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My dh and I are in the process of buying an oceanview condo in MB for under $150,000 that sold for just under $500,000 three years ago. Frankly, while I am thankful that prices have come down so much since we could never in a million years buy something for that price, it boggles my mind that prices were really that high. We are buying the condo both as an investment--not for a montly payoff, since these things don't work that way--but rather for the long term appreciation value, and for a place for us to spend winters in the future. What I'm wondering is if there is any possibility of prices ever going as high as they were in the mid-2000s again, or was that a fluke and an unnatural inflation of value that will probably never happen again? I know it won't happen anytime soon, if at all, since the supply is so large right now, but we plan to own this property for several years.
Any thoughts? I'm just curious, not to mention thrilled at the idea of owning property in MB. Woo-hoo!!!!
Canudigit,
The true reality of real estate for now and for many years to come is don't buy for an investment.
Unfortunately, real estate is no longer a real good investment, unless you just buy something with cash.
The American dream of owning a home is not a dream anymore.
The new American dream is trying to live within your means and have a retirement account
since Social Security will not be available to everyone.
Buy a home to live in for the long term, it it makes you feel secure.
Buy your condo as your long term vacation place, possibly a home in the future to live in.
Being at Myrtle beach, you could rent it out to offset your expenses, and also use it yourselves for your winter get away.
The price of homes are just starting to get stable now, being lower.
There was alot of fraud involved in those CDO's, that is why the prices were inflated.
Congrats! Hope you enjoy your new condo!
Like I said, we have no intention of making money on the month from the rental of this condo, even though it does have a great rental history, because of the various expenses that come along with owning it. We just want a place at the beach where we can go a couple of times a year and where we can spend winters when we retire in a few years. We have owned investment property where we live for many years, so we know first hand that real estate is no longer the golden goose that it once was. Thankfully, we do own the house that we live in free and clear, or we might be upside down in it like so many people are finding themselves right now. We are also paying cash for the condo based on selling a small apartment building where we live that is paid for as well. I would never do this if it involved a mortgage, that would be too much expense to make it viable. I am just hoping that property at MB will appreciate a bit faster than where we live now when the economy recovers...IF the economy ever recovers, and I wonder if property will ever reach the pre-recession values or if those were false values based on the banks loaning too freely and making loans to people that they never should have made loans to.
Thanks again for your kind wishes. We feel fairly confident that prices can't go much lower, and then there will be nowhere to go but up. It may take years, but that's okay.
IMO, that's a difficult question to answer from a logical perspective. Artificial inflation of prices is usually related to a situation where a large segment of whatever is involved is controlled by one or a small group of investors. That does not apply to MB real estate. In the early 2000's, the classic "supply and demand" model was the dominant factor, if only for a short while. Life was good, disposable income was high, and the area was not overbuilt. A lot of folks wanted to own here, and were willing to pay big $$$ to make it happen. It's hard to call that artificially driven, particularly in an area where RE has been pricey for quite awhile. The balloon cycle followed, driven by far too much building, far too much greed, and a damaged national financial structure that was far larger than the MB area.
There's no question that there has been a great deal of fraud in the area, and a lot of people have been hurt by it. I'm not sure I would agree that has been a major factor in the overall drop in property values. We currently have far too much supply and not enough demand, again the classic economic model that keeps everything "properly" valued. Will property values ever "recover"? Of course, but no time soon. After that, they'll eventually depress again during the next financial downturn. That's why it's called a cycle. Prudent RE is still a good long-term investment as long as reasonable borrowing is concerned, relative to income. RE sucks for short-term speculation, and hopefully will for a long, long time.
Thanks for your response, PawleysDude. It makes a lot of sense and helps me to understand why things are the way that they are in MB right now. Pretty much the entire country is experiencing a plunge in RE values, but the extremes in MB seem to be much more pronounced, like when you can pick up a property for less than 30% of its sale price three years ago. I saw similar numbers when we lived in Arizona briefly a few years ago, but most areas of the country don't seem to have experienced such drastic price fluctuations.
I was wondering what, if any, effect these ridiculous gas prices would have on the rental market in MB for this summer season, but my sister and her family were looking to book a place the second or third week of May and many of the places that they checked out were already booked up, and that's pre-Memorial Day, so hopefully that's a good sign for this summer's economy in MB.
We have looked at several resort properties in Myrtle Beach since last summer. If you don't mind saying, what property are you buying in? Just curious, possible buyers here too!
We have looked at several resort properties in Myrtle Beach since last summer. If you don't mind saying, what property are you buying in? Just curious, possible buyers here too!
I'd rather not say, for privacy reasons, I hope you understand. I can tell you that we are at right around the $150,000 mark. The seller has already accepted our offer, but it's a short sale so we need for the bank to accept our offer as well, but our realtor says he doesn't see a problem with it. It's in the extreme northern end of MB, but not in North MB, which sounds like the same area where you are looking. We love this area too because it is very quiet and family oriented. We already had an offer accepted at the Marina Inn at Grande Dunes, but we had to back out when the bank notified us that they wanted to close ten days after they accepted our offer and we didn't have the cash in hand yet. That's how short sales roll, apparently. The bank says "jump", and the buyer says, "How high?" This time, however, we will have the cash, so it will be a done deal if the bank accepts our offer or doesn't counter too high.
Last edited by canudigit; 04-21-2011 at 05:15 AM..
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