Here is a breakdown of sales in the Charleston SC real estate market through the end of June. The stats are from the Charleston Trident Area Realtors Association (CTAR) Multiple Listing Service, and the ones I am focusing on are total number of solds, average sale price, median sale price, average days on the market (DOM), inventory numbers (active listings) each month, and absorption rate.
One quick note--absorption rate is calculated by dividing the currently active listings by the sold listings. This figure shows how many months it would take to sell out of inventory at that month's rate of sale.
Month Solds Avg Price Median Price DOM Current Inventory Absorption Rate
Jan 411 $268,401 $179,181 112 10,329 25.13
Feb 424 $255,927 $185,995 110 10,498 24.75
March 600 $258,382 $185,463 125 10,688 17.81
April 555 $274,594 $184,000 121 10,710 19.29
May 687 $267,693 $192,900 119 10,818 15.74
June 710 $271,016 $195,000 118 10,871 15.31
Average: 3387 (total) $266,002 $187,090 118 10,652 19.67
The Charleston SC real estate market wasn't as greatly impacted by all of the real estate turmoil the last few years as many markets were across the nation. However, our market has seen declines. Charleston is better poised to make a recovery sooner than most markets. These numbers do seem to show things may be slowly getting better.
Forbes released a report in January, the "Top 25 Markets" in the US. They examined major metro areas to see which markets were best poised to make a recovery. They didn't rank the markets from 1-25, but they did list Charleston among the 25. They predicted prices would fall in Charleston an additional 1% over 2009 before finally hitting bottom.
So, the million dollar question, Have we hit the bottom?
The numbers so far in 2009 look promising, with sales increasing, average prices increasing, and absorption rate decreasing.
There are a few factors at work here. First, sales traditionally increase in the Spring and Summer. Plus, the $8000 first time buyer tax credit has brought out many home buyers that otherwise wouldn't have bought a house.
On the positive side, with the tax credit expiring at the end of November, more first time buyers should be entering the market. If we have hit bottom remains to be seen, but the more people sense that the bottom is here, the more motivation we will see--buyers may sit on the fence in a down market, waiting for the "bottom", fearful of overpaying. However, once it appears that bottom has hit, then traditionally there will be an influx of buyers fearful of missing the opportunity and buying on the uptick.
Could the tax credit be extended, maybe even expanded? Could they increase the credit amount? Could they make it eligible for buyers other than just first time buyers? Any of these would help the recovery, and get more buyers off the fence, as well as bring buyers into the market that otherwise would not be looking to buy (such as move up buyers).
Another positive factor for Charleston is the fact that it is a strong market well poised for a recovery. The Charleston SC real estate market still looks to have good potential for the future, based on several factors: destination location (coastal), strong economy, and cheaper that many markets--especially in the Northeast, the largest feeder market for Charleston.
It would be wise to remain cautious regarding the Charleston SC real estate market. Keep in mind, there are still short sales and foreclosures lurking out there. I haven't checked the numbers, but based on recent surfing on the MLS, it would appear that short sales and foreclosure sales have dipped in the last few months. But I believe this to be misleading.
There was the foreclosure moratorium imposed by the federal government, and the SC State Supreme Court also enacted one a couple months back--this was done to allow more time for home owners with Fannie or Freddie backed loans to seek loan modifications. So this has held up many would be foreclosures.
Also, half of loan modifications wind up in foreclosure. Not all home owners that received the reprieve will be eligible for a modification. Of those that do, many will still wind up in foreclosure down the road. So I think it is a safe bet we will still see at least another wave of foreclosures. Getting through all of the short sale and foreclosure inventory will help things and take us from recovery to prosperity faster--but that is a whole different subject to blog about.
Bottom line, depending on your objectives and time frame, there are great deals out there on the Charleston SC real estate market for buyers, especially first time buyers. It will be a long time before we see the fast appreciation days we saw a few years ago (and we probably won't see it like that again, ever), however, that doesn't mean investing in Charleston SC real estate isn't a good idea in the current market conditions--it looks to be a sound investment, but not a get rich quick idea.
Stay tuned, I will have future posts regarding stats of specific towns within the Charleston SC real estate market.
Looking to sell or buy in the Charleston SC real estate market? Visit my website for helpful information for buyers and sellers of Charleston homes.
Jeff McIlhenny is a licensed Realtor and Broker with Weichert Realtors Palmetto Coast in Mt Pleasant SC and serves the entire Charleston SC real estate market. He can be reached at 843-452-2953 or firstname.lastname@example.org.