A new article came out today in Forbes Magazine (.com) about how the real estate market is going to continue to decline approximately another year, and listed the 10 worst places for price decline and buyer slowdown. As expected, Florida and California were the worst, with Las Vegas going right along as well.
Thankfully, they didn't find Myrtle Beach real estate worthy of mention. However, the market here is about as slow as it's ever been. Although interest is still steady, it appears buyers and investors are determined to wait and hope to find the lowest possible price before they buy. This is a repeat of the same mindset that prevented half of them from realizing the huge profits of the condo blast in 2005. By the time they finally decided to move, it was too late in the game, and either the project ended up being scrapped, or it did finish, but after the slowdown...leaving them holding on to an overpriced resort condo that they will have to bite the bullet and hold awhile until the market heats back up again.
Fortunately, with our huge vacation market and the well established condo management companies we have in Myrtle Beach, owners will always be able to make up a large part of their expense from rental income. I checked around in Florida over the last year or so, and they have very few good condo management companies like our excellent Condolux and Condo-World vacation rental companies.
Myrtle Beach golf packages are also a big advantage for obtaining rental income for owners. Even though several of our golf courses thought they were better off to close and try to get into the condo craze, we still a huge number of Championship golf courses which help to provide rental income in the cooler months.
I think Myrtle Beach foreclosures are going to become the "meat" of our industry soon. I saw on CNN tonight that one out of every 550 (rental) homes end up in foreclosure, and even RENTERS are being affected, finding themselves evicted simply because of bank foreclosure. That would be a tough pill to swallow.
Anyway, here are the worst 10 according to Forbes, and data compiled by Moody's Economy.com, a Westchester, P.A.-based research firm.
Weakest U.S. Housing Markets
Matt Woolsey, 10.05.07, 12:00 PM ET
Median home sale price: $144,600
Annual price change from 2006: -7.1%
Projected price change to 2008: -9.08%Other than the Gulf Coast, Michigan is the only state in which the local economy and jobs have shrunk over the last year. Economic forecasts for the coming year don't look good and the nation's highest projected delinquency rate won't help.
Median home price: $396,800
Annual price change from 2006: -0.3%
Projected price change to 2008: -8.22The area's projected sales rate increase and tightening of unsold inventory are the result of sellers slashing prices to unload their homes.
3. Las Vegas
Median home price: $307,900
Annual price change from 2006: -3.6%
Projected price change to 2008: -9.11%Las Vegas' problems are largely the result of speculative buying and risky loans.
4. Los AngelesMedian home price: $593,000
Annual price change from 2006: 2.9%
Projected price change to 2008: -4.05%
Three consecutive quarters of price growth have masked many of L.A.'s credit and sales rate problems. Based on the area's faltering sales rate, buyers are willing to sit on the sidelines until the market sorts itself out.
5. Sacramento, Calif.
Median home price: $356,500
Annual price change from 2006: -6.3%
Projected price change to 2008: -7.9%
Sacramento was a hotbed of speculation at the tail end of the housing boom. Now there are simply too many unsold homes on the market and sellers looking to unload property are stuck in one of the nation's strongest buyers' markets.
Median home price: $264,800
Annual price change from 2006: -2.7%
Projected price change to 2008: -7.8%The Phoenix market has overexpanded. Its projected sales rate and housing turnover rate are in the middle of the pack nationally, but that isn't enough to overcome the area's bloated inventory and lack of buyers.
7. Orlando, Fla. (*originally combined with Ft Lauderdale)Projected price change to 2008: -8.03%South Florida's housing market continues to drag on the local economy. Orlando's projected sales rate is much higher than other South Florida cities and therefore is likely closer to a price trough.
8. Fort Lauderdale, Fla.
Median home price: $384,400*
Annual price change from 2006: 2.0%*
Projected price change to 2008: -4.05%Like Miami, Fort Lauderdale had a high share of second home buyers and speculators looking to flip properties and using risky loans for financing. The market has to experience significant correction before it can bounce back.
9. Tampa, Fla.
Median home price: $222,700
Annual price change from 2006: -3.8%
Projected price change to 2008: -5.5%
As late as 2005, nearly a quarter of the buyers in the Tampa market could be considered investors, according to Moody's Economy.com. A high share of investors means that when things go sour, prices decline quickly as they attempt to flee.
Median home price: $384,400
Annual price change from 2006: 2.0%
Projected price change to 2008: -3.7%A perfect example of how much more to a market there is than short-term price growth. Miami values have increased over the last year, but the lending situation is a mess.2. Riverside, Calif.