The Good The Bad and The Ugly About The Charleston Real Estate Market

What are the questions people want answers to when it comes to our market?  It depends on who you are.  We come into contact with different groups of people.  Investors from outside the area that don’t know our market want to know is this is a good time to buy here or not.  The answer is clear.  Definitely not.  It’s pretty difficult to find a property that will cash flow because our prices have outpaced rent rates.  And our market has almost certainly not hit its bottom.   Another question is, how low will it go?  We really don’t know what will happen here since the supply of buyers has shrunk so rapidly.  Many of the buyers we were working with in 2005/6 were 100% financing either by necessity or choice.  Most of those would not qualify by today’s practices since the mortgage meltdown.  Sales in my backyard, the more affordable Summerville, have shrunk to half of last years number of August and September.  The buyers simply are not out there.  Inventory levels on the other hand are increasing beyond the 10 month level.  We thought we might not see this out in Summerville, but it’s here.   Is there a silver lining for buyers?  In 2005, homes that were priced correctly and in decent shape were selling in less than 30 days, with the average in many areas of Charleston being around 60 days.  What this meant to buyers is that they had to make decisions very quickly, or face starting the search process over again, only to be rushed again.  Sales/List prices were over 99%.  The big topic at real estate sales meetings was negotiating multiple contract scenarios.  At this time, most everyone, including many experienced investors, expected the trend of appreciation to continue.  There was no hesitation on the part of buyers, because the appreciation trend had been on a steady path for over 10 years.  We had little reason to believe differently.  Today, buyers are in the driver’s seat.  There is much more selection.  Sellers are much more anxious when they get some attention from one of the few real live buyers.  And if things don’t work out on the first pass, there is plenty more to choose from.  In fact, you’ll already have three or four choices lined if you’re working with a decent agent.  While the average sales prices will probably go down some more, it is possible to beat the curve if you do the right things in the buying process.  If this explanation doesn’t provide you with enough assurance to take the plunge you can always rent for six months and see what happens.  I’ve done enough moving for three people, and as painful as it is, this too shall pass, and before you know it, you’re settled into your new home.  In six months, there is still going to be 10-12 months of inventory, and prices are either going to be the same, or just slightly lower.  I’m referring to averages.  If you’d like specific information about certain communities like downtown or Isle of Palms or West Ashley, I’m happy to provide it within reason.   Please use the blog so that everyone can see your question and my response. 

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7 responses to “The Good The Bad and The Ugly About The Charleston Real Estate Market

  1. Sorry to hear things are tough in the real estate world. This too shall pass, it always does. Just like there is a glut of homes I can imagine there is a glut of realtors – speculators who wanted to make easy money…we all probably have to wait for that supply to clear out.
    ==
    We sold our house in Charlotte the first day it listed, rented here for a few months, and then bought. We bought the house for $40,000 under what it was listed for when we first toured it. But honestly, who really cares. In anything other than a flat market, you just always do your best to pick what you think is a fair value for a house knowing it is a moving target.

    I’ve never been one to buy a house as an investment. I buy a house because its a home…and hopefully over the long run it turns into an investment. Other people stress about what they paid and did they get the lowest price. I say again who really cares – you’ll never buy a stock at its lowest price you could have gotten, nor will you ever sell it at the exact high. We paid about $150/sqf for our house – in 2005/2006 in my neighborhood they were going for $170-$180/sqf…so yea I think we got a good deal. But then again I don’t plan on selling our house for several years. Don’t get me wrong, you want to make sure you get a good deal in anything you buy, but unless you are a speculator I think people are taking this downturn way too seriously (again, unless you are a speculator).

    All you hear on TV is doom and gloom – the media feeds the stock market bubbles and crashes and now the housing market rise and fall. This too shall pass. In 5 years I think my house will be worth at least $50,000 more than I paid for it. In between it may drop $25,000 but who cares. If I’m wrong, who cares. I like my house and my mortgage payment is better than paying rent.

  2. Hi Brett,

    Thanks for your comment Brett. I illustrates a point fairly well I think. If you’re moving, and you’re looking at buying versus renting, purchasing a home right now in Charleston is not a bad thing. If you’re going to move in two years, then it’s ridiculous to buy anyway.

    As for a home being an investment, I always try to help my clients make the best possible decisions from all angles. Sometimes renting makes more sense. When the lease is up and you’re ready to move you don’t have the responsibility and expense of selling it.

    Again, thanks for the comment. Have a great holiday.

  3. Mr. Adams,

    I’m looking to relocate to Charleston for a new position. I’m looking to buy between now, and January, but am torn between purchasing a partially finished home to get what we want in it (e.g. tile floors, island stove), or go with a house already built? What would you recommend is the average reduction selling price compared to the listing price (e.g. $360K house listed yet sold for $300k, perhaps)???

  4. Hi Bryan,
    First of all, I would appreciate the opportunity to earn your business. The Move2Charleston team will do a great job for you. Now, your question. It’s a matter of doing the work and being in control of your timing. $60k might be a bit ambitious, unless you find one that is overpriced; in which case the owner probably still thinks it’s worth what he’s asking, and wouldn’t be ready to negotiate…yet. Sales prices are still 95% of list price on average. So on average, you’d expect to negotiate about $18,000 on a $350,000 house. But you’re not looking to buy 20 houses, just 1.

    We always approach things on a case by case basis. If you’re looking for something that’s in plentiful supply, then you are negotiating from a stronger position. If you go shopping, and only find two choices that fit your criteria, then you could be paying the asking price, and be happy that you found exactly what you were looking for. Every home for sale has an owner, a private individual on the other side, so every situation is different. The averages include hundreds of these individual situations each month. So I’m always careful to use averages. Someone that’s been in thier home for 15 years, has lots of equity, and is anxious to move into thier new home has more room to negotiate, and more motivation than someone that’s been in their home for three years, and has to get a certain price to make the deal work for them or they have to stay put. Their personal situation is not your problem as the buyer, but it does affect your process in finding your home.

    All these questions are why it’s important to work with an experienced professional that knows how to sniff out advantageous situations for thier clients, as well as do the very hard work necessary to look at dozens of homes to find these opportunities. The best agents are constantly previewing homes every day and looking for opportunities for their clients.

    We look forward to hearing from you again.

  5. looking to move to the Charleston area by August O8. I’m looking for an “old” large home to remodel. I have a large family and need alot of room. A 2 story,as long as it has a roof, water,and I can get electric hooked up. A fixer-upper doesn’t scare. I would like to rent to own. I’d do all repairs. I would like to be near a water source and alot of trees (mossy) if possible. I know alot of people have what I’m looking for, put don’t realize it, or don’t want to both with it. This is a dream for me. I love country life. As I said, I have a big family and bigger dreams, but a small purse. It would take some time but I would put all my time and love into it and restore it to a bueatiful home. If anybody knows of a place like this, please contact me. My work # is 919-837-5354 ex237 8-5. ph# 919-777-7257 6/until. thanks
    Laney

  6. My wife and I are planning a move to Charleston this summer but we are going to have to rent for a year or two because we have two houses to sell where we are currently located. We have found it very hard to find a good rental website to go to. Any suggestions?

  7. hi
    9xoy4w8vv0bcjtr8
    good luck

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