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.