There is a problem with “average” and “median” home sale prices in tracking home sale prices. What about the buyer that qualifies for $250,000. They see a few houses that meet their needs in the $230k range. They could get what they need for $230,000, even what they originally “wanted”. However, after a week of house hunting, they realize they can get more. Even in 2006, my experience as a buyers agent was that just about everyone, (myself included) would really love to have a home that is $20,000-$30,000 outside of their price range. Maybe it’s the bonus room. Or it could be the granite counter tops and wood floors. Perhaps it’s the larger lot with more privacey. Whatever the case, the bottom line is, “average” and “median” home prices are incomplete indicators of home price trends.
Which areas have been affected most? Recently, the Charleston MLS added a new indicator which is very helpful. I have compiled the changes since 2006 so you can see which areas have been affected most. As it turns out, beach communities have seen the most dramatic drops. Here is the grid so you can see for yourself.
|August 2009 to August 2006 Comparison|
|Charleston SC Real Estate Market – Average Price/Sqft.|
|Downtown Charleston||$ 376||$ 319||-15.2%|
|James Island||$ 171||$ 141||-17.5%|
|Daniel Island||$ 265||$ 235||-11.3%|
|Mt Pleasant S of 41||$ 199||$ 159||-20.1%|
|Mt Pleasant N of 41||$ 185||$ 140||-24.3%|
|“North Area”||$ 106||$ 90||-15.1%|
|Folly Beach||$ 515||$ 242||-53.0%|
|Isle of Palms||$ 688||$ 298||-56.7%|
|John’s Island||$ 157||$ 145||-7.6%|
Mt Pleasant was also affected much more on a percentage basis, while John’s Island experienced the least impact. Keep in mind that there are areas within areas. James Island and West Ashley have water front properties that you might expect have been hit hard, now that supply and demand are working against them. Demand is way off across the board, driving prices down.
The North Area is very important because this is the most affordable area in Charleston. It encompasses Summerville, Goose Creek, Hanahan, and North Charleston outside 526. Many families moving to the area, and first time home buyers choose the North Area because of square foot prices being around $100. Also, if you’re looking for more home for your money, you pay less for location and can get more house for the same investment.