Housing Slowdown?

Rosy growth expectations may be overly optimistic

To say that our communities experienced robust growth during the past few years is an understatement. Mid-decade U.S. Census numbers made public this week show that Horry County gained nearly 7,000 housing units - and roughly the same number of new residents - in 2004 and 2005 alone. Up in Brunswick County , N.C. , the gain was just as dramatic, with more than 3,500 new housing units going on line in 2004 and 2005. It is no surprise housing analysts and members of the local development community expect robust growth in the years ahead.

These rosy expectations, however, may be wrong because they're grounded in a line of thinking that has hurt the Grand Strand before - the belief that past growth is a reliable predictor of future growth. Such thinking during the national golf boom during the late 1980s and early 1990s, for example, prompted investors to build more golf courses than the flattened-out golf market of the mid-1990s and beyond could handle.

That miscalculation was serious enough. It led to residents' unhappiness when the golf courses on which their homes are situated get redeveloped for other purposes. And to this day, the overabundance of local golf courses keeps many from being as profitable as they should be.

But if too many housing developers build more units than they can sell because they think the housing boom of 2000 to 2005 will continue indefinitely, the consequences for our communities could be painful. There's reason to worry. New homes aren't selling as rapidly as they did last year, and sales of existing homes locally, especially condos, are waning.

Why? The chief source of money that fueled rampant home buying here in the first half of the decade - the selling of homes elsewhere for fat profits - appears to be drying up. Just this week, The Sun News reported that sales of existing homes nationally has plummeted in recent months. Folks who want to come live in Myrtle Beach but can't sell their homes in Maryland , New Jersey or New York may be unable to immediately realize their dream. If they can't sell their homes, they can't move.

As well, many prospective residents are worried about their principal source of retirement support - pensions. That problem could prompt some of them to delay retirement, and the dream of moving to the beach, until they feel greater confidence that their income sources are stable.

None of this is to throw a wet blanket over the optimistic local development community - real estate agents, builders, bankers and real estate attorneys. The power of our warm, sunny communities to attract newcomers continues to be enormous. And our relatively low cost of living and low taxes will attract folks trying to escape high living costs and taxes elsewhere.

But overbuilding as the supply of buyers diminishes could trigger a decline in the value of existing homes, wiping out owners' equity and throwing some into default. The local development community would be prudent to pay close attention to continued population growth as they make decisions for the months and years ahead.

Georgetown deals with growth spurt
City Council approves 400-home development
By Zane Wilson
The Sun News

GEORGETOWN - The rapid pace of growth in Horry County and on Waccamaw Neck in Georgetown County has squeezed south into the city of Georgetown, and taken many residents by surprise.

Thursday night's City Council meeting was a showcase of the sudden issues that have hit this small bayside town, most of them in the last few months.

Facing the council was approval of annexation and rezoning of land for the town's first Centex Homes subdivision, a hotly opposed condominium and commercial development overlooking the river marsh on Church Street, and a revised zoning code that will give special protection to residences in the historical district.

The Centex project, at 400 homes, is more than a tenth of the city's existing housing stock. It had 3,856 dwellings in the 2000 census.

It's more growth all at once than has come in many years to a town that lost population in the last census and has struggled with shutdowns of factories many residents depended on.

"This is just a new thing for this part of Georgetown County," and people aren't used to it, said City Administrator Steve Thomas.

The council approved the annexation and rezoning for the Centex project, though plans have not been submitted for approval.

Members also approved on first reading the condo project, but said they object to the height and want those plans revised before final approval.

Members turned down the proposed special zoning for the historical residential district but did send it to the planning commission for consideration. The new district was aimed at preventing multi-family and group homes, but most council members said the city has always had a handful of such residences and they see no harm in it.

The Centex project brought little objection Thursday. Some residents of the surrounding area had complained to the City Planning Commission and at last month's council meeting, but the proposal passed unanimously.

The project will be on about 160 acres in the south tip of the town between South Island Road and Charleston Highway. Some residents of South Island Road said they fear added traffic from the project but were not as upset when they learned the plan includes a new road between Charleston Highway and South Island Road that will be open to the public.

It was the condo project that drew the most council discussion and the most public comment. The project includes 56 units in two buildings on the Black River marsh, four stories high with parking underneath. In front of them, facing Church Street, would be two two-story commercial buildings that could have up to 12 businesses.

The development is near the north entrance of town on U.S. 17, which is Church Street.

The project was turned down by the planning commission because of its 65-foot height and scale. The current zoning has a 35-foot height limit, though exceptions have been granted. The Architectural Review Board also opposed the plans.

Many opponents also packed the council chambers Thursday.

"This application represents a new threshold for our community," said Tom Gillespie, asking the council to be very careful.

The project is an important event in the city's history, said Charles Smith. The council was about to state what its vision of the future of Georgetown is, and the condo project is out of scale with the city, Smith said.
"It is in essence a Myrtle Beach without the beach," Smith said.

Myrtle Beach architect Derrick Mozingo designed the project and told the council it makes "a nice ceremonial gateway to the city" and is something residents can be proud of.

It has design touches such as elements that echo the buildings in Georgetown's old commercial district on Front Street, and a decorative piece that recalls the Town Clock.

But neither Mozingo nor project manager Jeremy Blackburn could satisfy council members on why the development needed to violate the height limits by 20 feet.

"This is changing the entire scope of Georgetown from now on," Councilman Paige Sawyer said.

"It is not in harmony with the city," said Councilman Rudolph Bradley.

Mozingo said the project could be built cheaper and less attractively, or could have a flat roof, or could be sprawled over the property instead of rising to four floors with space between the buildings.

But the density is needed to make a reasonable profit, he said.

"We think it establishes a precedent for what good development should be," Mozingo said.

Bradley said the design is beautiful and he would vote for first reading but not second unless the plans are changed. The first approval passed on a 3-2 vote. Mayor Lynn Wood Wilson excused himself because of a relationship with the developers, and one council member was absent.

After the meeting, Blackburn said he is not sure what the developers will do next.

Real estate agent Robbie Buice said he hopes something is approved. He said people come to his office every day looking for condos in Georgetown and none are available.

MB area among 50 fastest-growing in U.S.
By James Rosen
Washington Bureau

WASHINGTON - Led by Raleigh and Myrtle Beach, 10 metropolitan areas in North Carolina and South Carolina were among the country's 100 fastest-growing cities and towns between 2000 and 2005.

The Myrtle Beach Metropolitan Statistical Area, which includes Conway and North Myrtle Beach, grew by 15.4 percent to a population of nearly 227,000, ranking No. 37 in growth rate among U.S. cities and towns.

The combined Hilton Head Island and Beaufort region had a population spike of 12.5 percent to almost 160,000, the 70th-largest in the country.

The Raleigh-Cary region, counted as a single area by the federal government and including most of the Triangle, grew by 19.1 percent to a population of almost 950,000, the 18th-largest rate of growth among all such areas in the United States.

Nationally, the country's five fastest-growing metropolitan areas were Palm Coast, Fla.; Fernley, Nev.; St. George, Utah; Greeley, Colo. and Heber, Utah. Larger areas that also experienced rapid growth were Las Vegas, Fort Myers, Fla., and Bend, Ore.

The Carolinas also experienced strong housing growth in the first half of the decade, according to separate data released by the U.S. Census Bureau.

Brunswick County, N.C. and Horry County were among the nation's counties that ranked among the top 100 in the nation for the largest increases in housing units between 2000 and 2005, according to the report.

Michael MacFarlane, state demographer for South Carolina, said development along the Interstate 85 corridor from Atlanta to Charlotte and then up to Greensboro and Durham is fueling growth in the Carolinas.

A planned freeway extension from Interstate 95 down to Myrtle Beach will bring more people and homes, MacFarlane said.

"It will make getting there easier for people coming from the north," he said.

William Tillman Jr., state demographer for North Carolina, said that the state has built on the boom of the 1990s with steady annual population growth of 1.3 percent to 1.7 percent over the last five years.

"Basically, you have the growth centers of Raleigh, Charlotte, Wilmington and Norfolk [Va.]," Tillman said. "There is growth in other parts of the state, it's just not nearly as strong."

Retirees from both the military and civilian jobs continue to swell the ranks of both states.

Sun City, a large retirement and recreation complex in Beaufort County, has added about 8,600 housing units, prompting other developers to build smaller centers for retirees, MacFarlane said.

The new Census Bureau data shows that the two states' economies are increasingly intertwined along their border.
The Charlotte-Gastonia-Concord metropolitan area, which extends southward across the border to include York County, S.C., grew by 14.5 percent to more than 1.5 million people between 2000 and 2005, ranking No. 45 in the country.

Reflecting the growth in the greater Charlotte region, the Statesville-Mooresville metropolitan area in Iredell County north of Mecklenburg had a population increase of 14.9 percent to more than 140,000, the 41st-largest spurt in the country.

Other high growth areas in North Carolina were Wilmington, Dunn in Harnett County, Sanford in Lee County as well as Kill Devil Hills on the Outer Banks.

Fast facts

The Myrtle Beach-Conway-North Myrtle Beach census area - called a Metropolitan Statistical Area - has grown 15.4 percent since the 2000 census, according to figures released Monday by the U.S. Census Bureau.
The area encompasses the entire county.
Georgetown County is called a Micropolitan Statistical Area. It grew 9.3 percent, the figures said.
Brunswick County, N.C. is part of the Wilmington Metropolitan Statistical Area that also includes Onslow, New Hanover and Pender counties. The Wilmington area grew 14.8 percent since 2000, to 315,144 from 275,709.
Most of the growth was from people moving in, the bureau said.

Strand national hot spot
By Jenny Burns
The Sun News

Brunswick County, N.C., and Horry County saw the greatest increase in housing supply in their respective states last year.

They also made the top 100 list of fastest-growing counties in the nation, according to new census figures released Monday.

Brunswick County ranked 28th in the United States in housing growth with a 5.8 percent increase from 61,116 housing units in 2004 to 64,647 units in 2005.

Horry County ranked 61st in the nation with a 4.7 percent increase from 140,628 units to 147,207 units.

"[The rankings] just show the potential of this market. Everyone has been projecting that this will be the hot spot for growth, and this verifies that there is probably some truth to that," said Tom Maeser, market analyst and president of the Fortune Academy of Real Estate.

Both rankings fall in line with population increases.

Brunswick was ranked 29th and Horry 67th in population jumps for the same time period.

Officials say it's good news that the number of housing units - which counts all homes, apartments and condos in a county - is growing at about the same rate as population. For the same time period, Brunswick's population grew 5.4 percent and Horry's grew 4.3 percent.

This signals that homes are being snapped up as permanent residences, not as investment property.

"We are a resort area, and more people are moving here on a more permanent basis," said David Sandifer, Brunswick commissioners chairman and owner of Holden Beach Properties. "In the past, growth in housing has been attributable to absentee owners. Now we're getting more permanent people."

Nationally, Flagler County, Florida, had the highest rate of housing growth for the second year in a row at 14.8 percent. Three other Florida counties made the top 10 as well as Pinal, Ariz., Franklin, Wash., Culpepper, Va., Washington, Utah, Kendall, Ill. and Rockwall, Texas.

Sandifer expects Brunswick will hold its 28th ranking next year or even surpass it. Maeser said he expects both Brunswick and Horry counties will continue to rank high on the fast-growing counties list.

"We used to say we were the best-kept secret in North Carolina, but I don't think we are anymore. Buyers tell me they've looked from the Outer Banks to Georgia, and this is the place they want to be," Sandifer said.

"Our growth is really showing in zoning and permits. It wouldn't surprise me if we got even higher on that list next year."

He says Brunswick schools are growing at the same percentage as population, which means not all newcomers are retirees.

Builders are increasingly eyeing Brunswick and Georgetown counties for new growth, because land closer to the ocean in Horry County is getting gobbled up.

"As we get built out, we're going to see builders go north and south," Maeser said.

Georgetown County did not make the top 100 listing, but new home growth is expected to take off in Georgetown after the 5,200-acre Crowne Pointe development gets under way. It is projected to bring in more than 7,000 homes.

Centex Homes is also planning a 400-home development near Georgetown. Centex already has three communities in Brunswick County.

Georgetown County had a 2 percent increase in housing units, from 30,937 to 31,617, according to the census.

Georgetown also has a host of undeveloped waterfront land.

"The Black River itself is just a huge undeveloped area. And everybody wants waterfront property, and there's just none left or very little in Horry County," said Lee Hewitt, chairman of Georgetown County Zoning Board of Appeals and past chairman of the planning commission.

"So the growth has got to go to Georgetown."

Builders turn to incentives
By Jenny Burns
The Sun News

Big builders, taking cues from the auto industry to sell their oversupply of homes, are offering big incentives.

Buyers can get 4.25 percent financing, no payments until 2007 or free homeowners association fees for a year.

The deals are aimed at making cautious buyers during this real estate slowdown take the plunge and purchase.

"[National builders] are seeing sales falling in general, seeing cancellation rates pick up, and they're using the incentives to help drive sales and use it to sell inventory that they didn't plan on having," said Todd Vencil, analyst for BB&T Capital Markets, who covers eight publicly traded home builders.

For consumers, the payoff is in lower monthly payments and less upfront cash to get into a new home.

While incentives are normal, Vencil said this summer's incentives go beyond the typical appliance upgrade and free closing.

"They've clearly picked up," he said.

Centex Homes, the Strand's largest builder, is offering 4.25 percent financing with an adjustable rate mortgage. On a $150,000 home, that would make monthly payments about $738 before insurance and taxes are figured in.

That rate is only on spec homes, or homes that haven't been presold, that close by Oct. 31 in most Centex neighborhoods, said Ken Balogh, Myrtle Beach division president.

For a 30-year fixed mortgage, that rate jumps to 6.5 percent.

Balogh said Centex wants to take rates down to last year's level to help buyers fight rising rates.

The builder is seeing an uptick in cancellations compared to last year, especially in condos, he said. The single-family market is also taking a hit, but has seen fewer cancellations and has less excess inventory.

Builders are not only competing with each other, but with ballooning inventory, said Jeremy W. Pinchot, home builder analyst with Monness Crespi & Hardt in New York.

"The result is that some builders who want to satisfy Wall Street with the best results possible, even in a declining housing market, are offering higher incentives to capture market share and drive volumes," Pinchot said.

In the second quarter, condo inventory nearly doubled over last year and home inventory jumped 50 percent, according to the Multiple Listing Service for Horry and Georgetown counties.

Fighting insurance rates

Builders are also looking at ways to ease the pain of skyrocketing insurance rates along the Grand Strand.

For instance, Centex is paying homeowners association fees between $3,000 and $9,000 in most of its condo and townhome projects.

Some Strand condo complexes have seen double and triple increases in their fees because of insurance increases.

"We can't fix the insurance challenges, but we can help our customers to overcome a year or two of that increase," Balogh said.

Other builders are offering special deals.

Lennar Corp. is offering no payments until 2007 in its Brighton Woods single-family subdivision off S.C. 707 in Murrells Inlet. The company is also offering no closing costs.

"The way the market is right now, everyone's offering something. We'd make the payments until 2007. It's working pretty good," said Donnie Long, Myrtle Beach division president.

Long said he is expecting more spec homes in Brighton Woods in the next few months.

D.R. Horton is offering 5.875 percent financing with a 30-year fixed rate in a handful of neighborhoods on homes that close by Sept. 30. And the company has increased commissions for selling agents, said Doug Brown, coastal Carolina division president for D.R. Horton.

"Interest rates have increased and we thought this was an opportunity to increase sales. People are drawn more to it," Brown said.

Homeowners association fees are also being covered for a year at D.R. Horton's multifamily properties at The International Club and The Farm at Carolina Forest.

Portrait Homes is paying homeowners association fees for a year in several of its townhome and paired ranch-home communities. Portrait is also paying up to $2,000 in closing costs in all communities, said sales manager Tony Melia.

Ryland Homes has advertised 4.99 percent financing, a free bonus room and $15,000 in design options to buy in its Creekhaven neighborhoods at Prince Creek.

The flurry of incentives is making it difficult for the Strand's smaller local builders to compete.

To fight back, one group has teamed up to offer a "buy down" - or lower interest rate - like the national builders.

Through Countrywide Home Loans, buyers can get 4.75 percent in several of the local builders' neighborhoods, including Sommerset Cove at The Gates, Tiger Grand, Bucksville Oaks and Southborough.

"The markets are changing and we are going to have to change with it," said Tripp Nealy, president of the local builders group, Independent Builders Development. "Rates went up and we're going to have to do what the competition does."

A 20 percent increase in home prices and rising interest rates have added about $400 a month to the average monthly mortgage payment in Sommerset Cove, said Scott Sayre, owner of Bridge Towne Real Estate, which sells homes for the Independent Builders.

"[The buy down] can bring these prices back to last year's [payment]," Sayre said.

Falling confidence

Nationally, builder confidence is down to its lowest level in 15 years because of reduced sales and increased cancellations, according to a recent survey by the National Association of Home Builders.

Sales of single-family homes in the U.S. dropped 3 percent in June.

NAHB's forecast shows about a 12 percent decline in new-home sales for 2006 as a whole, but further tightening by the Federal Reserve would have a more severe impact, said Michael Carliner, an economist at NAHB.

On the Strand, new and resale condo sales dropped 30 percent in the second quarter and single-family homes increased 4 percent, according to the MLS.

Overall, public builder order rates have fallen off about 30 percent nationally and spec inventories are up as many buyers have canceled orders, fearing falling home prices, Pinchot said.

Once builders start offering these kind of large incentives, it can be a competitive cycle, Pinchot said. "Sometimes, the high cancellation rates for one builder are because another builder began offering better incentives on a similar product as the market deteriorated, then the buyer jumped ship. Eventually the original builder will have to increase incentives to lure buyers from the other builder," he said.

Markets eventually reach equilibrium, but incentive wars can hurt builders' gross margins, he said.

Builders can also offer large incentives that homeowners trying to sell their home can't, said Tom Maeser, president of Fortune Academy of Real Estate.

But such savings - which will be common as the buyers market continues - should be passed on to the consumer, not given to the real estate agent.

"These incentives should be providing discounts to buyers because they are the ones being impacted with the higher interest rates," he said.

Builders aren't saying how long they'll be touting incentives, but analysts expect the enticements to stick around a while.

S.C. builders get good news
Analyst expects soft landing for housing market
By Jenny Burns
The Sun News

A national economist told S.C. home builders in Myrtle Beach on Friday that the housing market would see a soft landing.

"There's some risk, some overbuilding. But it will correct and we'll start again," said Joe Quinlan, managing director and chief market strategist for the investment strategies group of Bank of America.

The S.C. Association of Home Builders is hosting about 350 home builders at its annual state convention in Myrtle Beach this weekend at Kingston Plantation.

Quinlan said Bank of America expects two more rate increases from the Federal Reserve.

The Fed voted not to raise the federal funds rate for the first time in more than two years when it met Tuesday.

"We don't think the fed is done," he said.

The housing boom was created by access to easy money with low interest rates.

Quinlan said today's interest rates are just "getting back to normal" and there's no recession in the forecast.

"We underestimate how resilient the economy is," he said.

While residential construction is cooling off, commercial construction is picking up, he said.

Corporations have money to spend and that investment will help alleviate some of the blow to the residential market, he said.

The Southeast is leading the country in economic growth, and has become very attractive to new foreign investment. That's because the area has lower land costs, fewer unions, good universities, state incentives and a good quality of life, he said.

Quinlan asked builders to consider what global warming can mean to coastal building.

"Coastal growth has been phenomenal. How much can Mother Nature stand?" he asked. As insurance and energy costs rise, environmentally friendly building will become more and more important, he said.

The urbanization of Asia and China will create upward pressure on commodity prices, which translates into higher costs for building materials on the Strand.

Builders said Quinlan's information on the world economy helps them to do business better in this global economy.

"What happens in China has an impact on us," said Julian Barton, director of legislative affairs for the state home builders association. "Many years ago that may not have been the case. But now we need to know what's coming."

The home builders conference ends Sunday in Myrtle Beach.

City Council approves B&C development
By Lisa Fleisher
The Sun News

After hours of heated discussion and some last-minute scrambling, Myrtle Beach City Council unanimously approved a housing development Tuesday on the historic Pine Lakes golf course - a plan that does not include a public road.

The road had become a point of contention in recent weeks, turning a debate about public improvements into a battle dominated by residents trying to keep their neighborhood a quiet enclave.

Some wanted a public road so drivers had more options to get around the city, but local residents were opposed, saying they did not want more cars cutting through their neighborhood.

The approved plan did not specify the layout of the development's entrances. Council members said their main objective was to prevent through-traffic from coming onto Woodside Avenue, a residential street and the club's current entrance.

One option would be to gate the Woodside entrance and restrict access to club members who live in Myrtle Beach, which could include the development's new homeowners. Members who live outside the city limits and non-member golfers would enter through a new entrance on four-lane Robert M. Grissom Parkway.

Under a second option, the Woodside Avenue entrance would remain the club's main entrance, and the residential entrance would be on Grissom Parkway.

As part of the compromise, developer Burroughs & Chapin Co. Inc. agreed to give the city $400,000 for public improvements in exchange for zoning exceptions such as smaller lot sizes.

B&C, which plans to break ground this fall, said it will upgrade and rearrange some holes on the landmark golf course, spreading it out over almost 130 adjacent acres that the city annexed as part of the agreement.

Also, 60 percent of the property - now the golf course - will remain open space regardless of future land use.

Residents - many of whom had trotted out petitions, attended a special meeting and contacted council members - had a mixed reaction to the road decision.

Some thought the city should have stuck to its long-term goals of having the maximum number of roads connect to each other, while others were pleased with the plan.

Some thought the city did not go far enough.

"Overall, we are disappointed that [the Woodside entrance] is not barricaded," said Korie Alvey, who lives in the Pine Lakes neighborhood and has come to many of the biweekly council meetings. "You still get all that traffic from the [new] neighborhood."

The city's comprehensive plan, the bible of the planning department, calls for open access through all roads to disperse traffic and encourage neighborhoods to intermingle.

Instead, the development will be something of a cul-de-sac, which city planners have traditionally opposed.

At the request of City Council, B&C brought two options to Tuesday's meeting, neither of which the city liked. The company quickly drew up a third plan and presented it to council shortly before its 2 p.m. meeting, but the members disliked that alternative as well, opting to craft specific language during the meeting.

The debate during the council workshop became uncharacteristically personal, and council members and B&C employees became visibly frustrated.

Bill Pritchard, B&C's senior vice president, told Councilman Wayne Gray at the workshop that he was pressing too hard on various issues.

"You're really making me feel like you don't want me in your community," Pritchard said. "It's making me feel bad."

Gray said he was doing his due diligence.

A smattering of relieved applause broke out when the council voted unanimously to approve the project.

"We're very appreciative that council granted the [project], and we'll do our very best to give them the top quality project that we promised them," B&C spokesman Pat Dowling said. "Their input into the project has made it better."

More homes, retail to be built
By Steve Jones
The Sun News

OCEAN ISLE BEACH, N.C. - A new grocery store, 23,000 square feet of retail space and a large subdivision are coming to the Ocean Isle area, bringing with them more traffic and anticipated improvements to the intersection of N.C. 179 and Ocean Isle Beach Road.

The pending development is an illustration of accumulated traffic problems some say are adding to Brunswick County congestion without getting the proper attention from the N.C. Department of Transportation.

The developers, Crescent Resources LLC and D.R. Horton, say they've submitted a traffic impact analysis to the DOT and are hoping for quick action from the state department so the intersection improvements can be done before the tourist season. They expect to spend several hundred thousand dollars on dedicated turn lanes and other things.

The nearly 50,000-square-foot grocery store is expected to open in the spring of 2008.

It will be the second new food store in the area. An upscale Piggly Wiggly recently opened a few miles away at the intersection of Old Georgetown Road and N.C. 904. Another residential development, totalling more than 1,000 single and multi-family homes, is in the works nearby on Ocean Isle Beach Road.

Some current residents say the lines of traffic along Ocean Isle Beach Road during the summer are already unacceptable and they don't believe widening it to three lanes through the large new subdivision will help. Tuesday's new development, which got a preliminary review from the Ocean Isle Beach town board Tuesday, will have two entrances onto N.C. 179 and one on Ocean Isle Beach Road. A total of 98 acres will become single-family homes. Another 22.5 acres will be the planned retail space and outparcels, which will likely be the site for restaurants and other standalone stores.

Residents and visitors will no doubt welcome the additional stores. But the thought of more traffic is not so comfortable.

"I'm excited about the commercial development," Commissioner Dean Walters said, "but I'm concerned about the traffic flow."

MB planning panel requests more public good from plans
By Lisa Fleisher
The Sun News

Myrtle Beach's planning commission saw two oceanfront building proposals Tuesday and sent developers for each away with demands for more public improvements and other considerations.

A 200-foot, 271-unit condominium building that would rise next to the Landmark Resort Hotel on Ocean Boulevard along 15th and 16th avenues South drew a lot of public interest, planners said, primarily from homeowners who live outside the area.

The new building, on property that is currently a parking lot and the Sportsman Motor Inn, would link with the Landmark and its westerly parking garage. The proposal is to rezone the lot as an L-shaped, planned-unit development, a zoning distinction that lets developers skirt certain city rules often in exchange for public improvements.

Developers said those improvements would include widened sidewalks, handicapped beach access, streetscapes along 15th and 16th avenues South and a turnaround drop-off point at the beach end of 15th Avenue South.

Commissioners challenged the extent to which the developers were giving back to the city.

"I know that you feel that you've reached out and done a lot for public benefit, but it eludes me," Commissioner Joyce Harris said.

Gerald Wallace of Wallace & Mozingo Architects presented the plan on behalf of Landmark and Divine Atlantic Group. Wallace's partner, S. Derrick Mozingo Jr., is on the planning commission and recused himself from discussion and voting.

Commissioners also said they were concerned about population density and parking around the property.

Wallace said there would be very little work done to the Landmark and its parking garage, save for superficial upgrades and paint work.

The commission also got an updated look at a proposed 690-unit-time-share development on Sixth Avenue South by Orlando-based Westgate LLC.

Responding to the commission's earlier protests, the developer split one large tower into two separate towers and shuffled the heights of the buildings. Westgate also increased setbacks around the buildings and tweaked a few other things.

Yet it still did not seem quite enough for several commissioners.

"You have made improvements from very bad to better, but that doesn't mean it's great," Harris said.

City planner David Peete said it often takes several rounds through planning commission and then a few rounds through City Council for a development to move past its blueprints and get off the ground.

Housing numbers signal end of boom
Unsold homes hit record high mark
By Marcy Gordon
The Associated Press

WASHINGTON - Sales of new homes dropped in July by the largest amount since February while the inventory of unsold homes climbed to a record high.

Piling on more proof that the housing boom is over, the Commerce Department reported Thursday that new home sales fell by 4.3 percent last month to a seasonally adjusted annual sales pace of 1.072 million units.

The decline was the largest since an 11.5 percent plunge in February.

The July level of 1.072 million units sold was down 21.6 percent from a year earlier and below the 1.100 million that had been expected by analysts.

"Builders are offering many extras to entice buyers," said Peter Morici, a professor at the University of Maryland's business school. "Overall, values are falling and builders' profits are threatened."

Sales of new and existing homes set records for five consecutive years as the housing industry enjoyed a boom powered by the lowest mortgage rates in four decades.

But rates have been steadily rising this year as the Federal Reserve tightens credit conditions as a way to slow the economy and keep inflation under control.

Analysts expect home sales to drop by some 10 percent this year.

In other economic news, orders to U.S. factories for big-ticket manufactured goods fell 2.4 percent in July as demand for aircraft and automobiles weakened.

And the Labor Department reported Thursday that the number of Americans filing claims for unemployment benefits last week slipped by 1,000 to 313,000.

Prospective home buyers have turned cautious about making such a big-ticket purchase as mortgage rates have gone up and uncertainty has risen over whether the economy and job creation will keep slowing, analysts said.

The government reported that the median price of a new home was $230,000 in July, down from $233,800 in June and up from $229,200 a year ago.

The inventory of unsold new homes reached 568,000 at the end of July, up from 562,000 in June and an all-time high.

The data follow another report Wednesday that also provided evidence of how much the once-sizzling housing market has cooled.

Sales of previously owned homes dropped 4.1 percent in July from June to a 2½-year low, while the inventory of unsold homes climbed to a record high, the National Association of Realtors reported.

New orders for durable goods decreased by $5.3 billion last month, the Commerce Department said.

The 2.4 percent decline, which followed two straight monthly increases, was a poorer showing than the unchanged level that analysts had expected.

Analysts believe that output in the manufacturing sector will rise in coming months but at a slower pace than before, reflecting an economy that is slowing under the impact of surging energy prices, rising interest rates and a cooling housing market.

For July, orders for durable goods totaled $212 billion, a decline of $5.3 billion from June.

MB shoots to top of golf housing list
By Jenny Burns
The Sun News

Allan and Sharon Marquez stand on the fairway behind their house in the Leather Leaf development.

If you want to live on a golf course, there is no better place in the United States than Myrtle Beach.

The Myrtle Beach area is the No. 1 golf home community in the nation, Golf Digest says in its June issue.

The ranking is an endorsement of the area's golf-surrounded real estate, local Realtors and officials say.

"It reaffirms that we are the golf capital of the world," said Mickey McCamish, president of Myrtle Beach Golf Holiday. "It's just quite an honor when you receive an independent assessment like that."

The magazine's editors said the quantity, quality and rating of the Grand Strand's 109 courses - along with the area's relatively low cost of living and high number of playable days - pushed it to the top spot out of 244 counties.

Clinching the rating, Golf Digest editors said, was the area's golf score - with 28 courses carrying player ratings of 4½ stars or more in the "Best Places to Play" guide.

The area also scored well in cost of living and health and medical services.

But Myrtle Beach did not fare as well as other cities in crime rate, arts and culture and airport access, said Peter Finch, Golf Digest senior editor.

The magazine decided to rank "America's Greatest Golf Home Towns" because of the droves of baby boomers looking to retire, move and make golf their new way of life. This is the first time the magazine has ranked cities based on where to live.

"Americans bought more than a million vacation homes, and golf was a deciding factor in nearly a third, so people are buying these things like crazy," Finch said. "There's a boom in golf course homes. It's all over the country. We know that our readers are interested in this."

Almost all of the Strand's courses have homes or condos around them. McCamish said only two or three courses do not currently have housing.

Finch said the guide, which ranks golf towns by region, is meant to give interested buyers a starting point.

The article notes that while oceanfront homes have skyrocketed in the past 18 months on the Grand Strand, golf course homes are a relative bargain.

Local golf course homes are also appreciating, on average, faster than the overall market.

The median price for golf course homes increased 25 percent to $300,000 between Jan. 1 and May 24, 2006, from $240,000 in the same period of 2005, according to the Multiple Listing Service for Horry and Georgetown counties.

Homes overall increased 10 percent in median price during the same time period.

"That says our golf course stuff is appreciating at a higher rate than the overall market," said Tom Maeser, president of the Fortune Academy of Real Estate.

Maeser said the allure of golf course living is the views and open space - especially since studies show 80 percent of those buying in golf course communities don't play golf.

The Marquezes weren't golfers when they fell in love with their single-family home on the 13th green in Barefoot Resort.

"I walked in and said I had to have it," said Sharon Marquez.

The home was a Centex Homes model and not really for sale at the time, but the New Jersey couple just had to have it. They bought it, furniture and all.

Sharon and Allan retired from the Jersey restaurant business, and Allan has learned to play golf in his spare time.

But the couple recently got bored - "How much shopping, swimming and going to the beach can you do?" Sharon said - so they're working in restaurants again, trying to get Docksider's Restaurant at the Barefoot Marina off the ground.

They say they're not too worried about a Strand trend that has turned golf courses into development because Barefoot is a well-known, well-funded course.

In the past seven years, the housing boom has spurred about 21 golf courses to close or plan to close for redevelopment.

Still, they know they can't completely rule out the possibility.

Golf Digest names Barefoot Resort & Golf, Tidewater Golf Club & Plantation, the newer Grande Dunes Golf Club and the upscale DeBordieu as places to play and live.

Tom Staats Jr., president of Century 21 Barefoot Realty, sold the Marquezes their home. He said some buyers are drawn to Barefoot for its high-caliber courses and others, like the Marquez family, want open space and conservation areas.

Staats said the Golf Digest ranking is "a long time coming."

"I think we should have gotten that accolade probably five years ago," he said.

Analysts predict MB area home prices to rise
JENNY BURNS

Money Magazine says Myrtle Beach area single-family home prices will jump 8.4 percent over the next year - an increase that puts the Grand Strand 31st in the United States for price increases.

Analysts say the high ranking shows that Grand Strand real estate is finally being recognized by national media. .

"It's about time," said Tom Maeser, president of the Fortune Academy of Real Estate.

Last year, Myrtle Beach area prices increased 18.7 percent, according to the magazine's study.

Money asked forecasters at Fiserv Lending Solutions and Moody's Economy.com to evaluate 380 markets and rank them by expected future price growth.

The trend: If it was hot before, it won't be in the future. Las Vegas, one of the nation's hottest markets in the last few years, is predicted to see a 3.5 percent drop in prices.

At the top of the list is Panama City, Fla., with a projected 21 percent increase.

Myrtle Beach is the only metro area in the Carolinas to make the top 40.

Wilmington is next, coming in at 47th with a forecasted price increase of 7 percent.

Maeser said he agrees with the forecasted 8 percent increase in single-family homes.

"The first quarter showed about 8 percent, so it is tracking in that direction. The only variable to that is we are seeing an increase in upper-bracket [priced] homes, and you don't have to build a lot of those to have an impact [on the median price]," he said.

Nationwide, single-family home prices will rise 3.5 percent between now and June 2007, according to the forecast. That's under the 10 percent annual rate of the past five years.

The study says Myrtle Beach-area median price increased 51 percent in five years.

Maeser said the past two years of that were a "catching-up period" that has brought Strand prices to a more competitive range to other areas.

Home, condo sales slow

Home and condominium sales along the S.C. coast and midlands slowed in April compared with last year. The Grand Strand had a 12 percent drop in sales and Hilton Head saw a 53 percent fall, according to the S.C. Association of Realtors.

The Columbia area had a 7 percent drop and Charleston had a 6.5 percent decline.

The Upstate and rural areas are booming - with Greenville reporting a 12 percent jump in sales and Aiken having a 34 percent sales increase.

Stabilization along the coast is causing growth in rural and undervalued areas of the state, according to the association. S.C. home sales in April dropped 5 percent from last year.

Buyers drawn to new condos as resale prices rise
JENNY BURNS

As the price gap between new and resale condominiums narrows in Horry County, analysts say it will become more attractive for buyers to look at new condos.

Dramatic price increases in condo resales have brought that average price closer to the prices of new condos, said Carl Van Horn, analyst with Market Opportunity Research Enterprises, a real estate research group in Rocky Mount, N.C.

In the first quarter of 2005, the average price of new condos was $197,154 and the average price of resale condos was $179,242 - about an $18,000 difference.

In the first quarter of 2006, the average price of new condos increased to $214,282 and the average price of resale condos increased to $207,619 - about a $7,000 difference.

"There's been enough upward pressure on resale condo prices that it's more attractive to look at new condos," Van Horn said.

Those higher prices are making resales less attractive and will eventually push up new condo prices, Van Horn said.

He expects next year there will be higher average prices on new condos and an increased gap in the difference between resale condos.

Home sales down in May

Sales for single-family homes dropped slightly in May compared with the same month last year, from 555 to 530.

Condo sales saw a more significant drop at 17 percent, from 948 in May 2005 to 790 this May.

"We're seeing a leveling off on sales; however, what's being sold is still going up in price," said Tom Maeser, president of the Fortune Academy of Real Estate.

Prices are still up year-over-year with the median price for homes increasing 11 percent to $198,000 from $179,000.

The median means half sold for more and half for less.

The median price for condos jumped up 41 percent, from $135,000 to $190,000 this May.

Days on market have gotten longer than last year since more inventory is on the market, Maeser said.

The number of days that homes sit on the market before selling has grown from 119 to 140 days, and the number of days that condos stay on the market has grown from 144 to 155 days.

Boomers make Carolinas their second home
JENNY BURNS
REAL ESTATE

A new survey shows that high-income baby boomers are high on the Carolinas for second home purchases, according to ChangeWave Research.

North and South Carolina had the highest growth in planned purchases for retiring boomers than any other state, said Andy Golub, associate director of research and membership for ChangeWave.

The Carolinas scored four points in growth momentum - with New Mexico next at three points - while Florida saw a one-point drop.

Researchers say this proves the "half-back" theory. Florida retirees are choosing to come halfway back to the Northeast by living in the Carolinas

"Our research has confirmed our firsthand observations. Indeed, a significant number of recent Florida immigrants have chosen to come half-back to cheaper, less crowded and less hurricane prone residential areas in South and North Carolina," said Tobin Smith, founder of ChangeWave, which surveys business executives and professionals in more than 20 industries.

Growth in popularity of the Carolinas among boomers is no surprise to Dan Owens, president of the National Active Retirement Association in Charlotte, N.C.

Owens says Del Webb research shows younger boomers are picking North Carolina as their top retirement destination.

"Florida is continuing to lose its grip. Florida is the No. 1 state sending retirees into North and South Carolina. New York is the second," Owens said.

Grand Strand builders are optimistic that the baby boomers will keep the local real estate market strong - even during a slowdown.

"The group does shield us from extreme economic impacts," said Tom Maeser, president of Fortune Academy of Real Estate.

Builders like Levitt and Sons are developing neighborhoods for the active adult buyer.

The study also shows a shift in the reasons boomers are buying second homes. The highest percentage - 31 percent - said they currently own a second home for rental income. But only 12 percent say they will buy for rental income in the future.

Maeser said that trend mirrors what's happening on the Strand. Few investors are still buying for rental income because high prices have caused rental incomes to fall short of covering mortgage payments, he said. Buyers now want larger, livable units that they can own for personal use, he said.

"My concern is cash flow is pretty hard, and there's becoming less and less a strong market for that. But permanent second home purchasers are buying more for personal use and with the intent to maybe live there after retirement," Maeser said.

The study finds that boomers are more likely to buy for personal use.

Those buying for a primary and secondary residence increased from 17 percent to 39 percent. Buying for appreciation dropped from 16 percent to 12 percent.

The study also found that 32 percent of homeowners in Florida say they're more likely to sell because of high insurance rates - three times more than the overall sample of respondents.

Lawmakers' forums to discuss home insurance
JENNY BURNS
REAL ESTATE

Homeowners shocked by increases in their insurance premiums are expected to pack a pair of public forums on property insurance Monday.

Sen. Dick Elliott, D-North Myrtle Beach, scheduled a forum at the Myrtle Beach Convention Center in rooms 106-107 from 5 to 7 p.m.

The second forum, called by Sen. Ray Cleary, R-Murrells Inlet, will be held from 1 to 3 p.m. in Murrells Inlet.

Many condominium owners have recieved letters that their homeowners association fees have doubled, tripled or increased as much as seven times in some cases, due to insurance premium increases.

Among those hit is Jeff Podber of Brooklyn, N.Y., who visits his condo at Waterway Village about four times a year.

He said he wanted to make the meeting, but health concerns got in the way.

The fee for his homeowners association jumped from $680 to $1,360 per quarter because of rising insurance premiums.

The extra cost is forcing him to sell his condo, which he had hoped to retire in.

"What's to stop this insurance company next year from raising it 400 or 500 percent? They need to do something," Podber said.

Elliott said he called the meeting so S.C. Director of Insurance Eleanor Kitzman and legislators could gather information about the severity of the problem, and legislators could use that information to take to Columbia.

"We're facing a major insurance crisis. We need to deal with the problem as quickly as we possibly can," Elliott said.

Kitzman will be at the meeting, and she said she plans to explain what's happening in the insurance market. Sen. David Thomas, R-Greenville, chairman of the banking and insurance committee, and local legislators will also attend, along with local and state insurance association representatives.

Those wishing to speak should sign up before the meeting, Elliott said.

Hardest hit, he said, "is the little old senior citizen that planned a level of living based on insurance costs. And when that cost goes up several hundred percent, it has a major impact."

Registration is open, and attendees can RSVP by calling 916-7316.

Kitzman will also attend the meeting in Murrells Inlet earliet that day. The Inlet Affairs forum is intended for citizens along the South Strand, the Waccamaw Neck and Georgetown, Cleary said.

He said annual premiums for his own medical building in Surfside Beach more than doubled this year.

"This problem is affecting every one of us at every income level," Cleary said. "Especially hard-hit are seniors on fixed incomes, lower-income working families and small businesses who are the backbone of our economy."

State Sen. Luke Rankin, R-Myrtle Beach, will attend the forum at the Myrtle Beach Convention Center. He serves as a member of the banking and insurance committee, where legislation on the issue would start. "There's got to be something we can do," Rankin said.

State draws line in the sand
Little-known law makes beach homes vulnerable
By Jenny Burns
The Sun News

A little-known 1988 law could have a big impact on beachfront properties.

Real estate agents who do not disclose the existence of the act could be liable if a hurricane damages a home they sold and the property has to be rebuilt.

Homeowners could find they can't rebuild in the same location or same way.

The Beachfront Management Act, designed to protect beaches from erosion, determines how close a home can be to the beach.

Under the act, the state sets a "setback line." Homes cannot be built on the ocean side of that line.

If a building that was built before the act is destroyed in a hurricane, it might not be able to be built in the same spot because the setback line may have been moved further inland.

Real estate attorney Wayne Mumford suggested agents always disclose the act to protect them against potential liability.

"If the real estate agent fails to disclose and there is a storm, the buyers and sellers are going to turn on the agents," Mumford said.

Tom Maeser, president of the Fortune Academy of Real Estate, said many agents are unaware of the disclosure.

"My guess is this is not disclosed very often. Because of the tremendous number of new agents, it's conceivable that many may not be aware of this act," he said. "No one is taking it seriously, but what happens when we have a hurricane and that buyer says 'Nobody told me?'"

Maeser said the school teaches about the law and disclosure.

The Coastal Carolinas Association of Realtors held a seminar Wednesday to educate agents on the law.

At the seminar, Bill Eiser, oceanographer with Ocean & Coastal Resource Management said a failure to disclose will not affect the legality of the sale.

The Resource Management office can inform property owners where setback lines are on their property.

Eiser said some investors and developers who want to build close to the beach have told him that they don't care about the erosion history because they won't own the place when erosion hits.

Setback lines are based on the average annual erosion rate of the beach in the last 40 years.

Mumford said there was much talk and circulation of the disclosure documents after the act became law, but there's not much talk today.

"I can't remember when we've had a contract come in with the beach disclosure attached," he said.

Realtor Judy Lowe with Coldwell Banker Chicora said she attended many seminars on the act when it was passed but hasn't heard much about it for quite a while.

But she plans to attend the Realtor association's next seminar on the act in July to update herself.