I'm not a realtor, agent, broker, seller, or even a buyer. I just do websites and real estate marketing and SEO advice, mostly to real estate agents.
In the Myrtle Beach real estate market right now, there are as many as 15 condo resorts going up at the same time. It takes about 2 years from sales release to closing, and there are numerous ones in different stages right now. I may be underestimating. Maybe there are 25-30 or even more that are either "reserved" or being purchased right now.
On average there might be 300 units in each building...usually 1, 2 or 3 bedroom units both on oceanfront and on the sides. Most often they will be furnished, so they'll all basically look alike.
Just to simplify, lets say out of the 300 there are 50 of each kind...(1 bedroom oceanfront, 1 bedroom oceanview, etc) So 50 of them are identical in most cases.
When a nice project is released, an company like New Resorts LLC in North Myrtle Beach can often sell them out in less than a week. It varies according to the project, location, and whether it's a new preconstruction or a hotel conversion. New construction often sells faster, although to me, a hotel conversion is the better deal...even though the units may be smaller.
Personally, (and I was a tourist for 30 years before I was a resident in Myrtle Beach) I think most vacationers are most interested in the location and the amenities...not whether their rooms have 400 sq ft or 700 sq ft. After all, they aren't going to live in them...just stay there for a week or less. Granted, if you are among those lucky enough to be able to afford to buy an oceanfront condo in a grand resort for your own personal enjoyment, then it matters. But even with that scenario, I've seen the majority of the owners still be more concerned with that rental income than they are with their family being less cramped for a week. Seldom do THEY stay more than a week at the time either...so it's all the same.
Again, I think a hotel conversion in Myrtle Beach is the best investment. My opinion. Take it for what it's worth. Find out what the rental income is on a one bedroom in Coral Beach Resort after it's converted, as versus a one bedroom in Avista Resort in Ocean Drive. Not a completely fair comparison due to their locations...but I'll bet there won't be alot of difference. Coral Beach units are 200K plus. Avista is probably 400K plus right now.
Anyway, back to my original subject...the way the condos are being built right now....
If there are even 10 resorts going up at the same time and they have 300 units, then that is 3000 condos that are for sale...or DOES IT?
A recent article in The Sun News, Condos Crowd Listings, drew quite a bit of attention from the people I know who are presently investing in preconstruction.
To quote:
More condominiums are for sale on the Grand Strand than at any
time in the past 10 years, according to the Multiple Listing
Service.
The increased supply was caused in part by a slowdown in
the frenzied condo market, leaving condos on the market longer, Realtors and
analysts say.
A clampdown by the Coastal Carolinas Association of
Realtors two months ago on agents who weren't entering listings also played a
role. Officials say that problem has been resolved, increasing the number of
properties on the service.
"A clampdown by the Coastal Carolinas Association of Realtors two months ago on agents who weren't entering listings also played a role." NO KIDDING!
Real estate investors are a breed apart. I know quite a few of them now. With preconstruction investing, it's not who you are or how much money you have, but who you know. The ones who do this do it for a living. They talk amongst themselves. They have made close friends with the largest developers. I would say that often over half of the best units in a preconstruction project are sold over the phone and on paper for 3 months before the project is even made public.
So now lets estimate that there are actually only 1500 of these units that will actually be offered to Joe Blow who casually looks in the MLS to see what's for sale this week.
But wait...maybe not. The internet is the hottest commodity to real estate sales that exists right now. I haven't seen the numbers lately, but MY OWN OPINION would be that a good 70% of all homes and investment properties are sold right now at least in part from internet exposure. I would even say in this area it could be as high as 80%. I deal with most of the most important real estate websites in the area, and I've seen several small Myrtle Beach condo rental companies become multi-million dollar real estate sales machines because of their website.
The many smaller investors out there have not formed a relationship with a developer...they don't even know the developers in a particular area. But what they have done is to get on the mailing list of this same top preconstruction marketing company (New Resorts) and every time a project is released, emails are shot out immediately announcing it, and notifying this group of its upcoming availability. I would estimate that another 50 units per project are reserved and no longer available from this method...again in only a day or two after release or sometimes BEFORE release. So there goes another 500 units. We're down to 1000. We've got 10 projects, so that's 100 units per project left, and maybe 6 kinds of rooms mixed in that. So let's estimate 17 units of each type per resort that are actually ON the market as it's being actively released.
Our local Board of Realtors just raised a stink and are demanding that preconstruction developers or marketers list all the units, INDIVIDUALLY in the MLS listings, every time they have a new project. That means listing the amenities, square footage, all the details on 3000 units at any given time. That also means maintaining them...removing the ones that are sold out of those individual listings. If they are sold prior to release, then they need to be listed and then marked sold and removed. It represents hours and hours of computer work, and a virtual paperwork nightmare. They are actually FINING the sales companies everytime they don't list a project. Some are reacting by withdrawing their membership to the local board...and I can't blame them a bit. It's a ridiculous situation...all so they can write articles about "bubbles" and spout statistics about prices escalating and foreclosures being emminent. Enter John Stossell on 20/20 or 60 Minutes or whatever show he's on, who tells all the masses that REAL ESTATE AGENTS are driving up costs of homes now. Utter crap.
Check a Myrtle Beach MLS listing for a condo right now and all you see are pages and pages of duplicate entries. The BOR is telling the world there are 3000 new condos for sale right now in Myrtle Beach. There's probably not 1/3 of that available. Joe Blow gets tired of trying to search for a condo by digging through 5 pages of the same thing. He may miss out on a nice investment condo. Nothing is accomplished, and nobody is helped except the BOR, and they may publish inflammatory statistics and dire warnings of impending markets crashing.
Yes, Virginia, there IS a bubble...and it's an AIR BUBBLE in the minds of the ones who set the rules and publish this kind of stuff.
Meanwhile, the investors are doing just fine, the developers are doing just fine, the public is getting scared to take advantage of the opportunity to make really good profits, and the agents are left to deal with the problem.
And to back up my rant, the Board of Realtors in Miami, which is 25 times the size of our Myrtle Beach market, has FORBIDDEN agents from listing preconstruction projects. Why? Because of exactly what I've talked about here.
Again, this is just my under-educated opinion. Take it for what it's worth. I can say this with pretty good authority. Articles like this one in the newspaper and on tv are half the problem. They can create a "bubble" almost by themselves just from insisting or even insinuating that there is one.
Though sales of older condos and houses have slowed in Myrtle Beach, preconstruction and new resorts are as strong as ever, and internet marketing is part of the equation...a big part. I truly believe that Myrtle Beach has the best investment real estate in the nation right now.
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