Myrtle Beach Condos STILL Flying High!

Ran across this article today in the Wall Street Journal. Note that there are markets that are NOT slowing, and Myrtle Beach condos are part of that market that's still hot!


Investors back away from buying homes
Reluctance could stifle housing market

By RUTH SIMON
The Wall Street Journal

Individuals are pulling back from buying homes and condos as an investment, a move that could accelerate the cooling of the housing market.

Fewer people are competing to buy properties as an investment in heated markets such as Las Vegas, Miami, Phoenix, San Diego and Washington, D.C., real estate brokers and housing analysts say. Some investor-owned properties are returning to the market for sale. With the pace of price appreciation slowing, some investors who were betting on quick profits are instead being squeezed.

The apparent pullback by investors is recent and is just beginning to show up in national data. Evidence of the development also can be seen in a number of markets that had until recently been a hotbed of investor activity.

As speculators withdraw from the market in San Diego, for instance, the number of investors buying property has fallen by nearly half, estimates Russ Valone, president of MarketPointe Realty Advisors, which tracks the San Diego housing market.

In the Phoenix area, as many as 30 percent of properties for sale are owned by investors, said Jay Butler, director of the Arizona Real Estate Center at Arizona State University. Six months ago, most investors were buying rather than selling, he said. The shift has helped to drive up inventories of homes for sale in the Phoenix area, which climbed to 22,340 in October from 8,600 in April, according to data from the Arizona Regional Multiple Listing Service.

In the latest sign that the housing market is cooling, the National Association of Realtors said Tuesday that its index of pending home sales dropped 3.2 percent in October. The reading is the lowest since March.

It’s too early to tell just how a pullback by investors will affect the broader housing market, but their impact on the housing boom has been considerable.

Investors accounted for 9.6 percent of mortgages used to buy homes in the first nine months of this year, the most recent data available, up from 6.7 percent in 2002, according to LoanPerformance, a unit of First American. But the investor share began to drop in the third quarter, the firm said. The figures don’t include second homes that might also provide rental income and serve as an investment.

Myrtle Beach remains one of the nation’s top markets in investor-driven purchases, according to LoanPerformance. It said 18 percent of Myrtle Beach’s housing purchases in the first 10 months of this year were by investors, the 10th-highest rate among metro areas nationwide. The other areas were in California, Idaho, Oregon and Florida.

A softening in investor demand is likely to accentuate any slowdown in home sales, said David Berson, chief economist at mortgage giant Fannie Mae.

He estimates that home sales will fall 10.4 percent over the next two years, largely because of a decline in investor and second-home purchases.

Another concern is that investors will be quicker to sell if prices soften, accentuating any downturn, particularly in areas where speculation has been most prevalent. Some of the most vulnerable markets include Daytona, Fla., Las Vegas, Phoenix and Fresno and Bakersfield, Calif., according to Credit Suisse First Boston analyst Dennis McGill.