Sales slow in spring seasonThousands of homes waiting to be sold; market down By Katy Stech (Contact)
The Post and Courier
Tuesday, May 13, 2008
While hundreds of homes in the Charleston region found buyers last month, thousands more are on the market, awaiting buyers. A total of 700 area homes sold in April, a nearly 30 percent decline compared to the same month last year, according to data from the Charleston Trident Association of Realtors' Multiple Listing Service. 
Jim Parker So far this year, local home sales have been down at least 25 percent every month compared with 2007. So far this year, local home sales have been down at least 25 percent every month compared with 2007. The median price declined 1.7 percent in April to $205,000. The typically busy spring selling season hasn't brought with it the usual spike in sales. In fact, the number of homes sold last month fell below the number of deals that closed in March. Jim Grady, a Mount Pleasant real estate agent with Keller Williams Realty, said he has seen fewer people move to better locations or upgrade to nicer homes out of fear they won't be able to sell their current residence. "In the past, we would have seen people go ahead and move," he said. "In this situation, they have decided to forgo the move." Sellers who need to move are sprucing up their homes and listing them at reasonable prices, he added. Some have chosen to rent their properties. Unique properties, such as ones with water access or marsh views, are still selling, said Drake Herrin, an agent with Carolina One Real Estate who specializes in the West Ashley area. So are lower-priced homes. Slightly more than 60 percent of homes sold last month were priced below $249,999, according to association data. "People know that this market is not the same market we had in 2005 and 2006," Herrin said. "The sellers that don't know that are the ones whose houses are still on the market." He said a competitively priced home could generate several offers and a potentially higher sale price. At the same time, some buyers might not bother putting in an offer if a home is overpriced. Meanwhile, the inventory of for-sale properties has risen again to near-record levels, probably because spring is the industry's most active sales season. As of Monday, 10,941 homes were listed for sale. Grady of Keller Williams said, that gives buyers a lot of inventory to sift through. Buyers are poring over comparable sales in the neighborhood before signing a contract, he said. They are also looking at how many other homes are for sale, and the rate at which they are selling in the surrounding area. "Just because of the impression that prices have been inflated in the past boom, they are looking to make sure that the house they are buying is not going to see at least a long-term depreciation," Grady said. Short sales, which occur when the mortgage holder allows a property to be sold for less than the loan balance, are also growing in popularity. But not every seller can qualify for a short sale. Grady said he worked on a transaction recently with a couple who had taken out a home equity loan but was unable to get the sale price they needed to pay off the debt on their residence. They had to pay the $10,000 difference at the closing table. As for buyers, they now need a down payment and decent credit to get approved for a home loan. Also, appraisals have gotten more strict, he added. "It's more by the book than it used to be, and that's kind of the way it should be," Grady said.
Reach Katy Stech at 937-5549 or kstech@postandcourier.com. |
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Comments
This article has 16 comment(s)
Posted by willx45x on May 13, 2008 at 7:46 a.m. (Suggest removal)
So, the spring "buying season" that was supposed to reduce inventory levels and get the Charleston housing market back on track hasn't materialized like the Realtors said it would. Surprise, surprise. Housing in this area is still 30% over-valued across the board. If you are a buyer, do NOT buy now. Wait. Then wait some more. Most of the pain hasn't been felt yet. If these inventory levels persist (and they will), you're going to see massive depreciation over the next 18 months.
Posted by flinsc on May 13, 2008 at 8:30 a.m. (Suggest removal)
"But it is a great time to buy, interest rates are at historic lows, and inventory is high." I am sick of hearing these commercials on the radio, tv, and reading stories of people saying buy now. It was a great time to buy in 2006 because homes were increasing, and you better get in, that is what they said back then. The only people saying it is a great time are realtors (aka used car salesmen). They live off of commission. They will always say it is a great time. I agree willx45x, homes are still 30% over what that would be if you took 2002 prices and had a steady 5% increase a year.
Posted by nappyd on May 13, 2008 at 8:37 a.m. (Suggest removal)
Like I'd listen to anything a real estate agent has to say. Even adjusting for inflation, house prices increased 75% nationally over the last ten years. To say some stuff is overvalued is putting it nicely, and there's a long way to go before it hits bottom. Not to mention how people would react if a bad hurricane season came through.
Posted by dr_fed on May 13, 2008 at 9:03 a.m. (Suggest removal)
If you're looking to buy go out and put some ridiculously low bids on properties. If an offer comes through then lucky you and in the meantime you'll be doing your part to poke some holes in this over valued market.
Posted by TP on May 13, 2008 at 10:31 a.m. (Suggest removal)
We were in a position where we needed to sell our house, so we put in tons of effort to get it ready to show. Nothing major, just basic stuff to make the place more like a generic display home rather that 'our house'. We got an offer, and were realistic about the market and what our house was worth. We're closing the sale in a few weeks and making a nice profit after 4 years of ownership.
It amazes me that so many people are willing to put their houses on the market with little or no effort on the front-end to stage the places to sell. It's no wonder that some of these places have been sitting on the market for a year or more. Not only are they overpriced, but the sellers have put in very little effort to make their properties appealing to would-be buyers: clean, de-cluttered, and de-personalized.
These things won't guarantee a quick sale, but they certainly will increase your chances in this tight market.
Posted by SuzieQJones on May 13, 2008 at 2:47 p.m. (Suggest removal)
TP-I agree with you completely. I have seen pictures of for sale houses that had trash bags piled up in the kitchen! It is hard to comprehend what people are thinking, isn't it?
Posted by Landbuyer on May 13, 2008 at 3:12 p.m. (Suggest removal)
willx45x and flinsc, I have to assume that you are in fact experts and have been in the real estate business for a long, long time. You can't argue with numbers, they are off from HISTORIC highs. Highs that were way too high. Demand and the market set the prices There are deals out there though and not all of them are forclosures.
I can't blame people for trying to sell again right now. Spring and summer ARE the times to buy and sell. No doubt about it. There is truth, there are opinions and there are statistics, numbers don't lie.
Posted by Floger76 on May 13, 2008 at 3:50 p.m. (Suggest removal)
Landbuyer- I doubt that willx45x and flinsc are in the real estate business. I would agree that asking prices are too high on many homes (over 10,000 current listings) in the Charleston area. But 30%??? "homes are still 30% over what that would be if you took 2002 prices and had a steady 5% increase a year." Well, the average sales price in the entire Charleston area from 1/1/2002, to 12/31/2002 was $155,978. If you account for a 5% per year rate of inflation, then that home after 5 years would be worth $199,071. The average sales price YTD 2008 in the greater Charleston market is $200,000. So please, lets not over cook what is already a very tough real estate market. And no, I am not a REALTOR.
Posted by flinsc on May 13, 2008 at 4:20 p.m. (Suggest removal)
The average price in the Charleston area includes North Charleston and other areas. Those are the over priced homes. When you have old run down homes in North Charleston, Down Town (other side of the cross town), Summerville, Ladson that sell for under 150K that alters the average. Don't forget all the condo conversions that were mainly under 200K. So does the million dollar homes on the Battery alter the average. I was mainly pointing to Mt. Pleasant and James Island, and parts of West Ashley.
Posted by Floger76 on May 13, 2008 at 5:16 p.m. (Suggest removal)
flinsc - I understand. I haven't broken the entire area out by section yet. But I have done it w/James Island. Average sales price in 2002 on JI was $203,751. Adjusting for 5% per year for inflation, puts us at $260,043 at the end of 2007. The average sales price YTD on JI is $293,568. That is about a 12% difference. Again, I do believe that many homes are overpriced, and the only way to decrease the inventory is to lower prices, but it still is not near the 30% that many are claiming. We need cool heads to work our way through this.
Posted by Floger76 on May 13, 2008 at 5:26 p.m. (Suggest removal)
I just got done w/ West Ashley, and it also was at about 12% overpriced based on YTD sales over 2002 sales. And the average difference between sale price and list price is less than 4% (fairly consistant from year to year).
Posted by forget on May 13, 2008 at 5:37 p.m. (Suggest removal)
I just sold my house. It was on the market for 5 weeks. I had three different offers. One of the offers went away when the person couldn't get her financing together. I ended up getting $2000.00 more than my asking price because that person wanted it and knew someone else was writing up an offer. The houses in my immediate neighborhood have sold in less that 8 weeks with one of them in just 4 days. I really think most of the housing problems are the higher priced homes, and the people that were buying them with that creative financing.
Posted by archdude on May 13, 2008 at 6:17 p.m. (Suggest removal)
Flogler
You might want to try again using actual inflation numbers from year to year rather than the generic 5% since we all know what the inflation rate year to year was. Then, you can securely post your 12%, otherwise you have a fatal flaw to your logic.
Posted by Landbuyer on May 13, 2008 at 6:29 p.m. (Suggest removal)
Interesting. I have just finished Wescott in N. Chas. YTD there is a correction of approximately 10% from the total ave.sales price from 2007 which was $213K. The years back to 2004 were not seeing anything like the run up in Mt.P, JI, and WA. The old law of supply and demand was clearly at work. Lots of new homes up there kept the prices pretty much in check.
Posted by Floger76 on May 13, 2008 at 9 p.m. (Suggest removal)
archdude - I was not the one that suggested a 5% annual inflation rate. flinsc wanted to use that as a base inflation rate based on his first post. I think you should have read the post I was responding to.
Posted by Floger76 on May 13, 2008 at 9:09 p.m. (Suggest removal)
also, archdude, if the US gov't calculated CPI the way the did (more accurately) in 1980, our inflation rate would be over 11% today. Hows that for flawed logic.