Myrtle Beach Real Estate Market Outlook 2020
Jeremy Jenks is a partner and Vice President of Sales for Keller Williams The Trembley Group, the premier real estate company located in The Market Common of Myrtle Beach. Jeremy is one of Myrtle Beach and the Grand Strand’s most successful Realtors. In his eight years as a Myrtle Beach and Grand Strand Real Estate Professional, Jeremy has helped more than 400 families find their dream home. In eight years, during good times and bad, beginning in the midst of the last recession, Jeremy has produced a sales volume in excess of $75 million.
Jeremy Jenks has created a dynamic training program for new agents, which provides a blueprint for instant success. His primary focus with Keller Williams The Trembley Group has been giving back to new agents so they can learn from his path to success.
Jeremy’s experience in the Myrtle Beach Real Estate market combined with his analytical and studious nature has given him a remarkable ability to forecast and predict local real estate trends. Anyone interested in tracking his accuracy need only look at the Keller Williams The Trembley Group Blog for his past forecasts. Jeremy Jenks has gazed into his crystal ball and this is what he thinks 2020 has to offer.
The Big Picture
Mortgage Rates Will Stay Low – Maybe Go Lower
Mortgage rates currently sit at 3.75%, according to Freddie Mac’s most recent numbers. That’s nearly a 1% difference from the monthly average a year ago. The drop in rates caused a surge in refinancing over the last few months, but purchase activity ticked up as well.
“Forbes Magazine reports a consensus among the mortgage finance experts,” according to Jenks, “that rates will remain low next year. My best guess is somewhere between 3.7% and 3.9.” That prediction is in keeping with forecasts from Freddie Mac and the Mortgage Bankers Association. Both predict 2020 rates within this range. Fannie Mae actually predicts rates will be even lower, ranging between 3.5% and 3.6% throughout the year.
Jenks says the low rates will let homebuyers “afford more house than they could have otherwise afforded” and that always drives the market.
Prices will keep on rising Nationally
Nationally, home prices will continue their upward climb largely due to continued tight inventory and high demand.
According to the latest home price forecast from property data firm CoreLogic, home prices could rise by 5.6% by next December, up from the 3.5% jump we saw this year.
“Right now we aren’t seeing a ton of new listings. Without more listings coming on the market, there will be more competition starting off in early 2020 and that’s another factor that will lead to more price pressure,” Jeremy says.
“The price pressure will be worse on the lower end of the price spectrum,” says Jeremy. “Entry-level home prices will likely rise higher than incomes next year. An overall tight market, low-interest rates, and a shortage of starter homes will continue to push up prices. This is especially the case for lower price points since builders have tended to focus on more expensive, higher-profit houses and less on replenishing inventories of lower-end, entry-level homes.”
It seems the price growth may continue beyond 2020, too. Data from Arch MI shows the chance of home price declines at a mere 11% for the next two years. There are currently no states or metro markets projected to see prices declines in that period.
Inventory Will Be Tight
Housing inventory will be limited for much of 2020, Jenks says. “The low-interest rates combined with record-high homeownership tenures are a big part of the problem,” says Jenks.
According to recent data from Redfin, the average homeowner is staying in their home for 13 years. That’s up from just eight years in 2010. In some cities, homeownership tenures are as high as 23 years.
As Jeremy Jenks explains, “You can’t buy a house if it isn’t for sale.”
“While historically low rates increase buying power and make it a lot easier for homebuyers to achieve their dream of homeownership, the low mortgage rates also increase the risk of a long-run housing shortage. We think the shortage will continue through 2020 and possibly intensify,” Jeremy says. “Historically, the rates are really pretty amazing. While first-time buyers lock-in the historically low rates and existing owners refinance – and they’re doing so in droves in recent months, everyone is content to stay put and not sell. Where’s the incentive to move?”
There’s a small chance that an increase in new construction may offer a little relief. Last month’s construction report from the Census Bureau reported both building permits and housing starts increased over the year. Builder confidence was also at a nearly two year high, according to the National Association of Home Builders.
“That still may not be enough to meet the demand from today’s buyers,” says Jenks.
“Builders have good reason to be cautiously optimistic. Given the pent-up demand from the solid economy and low mortgage rates,” he says, “the pace of new construction is still lagging historic norms, and it will likely take a good many months before new construction volume can support the demand.”
The South Carolina Economy
Overall, South Carolina’s economy is expected to be stable if not strong in 2020. The state’s economy is export-driven and the South Carolina economy will likely slow a little due to trade tensions with both Europe and China. South Carolina mainstays like BMW, Volvo, Mercedes, Michelin, Samsung, and Boeing are likely to be affected. However, the economy is expected to remain strong with overall state employment growth of 1.5%. South Carolina business leaders are still banking on the global economy by deepening the Port of Charleston to accommodate larger ships. The port deepening project is expected to be finished in 2020.
South Carolina is still proving to be effective at attracting new investment: Google will expand its Berkeley County data center, Eclipse, its industrial automation systems. New facilities will be built by shipper DHL, software company Valantic, and auto glass Fuyao. “Overall, the politicians in Columbia are doing a good job at keeping state taxes low and offering incentives to new industry. New industry creates jobs and jobs are one of the factors that drive the residential real estate market.”
The Myrtle Beach Economy
The Myrtle Beach and the Grand Strand area was hit hard from Hurricane Florence last year, but the area and its economy have almost fully recovered. Tourism, retirement communities, and manufacturing are still supporting the Grand Strand’s growth. Housing price growth is strong all along the coast but especially in Myrtle Beach and along the Grand Strand. Job growth in the Myrtle Beach area has cooled a bit from last year but is still strong. The area’s low property taxes continue to be a strong attraction for area residents and companies.
“I think the city leaders are committed to keeping real estate taxes as low as possible,” says Jenks.
“Many folks cite low property taxes as a major motivator for moving to the Grand Strand,” says Jeremy. “A couple of months ago, I sold a retirement home to a couple from Hartford, Connecticut. Their Connecticut property taxes were just a little more than $33,000 per year. My clients said their taxes today were almost more than they originally paid for the property.” Taxes on their comparably assessed property in Myrtle beach amounted to less than $5,000.
The latest report on the housing market from South Carolina REALTORS through Aug. 10 shows the real estate market is still going strong, indicating positive growth over the last month and the last decade.
According to the report, July marked the largest continuous economic expansion at 121 straight months of gross domestic product growth. That breaks the record of 120 months of continuous economic expansion set back in the 1990s. “This means that the economy has continuously improved every month for the past decade,” says Jenks. “That economic growth is also reflected in the Myrtle Beach real estate market.”
In a WMBF News interview, Laura Crowther, CEO of Coastal Carolina Association of Realtors, said closed home sales were up about 5 percent last month, with a total of 8,868 single-family properties sold in 2018. The sale prices have continuously grown and that is another indicator of a healthy housing market.
Pending sales also increased by 10.3 percent and inventory by 2.2 percent during the same period. The median sales price strengthened by 6.6 percent to $233,424.
“At Keller Williams The Trembley Group Real Estate, the one thing that we noticed that was particularly noteworthy was a continuing strengthening of the real estate market over the summer months,” said Jeremy Jenks.
“And for the third year in a row,” says Jenks, “the U.S. Census Bureau ranks the Myrtle Beach/Conway/North Myrtle Beach metropolitan area as the second fastest-growing metropolitan area in the country. Over the past eight years, more than 104,000 people moved to the Grand Strand, representing almost a 30 percent growth rate.”
The statistics show the Myrtle Beach area grew 3.8% last year. That translates to more than 1,400 people per month are moving to the area.
Jeremy Jenks believes the trend of people moving to the Grand Strand will continue into the foreseeable future. “I think it will continue going forward,” says Jenks. “What’s not to love about living here? The Atlantic Ocean isn’t going anywhere and Myrtle Beach and the Grand Strand are always going to have near-perfect weather.”
Jenks says people are attracted to the area’s quality of life, low cost of living, warm weather, and amenities. Baby boomers and millennials often choose to make the Grand Strand a permanent home.
For those who may be looking to purchase a home,” Crowther said, “now is the time to do so.” She notes the second-fastest metro area milestone is a testament to how the economy will continue to perform through the rest of the year.
“In Myrtle Beach and up and down the Grand Strand, we’re starting to see inventory tighten a little bit,” Says Jeremy Jenks. “The availability of houses and the choices of houses are going to be far fewer, so right now is an excellent time to buy.” Many of the Realtors at Keller Williams The Trembley Group Real Estate have children who are keenly aware and sympathetic to their clients with children. Many of them try to coordinate their home purchase with the school year. “A lot of people try to make their new home purchase and get it closed before the school year starts,” said Jenks.
Jeremy Jenks says he expects a steady growth in the condominium market through 2020. He says recent changes to condominium rules by the Federal Housing Administration means more condominium projects are expected to gain eligibility for FHA financing. “With the recent changes to the FHA condo rules,” says Jenks, “we anticipate the condo market loosening a bit and we expect to see a lot more activity because FHA financing will make condominiums a lot more attractive for buyers.”
“Frankly,” Jenks says, “I don’t see the Myrtle Beach and Grand Strand real estate growth coming to an end anytime soon.”
Horry County Planning Director David Schwerd says Horry County is being even more proactive in preparing for future growth. The county constantly evaluates flood hazards, public safety, and infrastructure when considering new rezoning requests or designing roadway improvements. Jeremy Jenks remarked, “In Myrtle Beach and along the Grand Strand, we’re lucky to have community leaders who are interested in growth but not just growth for growth’s sake. They are interested in responsible and sustainable growth. The means the area is a great place to live and raise a family today, but, looking forward, it will be a great place to live and raise a family ten years from now or twenty years from now.”
“While construction costs and labor shortages always present a challenge, we have jobs and jobs give us stability,” Jenks said of the region’s housing market. “For me, the keywords describing the expectations for the Myrtle Beach and the Grand Strand housing market are ‘strong, stable and consistent.’ I’m really looking forward to being part of the 2020 Myrtle Beach real estate market. I think it will be a great year for both buyers and sellers.”
Myrtle Beach Real Estate Forecast
“Since opening Keller Williams The Trembley Group, we’ve had a market where home sellers held all the aces. In most transactions, sellers fielded multiple offers, sometimes for more than asking price while buyers faced stiff competition in a very fast-moving market,” said Jeremy Jenks, partner and Vice President for Sales at Keller Williams The Trembley Group” Were starting to see conditions weaken a bit, but the years of limited construction is still evident. Annually, home inventory is still falling and home values are growing well above their historic rate. While these trends aren’t as dramatic as they were a few years ago, it’s still far too soon to call it a buyer’s market.”
“Limited supply is giving much support to the home prices floor right now, but most experts still expect to see support start to crack sometime in 2020. That will most likely result in a less than three percent annual home-value appreciation next year and beyond,” said Jenks. He also noted a Pulsenomics® report that is consistent with a shifting market. “For the first time, a majority of the experts said that there is downside risk to their long-term outlook for home values nationally––and they outnumber experts who assigned upside risk to their forecasts by more than a three-to-one ratio.”