Since the beginning of the year, The Trembley Group blog has posted several articles about the real estate market conditions in Myrtle Beach and along the Grand Strand. The blogs have explored many of the factors currently driving the local real estate market. Now a construction labor shortage is adding even further pressure to an already red hot and fast moving real estate market.
Jeremy Jenks, Vice President of Sales, 843.638.3002
Macroeconomic Factors Affecting the Myrtle Beach Real Estate Market
Among the macroeconomic factors driving the Myrtle Beach and Grand Strand seller’s market are continued lower interest rates, an overall strengthening of the local economy, and population demographics like age, race, gender, income, and migration patterns.
Microeconomic Factors Affecting the Myrtle Beach Real Estate Market
The Trembley Group Real Estate blog has also addressed many of the microeconomic factors affecting our South Carolina coastal real estate market. Factors like property location, condition, updates, and upgrades are all driving Myrtle Beach and Grand Strand real estate prices higher, so much, in fact, that appraised values are sometimes less than contract prices.
The macroeconomic and microeconomic factors are combining to create the perfect storm for a strong seller’s market. It is a wonderful situation for a home seller. Real estate brokers up and down the Grand Strand are reporting shorter times on the market, contracts close to and sometimes surpassing asking price, and frequently properties with multiple offers. Buyers are seeing prices rising so rapidly that they want to get into the Myrtle Beach home market before they are priced out of the market.
Even experienced real estate professionals are finding it a challenge to navigate home sales from contract to closing. In an earlier blog post, Jeremy Jenks, Vice President of Sales at The Trembley Group Real Estate in Myrtle Beach commented on the high demand, low inventory, and a rapidly appreciating market, “One of the biggest problems our company is facing right now is that demand is outpacing supply as prices are rising. You wouldn’t think that would a be problem, but some of our sales are appraising for less than the sales price. Since an appraiser is required to support his or her opinion of value with comparable sales, in a fast appreciating market, appraised value tends to lag sales price by several months.”
Now there’s another factor driving the Grand Strand real estate prices even higher. This week’s Wall Street Journal has an excellent article By Peter Grant that discusses the labor shortage in the construction industry and how it is driving real estate prices even higher. Entitled, “Labor Shortage Squeezes Builders, Why are property prices rising so quickly?” Here’s one reason.
The article discusses how the shortage of qualified carpenters, electricians, roofers, and plumbers is driving home prices higher.
“Ever since we came out of the great recession, many folks in our industry have been saying: it’s coming, it’s coming, it’s coming,” said George Nash Jr., director of preconstruction for Branch and Associates, a Roanoke, Va., contractor. “Today the problem is there.”
Several contractors said when they bid out jobs two years ago, two or three subcontractors would typically bid for each part of the project. Today they are running into situations in which there is only one bid, making it harder to hold down costs, they said. Industry executives also said part of the scarcity stems from many workers idled by the downturn finding other jobs and retiring. Also, fewer young people are choosing construction as a profession.
Some homebuyers might say, “A construction labor shortage won’t affect me. I’m not going to buy new construction. I actually prefer an older established neighborhood with mature landscaping.” Not true. Real estate markets are like the Alexander Calder mobile that hangs in the National Gallery of Art. Everything is in perfect balance. If one piece changes but a little, every piece will change. If the price of new construction labor rises only a little, it will affect the prices of newly constructed homes which will affect the prices of existing homes which will even affect the prices of vacant building lots. All the real estate prices and market conditions are interrelated.
Is a construction labor shortage going to have an effect on the Myrtle Beach and Grand Strand real estate market?
Construction Labor Shortage Affecting the Myrtle Beach Market
A couple of months ago Brian Gallagher, chairman of the Associated Builders and Contractors of the Carolinas, a professional construction industry association, wrote a guest editorial for The State newspaper in Columbia, South Carolina. He said, “Continued growth depends on a skilled workforce… and we have a problem here. Members of the construction industry must become proactive in addressing the workforce shortage head-on by acting to inform, educate, train and recruit tomorrow’s workforce.”
Gallagher went on to call for school districts and legislators to invest in career and technical education programs. “And we need everyone to understand that this workforce shortage will hurt all of us, whether we are part of the construction or manufacturing industry or not,” Gallagher concluded.
The take-away from the news since the beginning of the year? This is the best time in years to be selling a house. Prices are climbing steadily. In today’s Myrtle Beach and Grand Strand real estate market, a seller can expect a short market time and offers at or near the asking price.
Home buyers are encouraged to get off the sidelines and become active in the market. Today’s Myrtle Beach real estate market is not a bubble. The market is being driven by pent-up demand and a multitude of sound economic factors. And the market appears to be getting stronger. All the news indicates the real estate market will continue to gain momentum. Waiting will mean paying a higher price or having to settle for less house. The cost of waiting will be high.
And how do you navigate the complex, ever-changing Myrtle Beach and Grand Strand real estate market?
In a market that’s moving as quickly as this one, the wrong choice could end in a costly mistake. Maybe more than ever in recent memory, an experienced and professional realtor is a vital part of the home buying or home selling process. A wrong choice could prove costly.
The sales executives and company officers at The Trembley Group Real Estate have decades of experience helping buyers and sellers of Myrtle Beach and Grand Strand real estate. They are all extremely passionate about helping their clients make well-informed decisions during one of life’s most exciting times. At The Trembley Group, we specialize in positively changing lives daily by creating long lasting, fruitful relationships. We achieve this with our clients through consistent communication, collaboration, innovative services and a vast knowledge of today’s real estate market.
Need help? Call The Trembley Group at 843.945.1880 ext. 100 and we’ll help you look for the perfect listing or buyers agent!
At The Trembley Group, we pride ourselves on being the experts at more than just selling real estate. We are local residents, some of us have been here for a lifetime. The rest of us will be here until the end of time. We love living, working, and playing in the diverse backyard of Coastal Carolina, and look forward to helping you live and love your dreams soon too. Please reach out to us by phone or email for personalized service and one-on-one advice.