The boost in sales last year will help to clear foreclosures from the market, which will help prices stabilize more quickly, he said.
Foreclosures and short sales – which typically sell for less than non-distressed properties – are selling at a faster rate, according to a recent report by Site Tech Systems, a local company that tracks the real estate market.
About 20 percent of single-family homes listed for sale were distressed properties, but the foreclosures and short sales made up 30 percent of all single-family homes sold in 2011. About 18 percent of condo listings in 2011 were distressed properties, and about 35 percent of all condos sold were distressed, according to Site Tech.
Marvin Heyd, the owner of Prudential Myrtle Beach Real Estate, said he was pleased with 2011 sales.
“I really believe that the single family [home] market has reached its point and is starting to turn around,” he said, adding that the condo market still has a way to go.
Sales should continue to improve this year as more retirees are moving to the area, Heyd said.
The upward trend in sales is a good indicator for the market, said Rod Smith, the director of general brokerage at Coldwell Banker Chicora Real Estate.
“2011 started off slow but gradually we saw inventory dropping and we saw buyers coming back into the market with an upward trend in sales that’s good news for everybody,” he said.
The problem continues to be that sales prices are driven down by foreclosures and short sales, Smith said.
The median price of a single-family home sold in 2011 was $162,500, down 6 percent from 2010, according to the MLS. Condo prices saw an even bigger drop in price, 10 percent, to a median price to $107,900, according to the MLS.
“Prices continue to drop because we are not out of the foreclosure crisis. Until we clear all of this inventory we will see prices continue to drop in large portions of our market,” said Radha Herring, the broker-in-charge of Watermark Real Estate Group. Some segments of the market, like beachfront homes, where there is a limited supply of properties will stabilize more quickly, she said.
Foreclosures will continue to be a part of the market this year and may even increase, Herring says, in part because of additional regulation and a foreclosure halt in 2011, that delayed many of the procedures.
Many of the buyers purchasing those low priced properties are paying in cash at a higher rate than they have in the past.
In 2011, 50 percent of the properties sold were paid for in cash, about 42 percent were paid for using conventional financing and the remainder financed through agencies such as the Federal Housing Administration or Veterans Affairs.
At Watermark about 60 percent of all sales were paid for in cash, in large part because it is difficult to finance condo-hotel properties, Herring said. Cash is being used to buy other properties as well, especially when potential buyers get in bidding wars and want to make their offer stand out, she said.
Cash sales may continue to account for half of all sales this year, she said. Smith said there are still a lot of untapped cash buyers so he could see that trend continuing as well.
“We have never seen 50 percent cash [buyers] in our market here and it is phenomenal,” he said.
There are so many cash buyers in large part because lenders are still cautious and not making many loans, especially for condos, Smith said.
Greg Sisson, vice president of the Hoffman Homes division of The Hoffman Group, said that banks seem to be lending a bit more than they were in the past couple years, and some local banks are even doing some condo-tel loans.
“As financing loosens up it’s huge for our market because prices are so good and people would like to buy,” he said. There are some buyers that aren’t able to buy now because they can’t get financing, Sisson said.
A boost in the number of sales, will help reduce the amount of properties in the market, which will help stabilize the market, especially prices, he said.
It is likely that more properties will be sold this year than in 2011, but prices may continue to drop or, at best, stabilize and stay level, Sisson said. Buyers are also typically more hesitant in election years, so that may slow fall sales and limit market improvements, he said.
“I expect this year to look exactly like last year,” Sisson said.