Charleston Real Estate Update:

Yep, the market is truly showing some nice signs of life and the recent HUGE Boeing Announcement and Tax Credit extension will undoubtedly be a good shot in the arm to keep things moving at an improving pace through the Holidays.  That said, we still have over 10,000 properties that have expired or been withdrawn since January 1, 2009 according to the Charleston MLS.

As an expert  in the listing and sale of properties in the Charleston/Dorchester/Berkeley County area, I thought it was time to throw a lifeline to all of the folks reeling from the current changes in the real estate market.  The lifeline is VERY simple and does not vary based on a specific market area, specific price range, or clientele.

There are 3 basic principles that rule the ability and likelihood of a property to sell and 2 sub-principles...think of a 3-legged stool...if one is off, the other legs have to compensate

1. LOCATION- Although the most important, this is the one item that you cannot change, stage, spruce up, or otherwise effect.  A seller simply cannot move their property or generally change what it is surrounded by.
2. CONDITION- This is the BIGGEST opportunity for the seller to influence a Buyer's perception of their property through de-cluttering, staging, cleaning, repair of broken items, replacement of worn items, landscape improvements, etc.  In short, your curb appeal and the walk to the front door SET THE STAGE for how the Buyer will analyze the rest of the property.  basically if the outside appearance is immaculate, a Buyer will likely "float" their way past some minor obstacles inside.  if the wrong first impression is given, the fine-tooth-comb is brough out.  It really is like starting a showing with 1 strike against you.  So imagine if your price is on the high end and your property is not in perfect condition...NO WAY to compete with the army of HGTV watching and doing folks out there.
3. PRICE- This is the dreaded one that folks do not like to pay attention to...the game is changing every day as it relates to price but luckily, it is the one area where the data is really in black and white and can be verified by every Buyer and Seller.   In short, why on earth would someone pay more for your home than for the same or similar home in your area??? You've got it, location and condition!  If you don't have those 2 items as differentiating factors, listing the property at or near the upper end of yoru target price range is a huge waste of time and energy.  I am a big believer in providing objective advice ie: THE TRUTH to a prospective seller, knowing that I cannot help everyone.  I can however help someone that is willing to understand 2 things:

                          a)unless you have personally sold over 300 properties in the last 5 years, it is likely that I have a leg up when it comes to the experience of preparing, pricing, and negotiating the sale of real estate in the Charleston market...I do however need you as the seller to "sell" me on why you purchased your property and the attributes that make it special to you.  if your property is too unique, the appraisal game may catch you and force you to fit into a neat little box they can categorize away to Cover their Rears (depends on the appraiser, their experience, and confidence of course)

                          b)the market DOES NOT CARE what a seller wants or needs to get out of the sale of a property.  Put simply, if the market tells you that the home is worth $500,000 and the reality of your situation is to be moved to Atlanta in 90 days (and you want to have your home sold by then) but the average time on the market is 180 days, you will have to price your home aggressively at $450,000 or below to ensure that your life is not thrown completely off track by trying to play a game with the market.  There are tricks to the trade but statistics tell a pretty good story of what to expect as long as you pay attention to balancing the 3 legs.

Work with a Realtor that actually SELLS property...experience is VERY important but if someone has 1 year of experience but has listed and sold 20 properties, they are on the right track and should be listened to...your Aunt Betty's neighbor who got their license to "invest" in their own properties and to list the ladies in the bridge club, may very well NOT BE THE BEST CHOICE!  Not to say there aren't some excellent part-time agents in the market but would you want heart surgery performed by the guy that had done 2 or 300?

All of these Expired and Withdrawn listings can really be summarized fairly easily into: folks that were unrealistic in their pricing expectations versus their condition and location, folks that worked with an agent that "bought" a listing by listing it too high initially and therefore losing the most critical time in a listing (first 60 days) before lowering often below where it would have been sold if priced aggressively from the beginning, working with an agent that took AWFUL pictures that did not showcase the proper attributes of the home or property, or folks in an unfortunate mortgage position that possibly inhibited them from selling.

There are lots of folks that do in fact fall into that last category, but there are just as many folks that are stuck in 2006 wishing and crossing fingers for a return to 2006 pricing.  Now it is time for that REALITY CHECK!!!

1. If you owned a home that was worth $500,000 in 2006, it is likely worth $375,000-$400,000 today.  Even more eye-opening than that though is that pricing is likely to remain flat or increase just slightly for the forseeable future...assuming an annual appreciation of 5% even(which is aggressive), it will take you 5+ years to get back to that $500,000 level...oh and by the way, that does not take into account that you would have likely paid at least that $100,000 in mortgage payments over the 5 year period.
2. This is the one that gets people...your life change that warranted the decision to sell, probably will not wait that 5+ years so you can either take a hit now (assuming your mortgage makes that possible) and work with a great agent to get an equal or better deal on your subsequent purchase...or stay in a home that may not adequately address the needs of you or your family.  The same holds true with an investment...in the end, the other side of the coin ie: "losing some" does happen on occassion.  Throwing bad money after good money never makes sense!  So re-allocating the monthly amount spent carrying a sour investment, to one of the multitude of winning investments available today turns you from a collector of properties to an investor objectively managing your portfolio.

I you or someone you knows wants this kind of realistic, experienced, and focused advice on how to sell a property, buy your home, or manage your investment portfolio, I am here to help with the best team in the business (www.YourWattsTeam.com) and look forward to being the voice of reason and lifeline you need to get back on track and focus on THE TRUTH of what needs to be done to survice and thrive in today's real estate market!

Sincerely,

Josh Watts

www.LifeinCharleston.wordpress.com

Your Watts Team- Leader (www.YourWattsTeam.com)

Coldwel Banker United, Realtors

843-478-8228

joshwatts1@gmail.com

Does anyone have experience with web-based CRM tools such as www.salesforce.com or Sales Nexus?  I really like the cability of drip email campaigns, storing files with customer files, and of course client interaction.  That said, ease of use is KEY as is support/training from the vendor and customization.

I lead a team of 5 full time and 2 part time agents representing several developers/builders as well as general brokerage clients and currently have over 150 listings.  Obviously streamlining as many processes as possible is KEY for my sanity as this profession is obviously harder these days with more handholding of every transaction and its details.

I would love any dialogue.

I just thought I would bring this subject up to see how others are working through this difficult issue.  I have a young daughter and my wife works with me along with other team members (www.yourwattsteam.com) and we represent several builder and developers along with general brokerage clients.

Between the different communities and general brokerage listings, we are currently servicing over 150 listings in addition to working with buyers and being the preferred Agent for SC state employees in the Charleston region.  The follow up and extensive communications we have put in place are helping us make it through the slower market but they are also creating a 15 hour/day work schedule.  There isn't enough income to bring in an administrative/office assistant right now and the mundane but necessary tasks are nonstop.

I have averaged in excess of 4000 minutes/month on my cell phone and have killed the tracball on 3 Blackberry Pearls in less than 18 months.  So now that everyone gets the picture, how are you dealing with these issues and trying to have some semblance of a balance?

This is just to stat a discussion on the lack of developed lots that will be realized in the Charleston, Dorchester, Berkley Counties 3-7 years from now.  A Builders are forced to be extremely short-sighted by the lending difficulties, they are not committing to future neighborhood positions.  This seems like common sense to some but the reality and trickle down of this will be realized when starter home prices for first time buyers and the down size purchase prices spike dramatically when current lot inventory runs out and a mad scramble for lots takes place.  This is the reality of how the large builders operate as they react to today's lot price while ignoring tomorrow's demand.  Over 1000 people/month move into our Tri County area and that has not shown signs of slowing down.

I know this sounds crazy but, if a developer cannot get commitments with realistic deposits from builders of volume or tract housing, they will not develop these lots or may not purchase the property at all.  The net effect is that the 2 year lag time from raw land purchase through finished lots will create a severe void in the market, driving lot pricing and subsequent home pricing back up in several years.

The most obvious affected market for this is the volume or National/Regional Builder product that serves the majority of the affordable housing needs in the Charleston metro market.  "Retail Lot" markets will be affected as well but not as noticeably on the surface.

The reality right now is that great smaller builders are being severely penalized and handicapped from taking advantage of the large builder pull back because banks' pendulums have swung too far to the right.

It seems strange to me the lack of information on evaluating and taking a property from raw land trough finished lots.  I have been a witness to this process since childhood with my father's involvement in over 30 residential development as either an investor or the general contractor and am in the process of creating a book to help real estate agents, brokers, and owners alike through this process.  The absolute biggest mistake made by all parties is to over estimate the profit potential, under estimate the required capital, and ignore the end user as the guide.

Let me kno if you would like to contribute or have any specific topics to be covered.  I have a pool of actual development experts who have committed to this idea to help educate professionals and the public as a whole.