we invited you along on our tour of the North Carolina coastline. But one of the wonderful things about the Atlantic coast is that it spans both Carolinas. Won’t you join me as we continue our journey … through the 187 miles of South Carolina shoreline?
The Grand Strand
This 60-mile span of white sand beaches stretches from Little River to Georgetown and attracts 15 million visitors each year.
In the latest edition of Carolinas Market Update, I talk about confidence and its considerable impact on today’s real estate market. There are plenty of good reasons to be confident right now. Appreciating home values, more realistic comparables, and a modest increase in interest rates have consumers asking “when do I pull the trigger for my next life move?”
The “confidence factor” is key to a stable and healthy real estate market. As home values continue to appreciate, buyers have a returned confidence in knowing that they can sell their home at a certain price, and buy a home that will increase in value at the same or greater pace.
It is true the real estate markets in most, if not all, communities has greatly improved. But no matter how good the real estate market is, you need to take steps to insure the greatest likelihood of success whether you are buying a home or if you are selling your house. Here are three easy steps to help guide you to success:
1. Get pre-approved for your mortgage loan.
Today’s financing is complex so why take a chance finding your dream home and then realize you cannot get the loan? Many buyers get pre-qualified for the loan, which has no substantive verifications – it’s a snap-shot into the big picture of the buyer’s ability to get the loan based on what is said. A pre-approval takes more steps to verify all your income documentation and your debt-ratios qualify you for the loan in order to buy that dream home. With a pre-approval your offer is solid with only the appraisal of the property being the contingency – it’s like having a green light in a busy traffic intersection!
For sellers in the market, if you have priced your house right and have it in great condition, you could get multiple offers. If so, you want to look at those offers that have buyers with solid financing options, and in writing. In this improving market, you don’t want to take a chance on a buyer who hasn’t confirmed their financial ability to buy your house because you risk losing that buyer who does have good financing!
One of the real benefits of living in the Carolinas is the temperate climate coupled with the ability to travel and within a few hours visit gorgeous mountains and beautiful beaches. My daddy always told me it’s great to have friends with boats, mountain houses, and beach houses. That’s the best of all worlds. Many of us have always dreamed not only to have access, but to own a second home for future generations to enjoy.
Because of the economy and financial reforms, the secondary housing market has been impacted the hardest, second only to new home construction. To that end, if one has a nest egg or equity in their current home, the opportunity to take advantage and to own a second home is here. There will never be a time in history to strike better than now.
Many years ago, as a college student at a Big Ten school, my parents called to tell me they decided to build a house and retire in South Carolina. My first question to them was “Hilton Head or Myrtle Beach?” These were the only places I knew of in South Carolina.
Many years later, I’m raising a family and selling Greenville to newcomers’ everyday. Greenville doesn’t border a major lake, river, or ocean. It really isn’t in the mountains, but it is close. The weather isn’t tropical, nor does it have abundant amounts of snow. What Greenville does boast is being in a location where you can access the mountains, beaches, lakes and rivers all within a short drive. This convenience offers the best of all worlds, while also making Greenville an attractive place to settle down.
Right now, the residential real estate market is not lacking in sales activity. It is caused by fabulous interest rates, rock-bottom prices and an increase in demand. Thus far, the first two months of 2012 are 50-60 percent greater as compared to this time last year. All indicators for the Carolinas look at a healthy uptick in sales units this year. January and February are proving to be just that!
That being said, contract failures are proving to be a big deterrent in today’s market. After negotiating a contract in good faith, some sellers feel abused when they receive bad news from the inspector which, in turn, results in a low appraisal. A situation like that is incredibly frustrating and for many, it is the final straw.
A lack in buyer confidence, expectations on dates that have to be met and more stringent lending requirements are all potential roadblocks that we are faced with today. They are not however, the end of the world. Nevertheless, left uncontrolled, they contribute to the highest fall-through rates we have seen in a long, long time.
What is playing out in the Carolinas is that October 2010 was the bottom based on closed unit sales. The Allen Tate Companies closed over 14,400 properties in 2011 which is 400 more than 2010 and more than 2009 and 2008.
That supports the theory that we’ve hit the bottom and it’s onward and upward from here. The story is complicated by the fact that most of us measure recovery based on a home’s appreciation status.
The average sales price in 2011 for the Allen Tate Company’s footprint – the Triangle to the Upstate – was $217,000 versus $222,000 in 2010. I’m afraid 2012 will be the same — a bit more of a slide in values overall. While this is market and neighborhood specific, the fact is that we have an additional inventory of distressed properties to pass through the system. This process is taking longer than anyone anticipated and is coupled with the influence of the new home production that is taking place on shovel-ready lots.
Although it seems like only yesterday, I joined Allen Tate Relocation in 1999. Since then, I’ve heard numerous wonderful stories and shared some amazing memories with my colleagues. But I must say that one of my favorite stories is how Mr. Allen Tate got his start in sales (a relevant story given yesterday’s announcement about Chiquita moving their global headquarters to Charlotte, N.C.).
As a young boy, Mr. Tate spent time working in his father’s grocery store in Gaffney, S.C. It was there that he learned the value of customer service and a quality product. To help inspire motivation and determination, his father would give him challenges to complete in the store each Saturday. If he had not completed the challenge by 6 p.m., his father would approach him and ask, “Allen, did you truly work to sell that product to our customers?”
One particular Saturday, Mr. Tate walked in to find the front of his father’s store covered, floor to ceiling, with bananas. As he tells it, there were bananas as far as the eye could see. Apparently a train carrying the shipment of bananas had been delayed between Gaffney and New Orleans. Instead of discarding the over-ripe bananas, they were given to Mr. Tate’s father in the hopes that he could sell them all.