Category Archives: Charleston Neighborhoods

Write ups and commments on communities in Charleston; pros and cons.

What’s Changing With Charleston Real Estate?

An article in Forbes Magazine, January 2009 listed Charelston as one of the top 25 strongest housing markets in the country.  One of the key indicators is when a particular market is projected to hit bottom.  The article says that Charleston will hit bottom in late 2009.  So what’s happening right now?  I can tell you.  Inventory is still increasing along with days on market while monthly sales are at an all time low, sub 500 per month.  Woh, that’s bad.  January was 415 and February – 388.  There may be a few unposted sales for February, but not many I don’t think. 

I’m very glad to see that someone thinks things are going to get better soon.  Charleston is a great place to live.  Prices have finally started to come down significantly, at least from an average and median price standpoint.  The average is down $42,000 and the median $20,000.  This could be that more expensive houses aren’t selling so you have to be careful what to conclude from these averages.  They don’t necessarily mean that you can expect to buy the same home for $20,000-$40,000 less. 

There are opportunities out there for those that are in a position to buy.  While there are many sellers that are still unrealistic about what they can expect a buyer to pay, there should be enough that are seeing the light that you should be able to get a deal.  I’ve been saying this  every since 2007 when things started going down hill.  If you work with a sharper harder working agent, you can definately find deals.  I’m not on the bandwagon with the “This is a great time to buy” crowd.  I know I certainly wouldn’t be happy if I purchased a home and watched it drop in value by $20,000.  We don’t know where the bottom is going to be, or how long it is going to take. 

If you can’t stomach an extra move, and you’re going to be in your house awhile, the interest rates are low, and we probably are close to reaching our bottom.  No one can tell you, however, what that bottom is going to look like.  Interest rates are a huge part of the equation over 10 years or more, so definately keep a close eye out if you’re in a position to buy.  Also, definately make sure you are working with a skilled and hardworking agent.  If you need  a referral, please get in touch with us.

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First Charleston Real Estate Market Update of 2008

It’s been a couple of months since I’ve written an update, but there really isn’t any new news.  You’ve heard the news about the “mortgage meltdown”.  Inventories in Charleston are high, and sales are flowing like mud.  Thick red clay mud that is.  Prudential is using their huge marketing budget to tell us that now is a good time to buy.  If you need to buy right now because you’re moving, fine.  Prices are not that likely to go down a great deal, and interest rates are very low right now.  Otherwise, if you’re on the fence…stay on the fence and keep coming back to check on the trend.  Look for when the inventory is turning around.  After that, prices should stabilize, and possibly start creeping back up again….we’ll see.  Not to be a gloomy gus, but I can’t in good concience tell buyers that this is a good time to buy.  Keep an eye on interest rates and do the math.  Interest rates don’t move that fast, so you’ll have time if they start creeping back up. 

 Talk to me out there people.  Tell me your thoughts, feelings, whatever. 

November Charleston Market Update: When will things turnaround?

All I can say is, stay tuned.  I think a better question is, “What’s the best strategy to plan a move?”  We have anywhere from two to three times normal inventory levels, depending on what part of town you’re considering, or what you define as normal.  2005 levels certainly weren’t “normal”.  It’s going to take some time for the smoke to clear.  It might be hard to imagine that there is some good news, but there really is.  Housing has really gotten too expensive.  Sure, it’s nice to be able to cash in on 10% appreciation if you happen to be fortunate enough to be on the right side of the equation.  But income simply isn’t keeping pace with home prices.  In a rising market, everyone was happy cashing in their equity, but what about the homes they were buying on the other end?  They were higher priced as well.  So, to keep the payment down, you take that equity and use it, or most of it as a down payment, right?  Yes, that equity is there, and belongs to you.  But how many people held onto it?  Hopefully, you are one of those people.  For the rest of you, there are always new opportunities if you willing to invest the time to learn. 

Sorry to those of you who bought recently and are going to have to sell in 2007 or 8.  Think of it this way.  What can you buy these days that holds it’s value?  Does that mean that if you want to upgrade that you can’t?  No it doesn’t.  Unless you refinanced and cashed in your equity.  Whatever your reasoning, if you want to move, then falling prices means you can get more for your money when you buy, right? 

One fact that is going to stay constant is that the supply of buyers is going to be much smaller for some time.  In the Charleston area , prices for a 3 bedroom 2 bath home start around $120,000 for a fixer upper.  A 10% down payment is $12,000.  With gas prices and prices on everything else going up, this is going to keep the supply of buyers low.  The same thing will be true at every other price level.  Stiffer lending practices will mean that families that might have upgraded to $600,000 home in Mt. Pleasant might have to stay put, or settle for a less expensive home.  Overall, the affect will be lower demand.  Supply continues to increase, so that means lower prices.  Duh. 

So, what’s the best strategy?  Why do you need to move?  Are you renting and want to start building equity?  Do you need more space?  First, talk to a local lender.  I can refer several.  Find out from them the downpayment requirements.  If you can meet them, then you have to decide if this is a good time to move, and if so, do you have a home to sell?  If so, then you need a complete plan. 

If you’re renting, I’d recommend to continue renting another six months to a year.  If you hate where you’re living, and you want to buy right now, there is some risk that the market will go down somewhat before it comes back up again.  But I don’t think it will be that much.  If you’re going to be there for awhile, say at least five years, buying now is relatively safe.  Any shorter than that, and it could be tight when you get ready to sell in terms of getting out even or avoiding a loss. 

If you have a home to sell, I suggest learning the buyer market for the home you want to buy.  Can you get a good enough deal on the buy side to make the transaction work is the question to ask?  Don’t make any emotional decisions.  Take your time and gather the facts.  Do your homework on selling your home.  What condition is your home in?  Are you prepared to invest the time and money to get it in top condition?  And are you prepared to provide the incentive necessary to attract an offer on your home, versus the 5-20 homes that are competing directly against it? Are you looking at the cold hard facts when it comes to your home?  Again, you have to take the emotion out of it.  You may have spent $10,000 on landscaping, but you can’t expect to get 100% of that back anymore than you would be willing to pay $10,000 more on a home with wonderful landscaping.   And you have to be very wary of the agent that is going to tell you what you want to hear to get the listing.  The best agents right now are only taking listings they think they can sell, because it costs too much money to market ones that won’t.  Weak agents will take anything, because it’s better than having nothing. 

The bottom line is, you can make a move work right now to your best advantage.  It’s just a lot harder to get all the pieces to line up than it was two years ago.  And it’s even more important that you have the right people advising you.  I hope this helps some of you.  Let me know. 

Worst Market for Sellers and Realtors since, well I’m not sure

Sales Units for October were at their lowest level since January 2004, but inventory levels are double at about 12 months, versus 6 months in January 2004.  I’m not going to go back and do the research to find the answer…it’s bad.  Less than 850 agents had a sale in October, (out of about 4500), and 300 of those more than one.  (its takes at least 2/mo to have a viable business)  My business is way down in spite of our web presence.  Many of you with whom I am in contact are having difficult selling your homes.  Therefore, you can’t come here and work with me to find your home here in Charleston. 

The saddest news is for homeowners that bought at the peak, which was June 2005.  Prices are finally dropping a bit, and sellers that need to sell becuase of a job change, divorce, etc. are feeling the pinch.  Real Estate companies are advertising that this is a great time to buy.  I guess if you represent a lot of sellers, you owe it to them to present things in the best light.  I happen to think the public is smart enough to see through the smoke and mirrors.  While I’m not happy about what it’s doing to  my income, I’d rather deal with that, than have my buyer clients come up short.  Consequently, I’ve taken on some management consulting work for some small businesses and am very pleased to have it. 

Sorry to be the bearer of bad news.  I simply refuse to spin it.  It’s going to get better; and I’m not one to speculate when.  Others are saying spring of 2009.  So, if you want to get in now knowing that it might get a little worse before it gets better, you’ll be taking a risk.  Wise investment has a lot to do with managing risk.  If my son was taking a job in Charleston right now, and he was going to be here for awhile, I’d say rent for six months and see if inventories are continuing to rise.  If you’d like to know precisely when the inventory and sales trend changes, stay tuned to www.allthingscharleston.com.   

Charleston SC Average Home Sale Prices Finally Drop in September

The conditions have been right for home sale prices to drop for some time with inventory levels continuing to increase. Yet, month after month, average home sales prices Charleston wide have continued to increase.  The average sale price finally dropped in September. (see below)  We saw a similar drop in July, and then back to an increase in August so we still don’t know for sure that we have a trend.  October is another month.  You can drill down into just about any part of town, even to the subdivision level, and prices have been increasing…in spite of increasing inventory levels. 

Charleston is a great place to live.  We have weather to die for with four seasons, lot’s of things to do for all ages, good schools.  Cara and I have lived and worked in this area for 15 years.  After living here for 10 years, we moved to Georgia in 2002-2004 and moved back.  If you aren’t already sold on Charleston, you simply haven’t spent enough time here.  If you’re already sold on Charleston, and are planning your move, the timing is right.  It could get better possibly.  Who can tell?  I definately don’t subscribe to using market timing for investing in real estate.  What you want to avoid is a “bubble” situation.  There simply isn’t any evidence that suggests that we have that sort of thing here in Charleston.  We don’t have any one industry like oil or technology that dominates our economy.  There are a lot of people that still want to move here, and if anything is slowing things down, it’s that they’re having difficult selling their homes where they are now. 

It’s certainly getting more difficult to buy a home now.  100% financing with moderate credit scores are going to go away.  That will definately affect the number of buyers out there. 

Sales and Inventory History

Monday, October 08, 2007
Category – Residential

Month Year Monthly Sales Avg ListPrice Avg Sale Price % Diff Sell/list Avg DOM Curr Inventory Months Inventory
January 2006 1180 $320,178 $312,341 97.55% 63.0 5403 4.58
February 2006 1180 $280,734 $274,314 97.71% 62.0 6182 5.24
March 2006 1627 $306,203 $298,971 97.64% 66.0 6581 4.04
April 2006 1441 $303,275 $296,733 97.84% 62.0 7042 4.89
May 2006 1660 $325,230 $316,575 97.34% 60.0 7461 4.49
June 2006 1773 $289,490 $281,986 97.41% 65.0 7934 4.47
July 2006 1466 $299,368 $291,011 97.21% 63.0 8541 5.83
August 2006 1435 $298,007 $289,876 97.27% 68.0 8832 6.15
September 2006 1464 $279,815 $271,870 97.16% 71.0 9059 6.19
October 2006 1184 $310,670 $299,181 96.30% 76.0 9476 8.00
November 2006 1166 $286,093 $277,676 97.06% 79.0 9456 8.11
December 2006 1176 $282,242 $271,683 96.26% 88.0 9150 7.78
 
Total 2006 16752 $298,442 $290,185 97.23% 68.6 7,926 5.83
  
January 2007 893 $316,597 $304,946 96.32% 97.0 9157 10.25
February 2007 977 $284,609 $274,896 96.59% 99.0 9524 9.75
March 2007 1296 $303,094 $293,067 96.69% 94.0 9998 7.71
April 2007 1086 $303,123 $294,057 97.01% 91.0 10412 9.59
May 2007 1329 $315,476 $304,580 96.55% 92.0 10705 8.05
June 2007 1360 $336,438 $324,334 96.40% 89.0 10724 7.89
July 2007 1160 $310,905 $298,938 96.15% 91.0 10685 9.21
August 2007 1133 $332,407 $319,387 96.08% 94.0 10649 9.40
September 2007 878 $306,711 $296,856 96.79% 95.0 10705 12.19
 
Total 2007 10112 $312,151 $301,229 96.50% 93.6 10,284 9.33
  
Total 2006-2007 26864 $305,297 $295,707 96.86% 81.5 9,105 7.50

Let us know your thoughts.  It will be very interesting to see what happens to the supply of buyers out there. 

Mt. Pleasant Market?? Is this a good time to buy?

 The answer is as usual, it depends??  If you’re a first time home buyer looking to buy in Mt. Pleasant, and you have control over your timing, you might benefit by waiting.  Prices are more likely to drop than they are to go up in my opinion.  But we’ll definately know more in six months.  And you have little to lose by waiting. 

If you’re moving to the area, or for some reason, don’t have this kind of control, I think the timing is good for you.  You should be able to get a better deal than two years ago when multiple contracts were very frequent occurences.  Prices might go a little lower by the end of the year, but so far, they’re holding fairly strong.  The reason why I’m saying to first time home buyers that they might be better off waiting, is more because we’ll know more in six months than we do know…not that prices are definately going down.  So, if you are buying right now, feel good about your situation.  Charleston is still a hot destination.  Every year can’t be as hot as 2005, and 2006 was an excellent year as well.  So still, things are more returing to normal in Charleston.  Make sure you have a good agent representing you, and you should be able to BOTH find the best choices and get a good deal.  It’s possible prices will drop slightly before going back up.  In 2005, if your home in Mt. Pleasant was in a so-so location, or didn’t have great curb appeal, you could still get close to asking price, because buyers didn’t have very much from which to choose. 

Almost everyone makes some sort of trade-offs when buying a home.  If you’re buying now, you have great selection and you have a much better chance of getting all or most of your “nice-to-haves” satisfied versus 2005, when buyers may have been compromising “must haves” both because of the scant selection, and because they had to act so fast to avoid having to compete with another buyer. 

Judge for yourself. 

Sales and Inventory History

Monday, June 25, 2007
Category – Residential / Area: 41, 42

Month Year Monthly Sales Avg ListPrice Avg Sale Price % Diff Sell/list Avg DOM Curr Inventory Months Inventory
January 2004 123 $278,622 $272,218 97.70% 83.0 637 5.18
February 2004 134 $269,017 $265,136 98.56% 73.0 605 4.51
March 2004 202 $306,984 $301,695 98.28% 91.0 567 2.81
April 2004 174 $295,221 $289,983 98.23% 61.0 581 3.34
May 2004 201 $302,589 $299,346 98.93% 53.0 534 2.66
June 2004 246 $314,971 $312,444 99.20% 73.0 508 2.07
July 2004 236 $333,449 $328,154 98.41% 57.0 497 2.11
August 2004 187 $317,158 $314,685 99.22% 47.0 485 2.59
September 2004 157 $321,021 $315,561 98.30% 56.0 437 2.78
October 2004 156 $308,291 $305,020 98.94% 41.0 431 2.76
November 2004 158 $333,331 $326,958 98.09% 40.0 392 2.48
December 2004 194 $316,726 $312,637 98.71% 69.0 376 1.94
  
January 2005 169 $346,989 $338,094 97.44% 60.0 390 2.31
February 2005 187 $296,755 $293,329 98.85% 46.0 403 2.16
March 2005 214 $338,474 $333,567 98.55% 47.0 409 1.91
April 2005 240 $324,477 $320,567 98.79% 43.0 475 1.98
May 2005 241 $339,802 $335,452 98.72% 40.0 481 2.00
June 2005 324 $375,971 $371,017 98.68% 35.0 509 1.57
July 2005 257 $401,070 $395,249 98.55% 40.0 686 2.67
August 2005 279 $384,712 $378,539 98.40% 35.0 723 2.59
September 2005 228 $394,044 $386,245 98.02% 44.0 713 3.13
October 2005 220 $385,501 $379,188 98.36% 40.0 749 3.40
November 2005 247 $312,639 $308,014 98.52% 42.0 794 3.21
December 2005 322 $289,432 $284,302 98.23% 49.0 837 2.60
  
January 2006 198 $381,799 $371,678 97.35% 57.0 910 4.60
February 2006 146 $390,724 $385,140 98.57% 63.0 1172 8.03
March 2006 191 $434,460 $425,638 97.97% 67.0 1316 6.89
April 2006 170 $416,010 $406,886 97.81% 61.0 1382 8.13
May 2006 230 $412,126 $403,485 97.90% 58.0 1509 6.56
June 2006 193 $419,513 $409,645 97.65% 61.0 1557 8.07
July 2006 244 $416,162 $406,240 97.62% 68.0 1666 6.83
August 2006 204 $421,141 $410,018 97.36% 76.0 1666 8.17
September 2006 212 $411,933 $400,191 97.15% 77.0 1704 8.04
October 2006 172 $454,935 $433,791 95.35% 91.0 1756 10.21
November 2006 136 $415,439 $397,467 95.67% 93.0 1720 12.65
December 2006 157 $374,422 $357,116 95.38% 112.0 1588 10.11
  
January 2007 127 $438,884 $422,646 96.30% 98.0 1538 12.11
February 2007 119 $461,424 $442,102 95.81% 130.0 1572 13.21
March 2007 165 $496,216 $480,843 96.90% 126.0 1656 10.04
April 2007 155 $447,657 $431,443 96.38% 104.0 1716 11.07
May 2007 169 $394,783 $380,454 96.37% 96.0 1829 10.82

“They Don’t Build Them Like They Used To” Oh Really?

Does anyone remember Hurricane Andrew?  http://en.wikipedia.org/wiki/Hurricane_Andrew Provides a concise summary.  In 1992, I was a territory manager for Senco Products, a major manufacturer of automatic nailing and stapling products.  The reason I bring up Hurrican Andrew, is that prior to this hurricane, the building codes for nail specifications, and other fasteners to address wind uplift forces went largely ignored. 

 This past week, I attended a pre-drywall inspection, and a final inspection for two different brand new homes built by Centex.  For the record, there are two reasons why you see so many positive reports on my blog about Centex.  One, the inspections I’ve intended, of both brand new, and used homes; and positive reports from my clients.  And two, their superior JD Power ratings.  I could actually make a lot more money selling other brands who offer huge selling bonuses.  D. R. Horton for one offers DOUBLE commissions of 6% for selling their homes.  Kind of makes you wonder about a few things, but that’s not the subject of this article.  Beazer has a volume plan where you can work your way up to 4 1/2%.  Centex offers 3% and no extra bonuses no matter how many you sell…for the record. 

 Anyway, since Andrew, inspectors pay much more attention to the types of nails, nailing patterns, and the connectors used to fasten the home down to the foundation.  After Andrew, a lot of people caught hell, and building inspectors topped the list.  Even though the newer codes were virtually indiscernable by anyone but an engineer, especially with regard to “hurricane ties”  If you look at a new home built today, you’ll see that from the roof trusses, all the down to the sill plates, are fastened together by some type of metal strap.  Short of  tornado, or a direct hit by a cat 5 hurricane, they aren’t going anywhere.  

 That doesn’t mean that new home builders are perfect.  The people that oversee the construction have too many homes to supervise, typically around 20, assigned to them.  So you need to hire your own inspector, and negotiate with the builder so that things get completed in a reasonable time frame.  I am biased of course, but I highly recommend having a real estate agent on your side of the table to help out as well.  Consider it free insurance.  Just make sure your agent is actually your agent, and not a salesperson pretending to be an agent. 

On the finished home, most of the drywall work was great.  Two joints in the living room needed to be re-floated, and two other joints needed to be cut out and reworked.  Must have been a bad day or the end of the day for the dry waller, because the rest of the house looked great. 

On the pre-drywall inspection, the walk-out door was on the wrong side of the garage…whoops.  That will be fixed.  And there was about a four inch piece of OSB near the top of the roof line with a couple of pieces busted out.  Apparently, the code doesn’t specify the width of the last piece near the end of the roof sheating.  I’m not a code expert…so I can’t really evaluate that from an expert standpoint.  Seemed pretty hokey to me.  But those were the only things we could find.  Myself, a certified inspector and the buyer. 

I learned this week that the site supervisors are incented based on thier J. D. Power Survey results.  If they don’t average a 9.3 or better, they miss out on a significant bonus.  Sounds like a good plan.  They stay in touch with the customers and do everything they can to make them happy.  

I’ve heard people say that because of the way they grow trees now, that older lumber is more structurally sound and that is probably true.  It remains to be seen how well the vinyl siding will hold up after 30 years in our sun and rain.  They were using Cedar in the 80’s, and without flawless maintenance, they need to be resided because it rots in the humidity.  Brick is an extra $20,000, a great investment.  And cement plank siding is great, my favorite actually.  It’s not inexpensive, almost as much as brick, but it looks great, and is proven to last.  It does require caulking to prevent leaking. 

In Charleston, I feel great about recommending Centex, Brentwood, Harbor, and Weiland built homes.  If you need help comparing builders and communities, please feel free to contact me.  843-991-5184.