2024 Conference Presentation- Economist John Hunt by Coastal Carolinas Association of REALTORS

Coastal Carolinas Association of REALTORS© Market Update February 8th, 2024 John Hunt – ViaSearch/MarketNsight jrhunt@marketnsight.com (770) 419-9891 Your Market…. In Sight

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Speaking of Being Right……. What Did We Say In July 2022???

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GRMCA Annual Meeting Housing Market Forecast July 28, 2022 John Hunt – ViaSearch/MarketNsight jrhunt@marketnsight.com (770) 419-9891 Your Market…. In Sight

Many pundits are saying that Rising interest rates will help increase inventory as housing demand cools. The exact opposite is going to happen. Inventory is going to get worse. The reason? The second biggest demographic group, The Boomers, are sitting on their homes when they should be selling them to take advantage of skyrocketing prices. . Why aren't they moving? Because there's nowhere for them to go. Now, even if they could find a place to go, they will not trade in their 3% mortgage for a 5% mortgage. 8%!! Your Market…. In Sight

We Were The First To Predict The “Lock In” Effect

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Is There a Housing Shortage? There Was Already a Housing Shortage Before the Pandemic. The Pandemic Housing Boom Made it Worse... …And Current Market Conditions Will Only Deepen the Crisis. Your Market…. In Sight

Total US Housing Starts and US Population Total Starts

Population

4000

340

3500

330 320

Total Housing Deficit

2500

310 300

2000 290 1500

Population In Millions

Total Starts In Thousands

3000

280 1000

270

20 22

20 21

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20 09

20 08

20 07

20 06

20 05

20 04

20 03

250 20 02

0 20 01

260

20 00

500

Axis Title

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Inventory and Months of Supply Trending Myrtle Beach, SC 8500

8,500 Unit Annual Housing Deficit

8000 7500 5

7000 6500 6000

Inventory

5000 4500

4000 3500 3000

2500

Months of Supply

5500

2000 1500

1000 500 0

2 1 2 1 2 1 21 21 2 1 21 21 21 21 21 21 2 2 2 2 2 2 22 22 2 2 22 22 22 22 22 22 2 3 2 3 2 3 23 23 2 3 23 23 23 23 23 23 n - b - r- r- y- n - l - g- p- ct- v- c- n - b - r- r- y- n - l - g- p- ct- v- c- n - b - r- r- y- n - l - g- p- ct- v- cJa Fe Ma Ap Ma Ju Ju Au Se O No De Ja Fe Ma Ap Ma Ju Ju Au Se O No De Ja Fe Ma Ap Ma Ju Ju Au Se O No De

Total Inventory

Your Market…. In Sight

Months of Supply YTY

The National Media is ALWAYS 2 Months Behind MarketNsight!! In June 2022, We Reinstated Weekly Market Updates as Rates Began Exploding

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Want to See April National Headlines Today??? Pending Sales From a Few Days Ago…….

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8.00% 7.75% 7.50% 7.25% 7.00% 6.75% 6.50% 6.25% 6.00% 5.75% 5.50% 5.25% 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3.50% 3.25% 3.00% 2.75% 2.50%

First Time Above 5.25%

7.76%

7.08% 35%

16 Weeks Over 7%!!

30% 25% 20%

6.63%

15% 10% 5% 0%

5.25%

-5% -10% -15% -20% -25%

2022 Bottom

-30%

2023 Down 13% YTD 2023 Down 22% vs 2019

-35%

-37% -40%

On Nov 14th We Said The Bottom

-33%

Pending Sales YTY Trend

30 Year Fixed Rate

Weekly Pending Sales YTY % Change Jan Week 1 2022 Through January 31st, 2024

Was Near. We Were Correct!!

-45% -50%

3 3 4 2 3 2 3 2 2 2 3 2 3 2 3 2 2 3 2 3 2 3 3 3 2 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 202 1 W W tW tW tW W tW r W r W rW rW W W W lW W lW W W W W W W W W J an F eb a rc h Apri Ma y J une J uly ugus Sep Oc N ov D ec J an F eb a rc h Apri Ma y J une J uly ugus embe c tobe m be m be nuary M M A A ept O N ove D ece J a S

30 Year Fixed Rate

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Pending Sales v Previous Year

Pending Sales v 2019

The Stages of Grief…… 1. Denial: this can't be happening! 2. Anger: Ugh, Stupid Fed! 3. Bargaining: maybe if I adjust my price point, I can buy a house? 4. Depression: well, I'm just not going to buy a house in my lifetime. 5. Acceptance: at least I'm not paying 17% like my parents. Put in an offer! Your Market…. In Sight

There is Some Good News….. Despite The Fed!!

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Job Report Projections vs. Reality Projected

Actual

January 2023

187,000

517,000

February 2023

225,000

311,000

March 2023

238,000

236,000

April 2023

180,000

253,000

May 2023

190,000

339,000

June 2023

240,000

209,000

July 2023

200,000

187,000

August 2023

170,000

187,000

September 2023

170,000

336,000

October 2023

170,000

150,000

November 2023

190,000

199,000

December 2023

170,000

216,000

Source: CNBC

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“Hard Landing”? “Soft Landing”? “No Landing”?

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https://www.marketwatch.com/story/economists-embrace-notion-of-no-landing-for-economy-in-2024-a45fd60e

How Is Myrtle Beach Doing??

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Horry County Resale Individual and Top New Subdivisions

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Population Change 2010-2020

https://maps.geo.census.gov/ddmv/map.html

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Myrtle Beach

https://data.bls.gov/timeseries/LAUMT453482000000005?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

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Myrtle Beach

https://data.bls.gov/timeseries/LAUMT453482000000005?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

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https://netmigration.wisc.edu

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https://netmigration.wisc.edu

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What About Closings??

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Ja Fen- 2 0 M b-2 ar 0 Ap -2 M r- 20 a 0 J uy- 2 n 0 J u -2 0 Au l- 2 0 Seg- 2 0 p O -2 ct 0 No -2 0 Dev -2 0 c Ja - 2 0 Fen- 2 1 M b-2 ar 1 Ap -2 M r- 21 a 1 J uy- 2 n 1 J u -2 1 Au l- 2 1 Seg- 2 1 p O -2 ct 1 No -2 1 Dev -2 1 c Ja - 2 1 Fen- 2 2 b M -2 ar 2 Ap -2 M r- 22 a 2 J uy- 2 n 2 J u -2 2 Au l- 2 2 Seg- 2 p- 2 O 2 c 2 No t -2 2 Dev -2 2 J ac- 2 2 Fen- 2 3 M b-2 ar 3 Ap -2 M r- 23 a 3 J uy- 2 n 3 J u -2 3 Au l- 2 3 Seg- 2 p- 3 O 2 c 3 No t -2 v- 3 23

YTY Change

Myrtle Beach YTY Change in Closings

140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50%

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First Time Above 5.25% New YTY Change Resale YTY Change

What About Price??

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Ja Fen- 2 0 M b-2 ar 0 Ap -2 M r- 20 a 0 J uy- 2 n 0 J u -2 0 Au l- 2 0 Seg- 2 p- 0 O 2 c 0 No t -2 0 Dev -2 0 J ac- 2 0 Fen- 2 1 M b-2 ar 1 Ap -2 M r- 21 a 1 J uy- 2 n 1 J u -2 1 Au l- 2 1 Seg- 2 p- 1 O 2 c 1 No t -2 1 Dev -2 1 J ac- 2 1 Fen- 2 2 M b-2 ar 2 Ap -2 M r- 22 a 2 J uy- 2 n 2 J u -2 2 Au l- 2 2 Seg- 2 p- 2 O 2 c 2 No t -2 2 Dev -2 2 J ac- 2 2 Fen- 2 3 M b-2 ar 3 Ap -2 M r- 23 a 3 J uy- 2 n 3 J u -2 3 Au l- 2 3 Seg- 2 p- 3 O 2 c 3 No t -2 3 Dev -2 3 c23

YTY Change

Myrtle Beach YTY Change in Closed Price YTY Change

35%

30%

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December 2023 Up 24% Over 2021 Up 44% Over 2020 Up 67% Over 2019

25%

2022 Up 22% YTY

20%

2021 Up 14% YTY

15%

December Up 8% YTY

10%

2023 Up 7% YTD

48 Year Average = 4.6%

-5%

2022-2023 Monthly Total Pending Sales YTY Change by Price Myrtle Beach Jan-22 Sep-22 May-23

Feb-22 Oct-22 Jun-23

Mar-22 Nov-22 Jul-23

Apr-22 Dec-22 Aug-23

May-22 Jan-23 Sep-23

Jun-22 Feb-23 Oct-23

Jul-22 Mar-23 Nov-23

Aug-22 Apr-23 Dec-23

70%

YTY Change

50% 30% 10% -10% -30% -50% -70% k 200 $ r e Und

$20

Your Market…. In Sight

$ k to

300

k $30

$ k to

500

k $50

$ k to

700

k $70

$ k to

r Ove

$1M

What are Myrtle Beach’s Hottest Markets??

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Robert Dietz – NAHB Chief Economist Entry-level buyers are driving much of the activity. Sales of homes in the $200,000 to $300,000 range increased more than 35% in October from a year earlier. Demand for starter homes is expected to fuel continued sales growth if builders can ramp up construction quickly enough. Builders face a number of challenges, such as high land costs, labor shortages and rising material prices.

"The markets that are going to grow are ones where builders can add that entry level product." Your Market…. In Sight

Myrtle Beach Top HSD For New Home Sales 2021 High School

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Units Sold

Avg Price

Carolina Forest

1038

$345,245

North Myrtle Beach St. James-Horry

1001 487

$327,569 $325,278

Myrtle Beach High

463

$441,122

Conway

427

$239,867

Socastee

420

$322,853

Loris Waccamaw

276 264

$237,146 $377,741

West Brunswick

193

$310,524

Aynor

137

$241,198

Georgetown

$280,225

Myrtle Beach Top HSD For New Home Sales 2023 High School

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Units Sold

Avg Price

Carolina Forest

1761

$408,039

North Myrtle Beach St. James

1168 646

$422,336 $429,455

Myrtle Beach High

491

$547,915

Conway

452

$294,837

Loris

369

$309,982

Socastee West Brunswick

358 196

$370,443 $384,796

Aynor

154

$311,062

Waccamaw-Georgetown

$713,841

Georgetown

$368,918

In 2016, Sales Under $350,000 were 70% of the Market. Today, Sales Under $350,000 are 30% of the Market.

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How Do We Build in the $300’s??

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Carolina Forest HSD

$426k $142 PPSF $303k $152 PPSF $238k $160 PPSF

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Our Current Zoning is based on the demographic makeup of the world 20-30 years ago.

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• Disposable Income • No Kids!!! • Entertainment Oriented

The Location is the Amenity!!

We have the two biggest consumer groups in the country converging in the middle in terms of square footage. Unfortunately, the middle…… Is missing. We need more 1750, 1500, 1250, and 950 SF Product The Market Wants it….. Most Cities are Predisposed Against Density Your Market…. In Sight

Missing Middle Housing

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Greenville Housing Forum November 2018 Keynote Speaker: Karen Parolek of Opticos The Leading Expert in Missing Middle Housing Co Speaker: Me Attendees Included: • The Mayor • City Council Members • County Commissioners • Stake Holders • Builders • Realtors Your Market…. In Sight

The Missing Middle??? Multi-unit housing types such as duplexes, fourplexes, bungalow courts, and mansion apartments that are not bigger than a large house, that are integrated throughout most walkable pre-1940s neighborhoods, often integrated into blocks with primarily single-family homes, and that provide diverse housing choices and generate enough density to support transit and locally-serving commercial amenities.

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Missing Middle is…..

A Single Family Home

With a Duplex Next Door

Illegal In Most Cities Today!!! Your Market…. In Sight

Why Don’t We Zone This Way Anymore?? In the 1920s, the White House convened a task force to push cities to adopt zoning codes. Official documents did not mention race, but the members of the task force were outspoken segregationists, and zoning was seen as a method to keep certain neighborhoods white by keeping the price of homes high. https://www.jdsupra.com/legalnews/how-the-missing-middle-may-help-create-89060/

Government Sanctioned Socioeconomic Bigotry!!!! Your Market…. In Sight

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We are witnessing an all-out War being waged on housing affordability in our country. It is being waged not only by rising material costs, or rising rates, inflation or labor costs.

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It is also being waged by restrictive and exclusionary zoning. This is THE Defining Issue of Our Time We Are Starting to Make Some Progress…..

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Prairie Queen, Nebraska

https://opticosdesign.com/

July 11, 2023

https://austin.towers.net/austin-finally-faces-down-the-housing-crisis-with-singlefamily-zoning-reform/

https://fortune.com/2023/08/09/minneapolis-housing-zoning-real-estate-inflation-yimby-nimbyminnesota/#amp_tf=From%20%251%24s&aoh=16916566324178&csi=0&referrer=https%3A%2F%2Fwww.google.com&ampshare=https%3A%2F%2Ffortune.com%2F2023%2F08%2F09%2Fminneapolis-

https://www.businessinsider.com/houston-building-cheap-new-starter-homes-real-estate-construction-lots-2024-1

Forecast

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Permit Trend 1/2017 – 12/2023 Myrtle Beach Permits/Month

Monthly Year-to-Year % Chg

TTM Moving Avg Year-to-Year % Chg

Year-to-Date Year-to-Year % Chg

1400 1300

Pandemic Boom

1200 1100

No Lot Inventory High Rates

No Resale 100% Inventory New Homes 90% Surge 80% 70%

1000

60%

Start of Pandemic

900 800

50% 40%

700

30%

600

20%

500

10%

400

-30% 20

Your Market…. In Sight

0 22

-20%

100

-10%

200

300

Myrtle Beach Permit Forecast 2024 Permits

Year-to-Year Change

90%

80% 70%

Closings (000's)

60%

50%

40%

30% 20%

10%

-10%

-20% -30%

-40%

2 20 3 24 f

Your Market…. In Sight

-60% 06

1 05

-50% 04

What’s Your Forecast???

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https://markets.businessinsider.com/news/stocks/housing-market-forecast-outlook-home-prices-mortgage-interest-rates-experts-2023-9#2-barbara-corcoran-2

https://markets.businessinsider.com/news/stocks/housing -market-forecast-outlook-home-prices-mortgage-interestrates-experts-2023-9#2-barbara-corcoran-2

Coastal Carolinas Association of REALTORS© Market Update February 8th, 2024 John Hunt – ViaSearch/MarketNsight jrhunt@marketnsight.com (770) 419-9891 Your Market…. In Sight