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Charleston Residential Market
I have some exciting news regarding The CMR and Charleston. A major national business magazine has requestedme to provide insight into the “front lines” of the Charleston market. The reporter of this project has an excellentreputation so I look forward to working with her and her staff. This is not going to be a one shot deal or article butmore of an ongoing piece for the magazine and it will include other markets in addition to Charleston. The magazinewants local observations that will be interesting because they will be unfiltered (although somewhat edited)viewpoints about what is happening on the streets of America. The magazine plans to invite other readers to commenton the information we provide. At the end of the year, the magazine may have a body of work that may turn into amagazine piece. I will keep everyone updated as I get more info on how this project is going to work. It should befun and it will bring some national attention to the Charleston market.
So go buy and sell some homes so I canreport some positive news that reflects improving market conditions in the coming months!
My initial goal is to provide a 5 year snapshot of the Charleston market for the national reader who may not befamiliar with our market. I hope to provide more details and different perspectives of the Charleston real estatemarket instead the same old macro statistics. Hopefully I will get the opportunity to show some trend analysis for certain micro markets in Charleston which will demonstrate how many unique and different micro markets we haveacross our wonderful city.Below is what I submitted over the weekend along with the chart:
The past 5 years have been a roller coaster for the Charleston real estate market. Our market peaked in 2006 but it has held up better than many other markets around the country because of the quality of life in Charleston and our very diverse economy. However, Charleston's real estate market is experiencing challenging times just like other towns and cities across the country and we have seen our single family home inventory more than triple over the past five years while sales volume has decreased 29% in the past year. The condo/townhome market inventory has alsotripled over the past five years and sales volume decreased 35% from 2007 to 2008. Due to increasing supply and decreasing demand, home prices have weakened in the Tri-County area in many segments of the market. The current dynamics of supply and demand are reflected for both detached and attached homes as the Months Supply hasincreased over 30% when comparing 2007 to 2008. The declining sales data for Charleston is directly related to fear in the market due to the economy and stricter underwriting guidelines by banks. As a result of the 45-60 day lag time between contract and closing date we will need to closely monitor whether thereduced home prices and lower mortgage rates will have a positive affect on our market during a non-seasonal period for real estate.
The interesting aspect of the chart below is the difference between average and median home prices. There is areason for this which is why we have to be careful when dissecting the macro stats of the Tri-County area. A problemI have with the MSM stats is that they should separate single family (detached) homes versus the condo/townhouse(attached) homes. These are two different markets which can easily be segmented instead of lumped together into onestatistic.The January numbers are down but keep in mind how seasonal real estate is and combine that with the problems andfear that persist in the markets from the September and October fiasco. In my opinion, these price declines are goodnews (unless you are a seller) and a natural occurrence that takes place when a market is trying to bottom out. Thisshould not be taken as bad news by the media considering the credit shock and housing issues we have experiencedover the past few years. Just remember that the quicker prices bottom out the more affordable the market becomesand once the economy stabilizes we will enter more normal real estate market conditions. Also keep in mind that thelow mortgage rates did not really kick in until after Christmas. I know that traffic and showings are up but thesenumbers will not be reflected in the local market stats until late February, March or April based on the time it takes toclose on a home. I continue to believe that existing market conditions present some excellent buying opportunities if you have a 10+ year strategy to live in the home you purchase. Do not forget the difference in buying a home versusa stock. Yes, they are both investments but there are major differences especially since your home is a tangible asset
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