Charleston Real Estate Market Update July 2007

First, the numbers.  Then we can go into interpretation. 

July 2007 total versus July 2006:  

Overall including all residential

Sold Units: 1070 vs 1465

Average Sales Price: $315,000 vs $300,000

Inventory:  10432 9.8 months vs 8483 5.8 months

Now, the same numbers for townhomes and condos

Sold Units: 251 vs 349

Average Sales Price:  $265,000 vs $225,000

Inventory:  2857 or 11.4 months vs 2347 or 6.7 months

 And Single Family

Units:  784 vs 1026

Average Price:  $342,000 vs $335,000

Inventory:  6801 or 7.3 months vs 5655 or 5.5 months

 Sales Peaked in July 2005 at 1553 overall residential

It doesn’t take a financial expert to see that in 2005, investors were looking for alternatives to the Securities Markets, where they felt vulnerable.  The securities market is stronger now, and let’s face it…it’s a hell of a lot easier to go online or call your broker to invest in securities than it is to flip houses or deal with renters.  That’s the extent of my commentary related to the tie-in with securities.  Interest rates were very low in 2005, still fairly low in summer 2006, and they’re higher now.  That means that for primary residence purchases, those that can wait, are waiting. 

This is a blog, not a newspaper column, so you tell me.  Are some of you waiting for prices to come down?  My guess is, probably so.  Around the water cooler, talk is that prices are coming down.  But the real numbers don’t reflect that.  The buyers we have been working with are willing to pay to get exactly what they want.  90% of the buyers with whom we work start with a monthly budget figure, and work from there.  I don’t know how much of that has to do with the way we guide our buyers.  But that’s a different story.  Of all the buyers we’ve worked with recently, one has started with his criteria, and then negotiated downward, versus starting with a price (directly connected to a payment), and then searched for the most home they could find for that amount.  Does that make sense? 

Averages can be very misleading.  In Charleston, all it takes is a few ocean front or downtown sales to drive up the numbers.  I recently had a buyer client ask me for a report on a specific zip code.  29412, which is in James Island.  Here is the report.

Sales and Inventory History

Saturday, August 04, 2007
Category – Residential

Month Year Monthly Sales Avg ListPrice Avg Sale Price % Diff Sell/list Avg DOM Curr Inventory Months Inventory
January 2004 30 $225,765 $222,910 98.74% 60.0 187 6.23
February 2004 47 $226,481 $222,438 98.21% 82.0 167 3.55
March 2004 64 $222,894 $214,768 96.35% 52.0 148 2.31
April 2004 56 $237,296 $231,750 97.66% 73.0 133 2.38
May 2004 77 $247,477 $243,064 98.22% 58.0 113 1.47
June 2004 82 $247,330 $242,721 98.14% 57.0 118 1.44
July 2004 74 $270,009 $263,825 97.71% 35.0 134 1.81
August 2004 67 $235,317 $233,479 99.22% 39.0 124 1.85
September 2004 48 $252,111 $246,677 97.84% 38.0 117 2.44
October 2004 50 $225,221 $222,726 98.89% 44.0 127 2.54
November 2004 36 $269,284 $268,695 99.78% 101.0 136 3.78
December 2004 62 $264,438 $260,887 98.66% 58.0 124 2.00
 
Total 2004 693 $243,635 $239,495 98.30% 58.1 136 2.67
  
January 2005 37 $272,255 $267,438 98.23% 66.0 122 3.30
February 2005 55 $237,936 $233,938 98.32% 39.0 111 2.02
March 2005 61 $248,796 $244,632 98.33% 51.0 83 1.36
April 2005 44 $282,979 $278,688 98.48% 55.0 92 2.09
May 2005 65 $365,120 $352,738 96.61% 49.0 82 1.26
June 2005 58 $271,732 $265,134 97.57% 36.0 90 1.55
July 2005 58 $309,385 $304,750 98.50% 27.0 107 1.84
August 2005 59 $325,487 $315,737 97.00% 34.0 107 1.81
September 2005 51 $313,225 $309,449 98.79% 34.0 102 2.00
October 2005 64 $288,618 $284,765 98.67% 30.0 118 1.84
November 2005 50 $393,313 $382,044 97.13% 65.0 131 2.62
December 2005 44 $312,173 $304,434 97.52% 40.0 125 2.84
 
Total 2005 646 $301,752 $295,312 97.87% 43.8 106 2.08
  
January 2006 37 $315,370 $307,643 97.55% 44.0 144 3.89
February 2006 34 $336,710 $329,082 97.73% 50.0 168 4.94
March 2006 48 $331,996 $326,632 98.38% 49.0 182 3.79
April 2006 45 $301,653 $294,423 97.60% 31.0 212 4.71
May 2006 68 $398,917 $382,446 95.87% 64.0 248 3.65
June 2006 79 $310,501 $299,390 96.42% 52.0 286 3.62
July 2006 49 $318,496 $312,127 98.00% 46.0 317 6.47
August 2006 57 $327,172 $319,646 97.70% 69.0 339 5.95
September 2006 32 $346,309 $335,052 96.75% 57.0 359 11.22
October 2006 33 $364,677 $351,467 96.38% 63.0 368 11.15
November 2006 46 $382,576 $367,702 96.11% 76.0 340 7.39
December 2006 50 $296,468 $287,316 96.91% 78.0 317 6.34
 
Total 2006 578 $335,904 $326,077 97.07% 56.6 273 6.08
  
January 2007 40 $438,090 $426,033 97.25% 102.0 297 7.43
February 2007 44 $335,457 $326,190 97.24% 81.0 306 6.95
March 2007 60 $327,395 $311,932 95.28% 74.0 340 5.67
April 2007 54 $400,578 $385,334 96.19% 113.0 344 6.37
May 2007 56 $390,830 $371,406 95.03% 98.0 353 6.30
June 2007 49 $341,226 $330,051 96.73% 106.0 353 7.20
July 2007 44 $349,186 $336,703 96.43% 89.0 350 7.95
 
Total 2007 347 $368,966 $355,378 96.32% 94.7 335 6.86
  
Total 2004-2007 2264 $312,564 $304,066 97.28% 63.5 213 4.50

Even though we’ve drilled down into a smaller area, the report still seems to support the same conclusion, that prices are continuing to climb.  There are a lot of different ways to go with this conversation.  What’s relevant us an our clients is, what can we do with this information? 

For those of you that are trying to time your purchase, I would look more at interest rates, than average home prices.  It’s hard to build a solid case that the market is going down.  With the current inventory levels, we can help you use this to your advantage to get more for your money, or pay less for a home that exceeds your criteria.  The inventory levels ARE continuing to rise…but so are the average sales prices. 

For those of you that want to use your market knowledge to get the best price, or to sell your home for the best price, the answer is simple.  Just work with us.  There are many posts in this blog that tell you how to do it…and any agent has access to this same information.  They may not be able to look it up, but they do have the same access we do.  There is one point I can’t emphasize enough for  those of you that want to use your primary residence to get ahead financially.  SELECTION AND IMPROVEMENT CHOICES ARE EVERYTHING!!  When you go to buy your home, you need to look past what are your likes and dislike and consider very seriosly the next person that is going to live in your home.  Sorry for getting off track…we were talking about how to use the market to your advantage.  Will most of you will use the market to get more home, with more upgrades, with more space, on a better lot etc.?  Or will you stick to your criteria and try to save some money? 

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