Jan Chilton - Real Estate Marketing and SEO

Wall Street Journal columnist Cyril Moulle-Berteaux predicts the real estate slump will end in 2008, in his recent opinion column The Housing Crisis is Over.

He makes a very good argument for his opinion, reminding us that the current housing bust is now nearly 3 years old!

Hard to believe, isn't it? 2005 saw the peak of it all, when we were getting 50 leads a day and realtors were little more than order-takers. Here it is in mid 2008, and real estate agents everywhere have left their careers, many because they came on board when they didn't have to SELL, but do little more than answer the phone, reply to emails, and cherry-pick the leads.

According to the journalist, New Home sales are now down 63% from then, and new construction is less than 1/2 of what it was, back to the levels of 1982.

Mr. Moulle-Berteaux writes:

"The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in."

The author opines that in the past five major housing market crashes and corrections, when home sales bottomed, prices starting rising. He says that in 1974, 1982, and 1991, total market inventory got to 11 months of supply, and within 6 months, price declines slowed.

He says that inventories will drop to 7 months of supply by the end of 2008, and although the magic number is 5 months (he predict by 2009) there will be a significant impact on the prices this year.

Also, mortgage rates are presently at 5.7% for a 30 year fixed rate. In the 70's and 80's, it was in the teens - a big difference in payments and who can or cannot afford to buy. With lower payment come less foreclosures. Foreclosures lower market values which lowers prices, so everything working together will bring us back in the game.

Resort homes and condos in Myrtle Beach are traditionally more of an investor driven market, so may not follow the exact path of regular housing, but it's still a ray of light and hope in the horizon for Myrtle Beach real estate sales overall.

See our websites for the available Myrtle Beach MLS listings and find the best deals on Myrtle Beach condos for sale. Coming soon, a new website for cheap oceanfront property on both coasts.

See our real estate blog for Canadians!

CNN compiled a list of the cities and markets that were suffering with foreclosures and lowered real estate values faster than the rest. There weren't really many surprises, and thankfully Myrtle Beach homes and condos, though falling in price, are not yet on the list of the heaviest losers.

CNN says they used data from a San Francisco based MLS tracking service call Zip Realty to compile the following:

Number 10 on the list...
Atlanta GA with prices down 7.1%, blamed on overbuilding in the condo market and high foreclosure rates in other, poorer counties in Georgia.

Number 9 on the list...
Detroit, MI with prices down 7.7%, blamed on the cities economic woes as much as the market. Also the subprime lending in the Detroit area was heavy.

Number 8 for losing market value...
Jacksonville, FL at 8.7%. According to CNN, Jacksonville never had the price boom that the rest of the resort areas enjoyed, which meant less overpricing to accommodate for. Still 8.7% is pretty bad in my book.

Number 7 is no surprise...
Phoenix, AZ down 9.5%. Phoenix had the real estate boom like Florida and Vegas. They say there are a whopping 51,643 homes on the market now...wow!

Number 6 was a bit of a surprise...
Miami Florida at 10.6%. I would have guessed they would be in the top 2 or 3. They say there are 80,000 homes for sale and the sellers are refusing to drop the prices. (Probably can't without a short-sale) The market in Miami is therefore stagnant with few deals to be had and buyers sitting on the fence.

Number 5 I would have guessed lower as well...
Los Angeles, CA down 10.7%. From what I've read, California seemed to suffer the most from the sub-prime ripoffs and every kind of scam to go with it. Los Angeles home prices are to the roof anyway, and foreclosures are high. There are over 100,000 homes on the market in this city right now!

Number 4 highest in pricing woes...
Tampa Florida, with prices lowered to 11.7%. Like most of Florida, the "condo flippers" were heavy here, and building escalated while prices rose too fast. When the bottom fell out, most of the buyers were investors who tossed in the cookies and went home to sulk. 56,386 homes for sale.

Number 3 is no surprise from last year's headlines...
San Diego, CA at 17.1% loss of market value is paying for the unrealistic price climbs they enjoyed in 2005. They do say that sellers are reducing the asking prices accordingly.

Number 2 - I would have bet it would be the top one...
Las Vegas prices dropped by 17.2%. Vegas is still enjoying a good market, according to my realtor friends there. But the foreclosures and short-sales are huge. Vegas real estate was largely investor buying, and when that stops, it all stops.

They are, however, using up their inventory quickly, and in the long run it may help their overall market. I was surprised to learn from my friend that the problem was affecting single family homes in nearby Henderson, NV as well as the luxury condos surrounding the strip.

The All-Time Number One Worst...
Sacramento, CA. They say it was overbuilt to the hilt (pun and rhyme intended). Foreclosures are extremely high, and almost half of the sellers have relisted with lower prices in an attempt to sell their homes.

It may seem to our local realtors that times are hard, but compared to these areas, we are doing very well. According to Realtytimes.com, we are only at 2.5% lowered pricing, and 97% of sellers will get their asking price. It is taking from 6 months to a year to complete a sale, however. It's a great time to find cheap oceanfront property

Oddly, I saw in the local paper, The Sun News, that some of the condos here were at almost a 20% lowering in price. I suspect this difference is between the prices of the newer Myrtle Beach resorts for sale now, which were overpriced from the start, and the existing condos that increased dramatically, but not to the extent of the new ones. Like always, though, the media loves to exagerate and cry doom all the time.

Myrtle Beach Web Design is now affiliated with the local Keller Williams Group, and we hope to help them increase sales and be the best Real Estate Agency in Myrtle Beach! See our other blog for Myrtle Beach Condos for Sale .