Wednesday, March 23, 2005


I will not be blogging much for a few weeks because I plan to reside in Myrtle Beach off and on for a few weeks. Some of the time, I will relax with my family and some of the time I will work on the sale of our condominium rental business. Twenty 20 years ago, I promised my wife that we would retire at 55 if she would help build our resort rental business. (My great-grandfather, grandfather, and father all retired near the age of 55.) I may break my promise by a few months as selling a business is harder than building one. Only those who have built a substantial business from scratch have the slightest idea of what I am talking about. Operating a successful business requires many skills and many sacrifices. Marilyn and I believe we are better people for having fought the fight. Our marriage is strong after 33 years. We are blessed beyond measure.

Monday, Marilyn and I drove home from Myrtle the "old-way". We usually cut across country on "back roads". We can cut 20 miles and 20 minutes off the trip by taking several "short-cuts". It is amazing that Myrtle Beach has been the second fastest growing city in the United States for 40 years without access via interstate highways. Recently, the city hit a new gear. Millions and millions of baby boomers who have fallen in love with Myrtle over many years of vacationing there are now beginning to retire. Many are deciding to make Myrtle their first or second home. When one considers that there are 120 golf courses and 1700 restaurants in the area, one can begin to appreciate the attraction.

The "Grand Stand" is 60 miles long; sixty miles of beautiful beach with the accompanying moderation of temperatures that comes with the ocean. Myrtle is not the winter haven like Florida as the average high in the winter time is only about 40 degrees however, it is warmer in winter and cooler in summer than inland areas for many miles west.

The good news for Myrtle is that roads have been approved and are under-construction from all points. The main new additions are Interstates 73 and 74 which will cross about 2 miles from my ocean-front condos. These highways will give easy access to Myrtle from all the way from Michigan to New York and from Tennessee to Florida. The two highways are interesting because of the way they separate on their way from Michigan to Myrtle Beach in order to go near large population centers. They join together a few times but separate where needed. In the process they each cross other Interstates such as 95, 85 and 77 to give access from other areas. Finally they will complete the natural ending of Interstate 20 that now goes across the country but stops 50 miles from the beach in Florence. The connection to I-95 near Savanna GA and again near Lumberton NC will give easy access to Myrtle for north-south travelers.

Some folks are confused as to why so many North Carolinians vacation in Myrtle. There are two answers; unlike NC beaches, the wide flat beach at Myrtle is similar to the wide flat beaches of Daytona Florida and the distance to Myrtle is considerable shorter than to the outer banks of North Carolina. To put it another way, geography is the answer. The North Carolina coast butts directly into the Atlantic Ocean which makes the beaches relatively narrow and steep. The South Carolina coast is at an angle such that the waves come rolling into shore versus a more crashing pattern in North Carolina. The water temperatures are also effected by the geography. The Gulf Stream is able to flow up the coast and to stay near the South Carolina shore but it is pushed away from the North Carolina shore. This may sound insignificant but jump in the NC water and your breath is taken away. Through much of the year, SC water feels like bath water.

The water temperature is not nearly as important as what it does for the air temperature. It rarely snows in Myrtle because the Gulf Stream Water warms the air in the winter. My home town is often 10 degrees colder than Myrtle in the winter and 5 degrees hotter in the summer.


Two important trends are making a difference. The first is a benefit of high speed internet access. In our modern world, more and more folks have found that they can work from anywhere. Some can work full time from anywhere, others need to occasionally show up at the office year round and others can occasionally take a long break from the office if they have means of communicating regularly. Many folks now have the attitude that if they have to work, why not do so while watching the beauty of the beach.

The second trend represents a change in life style for the baby boomers. In the cycle of life, we tend to reach our peak level of disposable income at around 52 to 59 years of age. The disposable income peaks for two reasons; earnings typically max-out at this time and educational and other expenses for children typically decline sharpley during these years. A trend that has prevailed for many years has been that families buy the "big house" when their children are near high school ages. High school students bring friends over for visits and having the big house is desirable as a status symbol. Families can typically afford the "big house" at this point in their lives as the equity in their first home provides more than enough for the down-payment. The interesting developing trend is that "empty-nester's" are down-sizing while putting the excess equity into second homes.

Tax laws have favored first and second homes for many years. Maybe 5 years or more ago an additional home-ownership benefit was passed. The law allows one to sell ones residence (of two years or more) and pay no capital gains taxes. Furthermore, the tax benefits of owning rental property are not as powerful as a number of benefits allowed on first and second homes. The first and second home owner can allow friends, family and associates to use the home for a fee and the owner usually owes no tax on the "incidental rental". The result is that many baby boomers are selling the "big house" and using the proceeds as a down-payment on a smaller first home and a second beach home. The Myrtle Beach night spots are hopping with the partying 47 to 59 year old "boomers".

On the way home Monday, we saw new roads paralleling the old roads much of the way. Both NC and SC are moving at quick-speed to build access to the beach. Las Vegas Nevada is "Boom Town, USA" but Myrtle Beach has a growth rate almost as big. Baby Boomers want to retire to where the action is or they at least want to own a second home there.

When all the roads are completed, Myrtle Beach access will spur further development and of course add value to prime located beach property. Roads are only part of the story. Airline traffic is now greater than before 2011. Flights have been added from numerous cities, including connections to European locals. The decline in the dollar have made a Myrtle Beach vacation very inexpensive for Europeans and 1 of 3 beach front condos are now being purchased by Europeans in a number of locals.

One can never know how long a trend will last, however, they trends usually last longer than initially predicted. The 47 year old boomers still have years before they reach peak earnings. Millions of Americans can afford a second home. Will these folks suddenly decide to put more money into the stock market? The wealth of Americans is at an all time high and disposable income is at record levels. I believe the records will be broken year after year for at least 4 more years. It might be wise for me to wait a few more years before selling the business but a promise is a promise. It is time for me and my wife to take an extra walk or two on the beach and let others worry about reserving vacations for others. All roads lead to Myrtle Beach but my wife and I are looking forward to spending more time in Myrtle versus traveling to and from.