Charleston SC Market Report
AUGUST 2008
Mt Pleasant , Charleston SC Market Conditions. Have we bottomed out?
With preliminary numbers of residential units sold for July 2008 in from the Charleston Trident Association of REALTORS (CTAR), it appears we may have hit or are within months to the bottom of the current housing market slump.
With 680 residential units sold in July 2008, this total marks the lowest home sales figure in July since 1997 when 645 units sold.
31% decrease from June 2008
42% decrease from July 2007
January through July sales followed the trend of a 33% decrease from the same time last year, if the trend continues through the end of 2008 a total of 8500 units would have been sold. A rollback to 2001 sales numbers of 8269 units sold.
Will the trend continue? Four of the eleven years compared show a slight increase in August sales and then a gradual decrease through the third and fourth quarters. The remainder of the study years showed a continued decline in sales through November with the earlier years (97-05) showing an increase in sales in December. 2006 & 2007 indicated a further drop in sales heading into the new year. I would predict the Charleston area would follow that trend into the new year.
Inventories Should remain stable through the holiday season with an influx of homes coming on the market in the first quarter of 2009. There has been an increase in the sales of current inventory home over 180 days on the market (DOM). The Sales Price/List Price ratio was 94%.
JULY 2008
All real estate markets are local. Even here in the tri-county area we have different markets. Goose Creek and Moncks Corner the prices are holding as opposed to Mt Pleasant & Daniel Island where bargains can be found on every street corner.
Overall home sales have fallen as much as 33% in the first quarter as compared to the same time last year. In March of '07 1137 homes sold compared to 752 sold in March of '08. In the same time frame the median price of homes sold fell 6% from $211,000 to $198,000.
The downward trend continued through July 2008 with year to date (YTD) sales at 4640 units sold compared to 6931 units sold YTD 2007. A 33.1% decrease in activity over last year.
What does it mean for the Buyer?
As a buyer it means there are bargains to be had in today’s market. Historically as interest rates climb on 30 year mortgages (which they are doing now) home prices will decline (which they are doing now). Will you be able to time the bottom of this market? Probably not. Are we at the bottom yet? I would like to think we're almost there but I would be lying if I said I knew for certain that it's here.
Should you buy now? I would. The value is today. Neither you nor I can say the same for tomorrow, next week or next month. The difference of 30 days could mean an entire point added to your payment. (From 6%-7% that's an additional $250 a month on a $300,000 mortgage payment).
There will come a time in the near future that rates will continue to climb as the decline in home prices slows dramatically. With elections coming this fall, increasing gas prices and the overall lack of confidence in the economy this could happen quickly and you could find yourself paying a larger then needed mortgage payment.
What Does It Mean for Sellers?
For most sellers who have owned their homes for more then 5 years and didn't refinance during those years you can expect to make a realistic return of 3-4% per year. If you had owned the home for 10 or more years expect that return to be much higher.
For sellers who purchased with no money down, less then 20% down or refinanced at higher then purchase price values during the past five years you may need to accept the fact that you will need to take a loss on your investment. My advice to home owners that NEED to sell is put your home in top showing condition and price it competitively. Spend a little bit on upkeep and needed repairs, you'll be rewarded with a higher selling price.
If you are behind in payments, Call your note holder and work something out. They don't want your home, they want money. Most times as long as you're talking and paying them something you'll get through it.
Buying and Selling?
It’s a good time to be moving up in this market. Granted ALL housing prices are depressed, but the more expensive homes are greater bargains. An example is: your home is worth $150,000. In today's market it would sell for 10% less or $15,000 less. The home you wish to purchase is $300,000. In Today's market it also would sell for 10% less or $30,000 less. You've saved $15,000 by buying and selling in this market. In a good market (which will return eventually) your mortgage would have been on $300,000 where as now it is based on the $270,000 price. A difference of (at a rate of 6%) about $150 in interest per month. You get the bigger house at a smaller payment.
As you can see there are benefits of buying and selling in a down market.
Houses sell everyday in our area. The majority within 60 days. If priced right for condition, yours can sell too. If you're trying to pay off every debt you've incurred in the past 10 years through the sale of a maxxed out refinanced home, the only thing I can suggest is to find a second job. An over priced home will not sell in this market. There is too much inventory on the market competing for the buyer’s dollar.
