Charleston Real Estate Blog

10 must have features in today's new homes

I recently showed homes to a young couple who were first time home buyers. We started by looking at preowned homes and then we looked at newer homes and then new home construction and what was interesting was how they noticed how homes evolved from the 70's and 80's through the 90's to homes built in the 2000's to the new homes being built today.

Instead of lots of rooms, today's new homes are more oriented toward living spaces and are designed for how people live in their homes today. So today, it's much more about the kitchen and especially an open floor plan for entertaining with the kitchen as the center of the home.

And the master bedroom is now much more than just a place to sleep but combined with more spacious and luxurious master baths (and large closets), the master bedroom has become more of a retreat for today's homeowner. And flex space for either a home office or kids playroom seems to be at the top of the list of desirable features.

Steve Kerch at MarketWatch reports on the 10 must have features in today's new homes from the International Builders Show recently held in Las Vegas.

Topping the list, large kitchens with an island, energy efficient (and built green), a home office / study and a main floor master suite. Here are the the 10 must have features in today's new homes.

Snowmageddon and The Super Bowl

My nephew Evan lives in Maryland. Because there is the possibility of power outages due to Snowmageddon, he wanted to know if the Super Bowl would be cancelled if he couldn't watch the game.

Evan, if it snowed in Miami like it snowed in the Mid Atlantic, then yes, there would have been that possibility. So I hope that your power stays on and that you can enjoy the game (but only if you're cheering for the Saints).

And while this post has absolutely nothing to do with Charleston real estate, it will be sunny and highs in the 50's today in Charleston, probably warmer in Miami.

Southeastern Wildlife Exposition 2010

The Southeastern Wildlife Exposition, SEWE, the largest wildlife art and nature event in the nation once again will be held in Charleston over Valentine's Day weekend, February 12 - 14, 2010.

There are lots of great events including "Wild in the Kitchen" featuring a number of local Charleston chefs, the "Ducks Unlimited Oyster Roast" and "An Evening with Jack Hanna" at the South Carolina Aquarium.  

So if you want to start thinking spring, this annual event is the kickoff to the Charleston spring season and there is no more romantic a place to spend Valentine's Day in the country than Charleston.

Charleston mortgage report, February 5, 2010

Mortgage rates have once again have dropped under 5% for a 30 year fixed rate loan.

With the stock market down, the bond market up, mortgage rates once again are being offered at near historic lows.

If you are considering the purchase of a home for sale in Charleston, low mortgage rates improve your affordability. If you are "on the fence", all predictions point to higher mortgage rates later this year as the Fed is scheduled to end their purchase program of mortgage backed securities.

Wells Fargo is offering these great mortgage rates with a 30 day rate lock for home purchases.

4.750%     Conforming 30 year fixed

4.250%     Conforming 15 year fixed

4.875%     FHA / VA 30 year fixed

3.625%     5 / 1 ARM

5.625%     Jumbo 30 year fixed

Rates may vary depending on loan to value ratio and credit score. 1% Origination fee, no points.

Availability and responsiveness

... are two important qualities of a Charleston real estate professional (and for anyone providing quality customer service).

An employee of Boeing called me yesterday wanting to know where Boeing employees were moving to in the Charleston area. I told him that I had already helped one Boeing employee find a home in Mount Pleasant but there were many other nice areas to consider including Summerville, Daniel Island and West Ashley amongst others.

Since he was considering relocation to Charleston to work in the new Boeing facility, he wanted to get preapproved for a mortgage by talking with a mortgage lender and I told him that I would have one of my preferred lenders give him a call and that I looked forward to helping him find a home when he was ready to move to Charleston.

Anyway, I called a lender and got voice mail, I then emailed and also called again two hours later and got another voice mail so I thought I had better try someone else. I also got voice mail but this time, the lender called back within minutes so we talked briefly and she was going to contact him right away. In the meantime, after about 4 hours, the first lender finally returned my call. (Better late than never.) 

It's very understandable that there are times that you cannot respond quickly to all the phone calls and emails that you get in a day. Just last week, I was taking an all day course for certification by the National Association of Realtors (NAR) as a Short Sales and Foreclosure Resource (SFR) and all the Charleston real estate agents attending had to turn off their phones, blackberry's and other berry's they might have had so the ringing, buzzing and whatnot didn't disturb the class. And at the breaks of course, everyone rushed outside to check voice mails and emails.

I had told all my clients with active deals pending that I would be unavailable most of that day and did my best to catch up with everything at the end of the day. It's simply my approach to customer service which is to treat clients the same as I want to be treated. And that is to reply to all inquiries in as timely a manner as I possibly can whether I am busy showing homes to a client or busy doing anything else.

So how do you find a Charleston real estate agent who is both available and responsive.

The quick and (self - serving) answer would be that you just found him

... but here's an idea for you.

Contact a dozen different real estate agents and inquire about a very inexpensive property or about a rental. I would think that most agents wouldn't even bother to respond because they wouldn't make much money helping you in either situation. But the agents that did respond are agents that you can be sure will be both available and responsive to you if and when you become their client.

Choosing a Charleston neighborhood

Today, just about everyone is happy to recommend or not recommend just about everything. That's not a bad thing because everyone is looking for feedback, reviews, etc., when considering buying anything. And Charleston real estate is no different and in fact, because real estate is a popular subject, people are always happy to share their experiences.

Yesterday, I spent the day with an out of town client who is considering relocating to Charleston. They are visiting for the week combining a vacation, house hunt and job search. I met them at the health club that they worked out at before we began to look at homes and showed them homes that matched what they told me they were interested in.

During the course of the day, they asked me about various neighborhoods. When I asked where they heard about several neighborhoods, apparently some of the people that they met at the health club earlier in the day told them that they should look there because that's where they lived. Now I'm very familiar with the neighborhoods that were mentioned and the homes in those neighborhoods weren't even close to what my clients were looking for.

So it was kind of like, hey, we have something in common, we're both working out at the same club so we should probably live in the same neighborhood.

Finding a nice neighborhood to live in is very important. Finding a nice house that matches what you are looking for in a nice neighborhood is even better.

Charleston real estate market report, home prices, February 1, 2010

Let's face facts. Home prices have declined over the past year. And if you bought a home in the past few years, your home is not worth more than when you purchased it no matter how nice it is, how good a deal you got or any other justification you might come up with. Buyers know this, Charleston real estate agents know this and appraisers know this. And if those three won't value your home for more than you paid, there isn't much chance of you selling your home for more. That doesn't mean that Charleston home prices have crashed like other areas around the country because that simply hasn't happened but the reality is that prices have declined over the past year and a half.

Using the median sales price or the average sales price does not accurately measure home prices simply because the mix of homes sold has changed so dramatically over the past year. Increased activity in entry priced homes automatically drops the median and average price. So how can home prices be best analyzed. I would suggest that dollars per square foot would be the best way but the only problem is verifying the accuracy of the data and since the Charleston MLS is a user based data system, we are at the mercy of the information provided.

In looking at the price trend over the past two years, I'm comfortable with the dollars per square foot for all months except January and February of 2009 where despite a sharp drop in the number of homes sold, the price paid per square foot was sharply higher than the previous year.

So I'll post the median and average prices as always because this is the year end wrap up but beginning with the January 2010 Charleston market report, I'll emphasize dollars per square foot over median and average home prices. Additionally, I think that the 12 month comparison continues to offer you the best trend analysis by smoothing seasonal fluctuations and giving you a clear picture of what's happening in the Charleston real estate market.

And one little point, I cannot figure out how come prices are generally higher in December even though activity is generally slower due to the holiday season. Anyone have a guess?

Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.

Dollars per square foot

Median home prices

Prices are represented by the blue line for 2007, the red line for 2008 and the yellow line for 2009.

Average home prices

Prices are represented by the blue line for 2007, the red line for 2008 and the yellow line for 2009.

12 month comparison

Charleston real estate market report, sales and inventory, January 31, 2010

The end of the year Charleston real estate market report is always the best of the 12 monthly Charleston housing market analyses for several reasons.

First of all, I always go back and update all the late reporting from the past year to provide the most accurate statistics. And it is always amazing to find that there are always a dozen or so additional sales from the previous year as well so the numbers are always changing but they're good enough to get a sense of the trends.

Secondly, it gives me an opportunity to assess which statistics are most meaningful for you and gives me some ideas on how to present the statistics next year in an even better format for you (actually, the inventory charts have been improved). So look for a few changes next year and without any further ado, here is the year end sales and inventory report.

Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.

Sales

Monthly sales are represented by the blue line for 2007, the red line for 2008 and the yellow line for 2009.

There was a big improvement in sales during the last half of the year with the last 4 months higher on a year over year basis. Of course, some of the sales were due to the home buyer tax credit which was designed to stabilize the housing market and basically it did exactly that and homes under $300k did perform best.

Inventory

Inventory is represented by the red line and corresponds to the left axis, the absorption rate is represented by the blue line and corresponds to the right axis.

While the chart looks good, the actual numbers aren't quite as encouraging. There is still a ton of inventory available for sale with the difference from peak to trough of only 800 listings, practically negligible when there are over 10,000 homes for sale in the Charleston area. And while the absorption rate has certainly improved, most of the improvement once again came in the entry level price point of homes selling for less than $300k with a multi year supply of homes available at higher price points. Don't look for any price appreciation until the glut of excess inventory gets absorbed.

The current inventory (inv) column reflects the number of active listings on the market on the 16th day of each month. The months of inventory (mo) column is equal to the current inventory divided by the monthly sales. This reflects how many months it would take to sell out of inventory at the current month’s rate of sale. It can also be referred to as the absorption rate.

Charleston short sales [The Good, the Bad and the Ugly]

From the title of the famous Clint Eastwood "spaghetti western", a quick look at possible advantages and disadvantages of buying a short sale in today's and tomorrow's Charleston real estate market.

Possible advantages of buying a short sale might be that you might get a good deal, the seller will provide a seller disclosure, you can have the home inspected and you are negotiating with the seller.

Possible disadvantages of buying a short sale might be the long time frame to actually get final approval and close, the home will be sold "as-is", there are additional addendum and the bank may change their mind.

Let's repeat that last one, the bank may change their mind and that is exactly where buying a short sale might get ugly.

You see, all short sales are contingent upon 3rd party lender approval so even though the seller agrees to the terms of the contract, until the bank gives final approval, you don't have a ratified contract.

And generally, the seller will continue to review additional offers and present them to the bank and the bank will withhold final approval as they in effect look for a better offer to limit their loss. Should the bank approve a subsequent offer from another buyer, you, the original buyer will simply receive notice that your contract was not accepted by the bank as per the bank approval contingency in your contract.

Now for some good news, despite failures in most of the government's efforts to intervene in the housing mess, there actually is some good news on the horizon for short sales to become easier and quicker.

Real estate agent commissions and bonus

Everyone thinks real estate agents are overpaid. I think it goes back to the old days when real estate agents used to advertise that they were multi million dollar producers and then people would multiply by the "sacrosanct" 6 percent (made famous by Lesley Stahl on 60 Minutes) and determine that real estate agents made too much money.

So let's clear a couple of things up. 6 percent is not fixed in stone, it's just a popular rate. But more important, that commission is shared between the listing agent representing the seller and the selling agent representing the buyer. So just to make the example easier, let's use 6 percent and that means that each agent will only get 3 percent. But, the agent has to share some of that commission with the real estate brokerage that they work for and that split could be anywhere from 50 / 50 to 90 / 10 (and there are some 100 percent models but there are other costs to the agent with those commission plans).

Offers of compensation are made to Charleston real estate agents in the Charleston MLS. Most common are commissions of 2 1/2 and 3 percent but occasionally, you'll see a 2 percent on the low side and once in a while a 3 1/2 or even a 4 percent on the high side.

I'll show my buyers any property that they might like no matter what commission will be paid. I remember talking with one of my buyers years ago and he was asking about commissions and I mentioned that I showed him some homes at both 2 1/2 and 3 percent but one home was only paying 2 percent. He asked which home that was and I laughed and said, "John, thankfully one you didn't like."

Agent bonus is another story altogether. Sometimes, sellers believe that human nature being what it is, agents will try harder to sell a home if they can make more money. On occasion when I've been the listing agent, I've told my sellers exactly that and we offered an agent bonus. Now maybe it helped to sell the home and maybe it just cost the seller more to sell it because maybe it would have sold otherwise, it's hard to really know for sure.

My job as an ethical and professional Charleston real estate agent is to find the best home for my client at the lowest possible price, not to earn the most possible money.

And as an example, on several occasions recently I have applied the bonus that was offered to discount the sales price and make the home more affordable for my buyer. It's not that I don't like money, I do. But an agent bonus has to be disclosed anyway and I'd rather not surprise my buyer at the closing by accepting a really large check. So when a bonus of $2000 or $5000 or whatever is offered, it will go to you at the time of writing the contract, not me.

In my opinion, it's all about thinking long term and making sure that I have happy clients who would happily want to refer me to their friends, neighbors, relatives and co-workers instead of just making one large check.  

Living in a foreclosed home

... was a raccoon.

Imagine our surprise as my clients and I were walking through a foreclosed home for sale in Charleston and spotted a raccoon that apparently made itself at home and was comfortably sleeping in the window seat of a bedroom on the top floor. And he (or she) was also using the room as his (or her) toilet rather than going into the available jack and jill bath. I left a message for the listing agent so that the home can be secured.

It was a little startling but my clients did like the home and are considering it.

Photo courtesy of Flickr by Alan Vernon.

Who Dat [America's Team, The New Orleans Saints]

Who Dat! The New Orleans Saints are going to the Super Bowl.

The Saints are more than a football team to the residents of New Orleans and the Gulf Coast. They are the Soul of America's City according to Wright Thompson in an excellent article. It's a great read.

I have both family and friends who live in New Orleans and there's a spot in my heart for this beleaguered city. But it's coming back better than ever and my friend Kip just moved back to New Orleans from Charleston in time for this year's football excitement. He texted me a pic of the celebration on the field after last night's win so while millions will one day claim they were at the game, he was really there.

And in a perfect matchup, the Saints will go against New Orleans native Peyton Manning and the Indianapolis Colts in what I hope will be a classic Super Bowl.

GEAUX Saints! 

Searching for a home or neighborhood in Charleston

Many people who relocate to Charleston begin by searching for the perfect home on the Charleston MLS. Sometimes, you might think you have found the perfect home only to be eventually disappointed with the neighborhood the home is located in. So it's important to not forget the three most important words in real estate, location, location, location.

How do you size up a neighborhood that you might want to buy a home in.

I noticed a good article on the subject in Newsday yesterday when I was writing about the future of newspapers because Newsday (serving Long Island NY) was one of the newspapers mentioned that already charges for much of their online content. This particular article was free and had some good information so I thought I would share it with you. Learn more.

"When searching for a new home, the house is just one piece of the puzzle. Choosing the right neighborhood to suit your personal needs can be just as important as selecting the right house."

Factors to consider:

• Schools
• Commute to work
• Taxes
• Overall comfort level (including crime statistics)
• Environmental issues
• Shopping and entertainment
• Houses of worship
• Parks and recreation
• Medical facilities

The map search on my website can be very helpful in locating homes in a neighborhood you may like and there are many links in the area information page to help you find out more about neighborhoods in the Charleston area including school report cards.

But once you have found that perfect home, nothing is better than spending some time looking around the neighborhood in person before writing a contract.

The future of newspapers [print and online]

The NY Times will begin charging for content next year. Other newspapers may follow their lead but other than the Wall Street Journal which currently does charge for a portion of its content, it's doubtful any will succeed on a subscription basis.

Most of us have gotten very comfortable getting our news online. And truth be told, most of us like it for FREE. But the reality facing newspapers is that the advertising based model most have adopted hasn't brought in enough revenue to sustain the quality of the content being provided.

But the important words above are quality content. The NY Times offers a more liberal view, the Wall Street Journal offers a more conservative view and both are outstanding providers of news and information. For politics, I also like to read the Washington Post which has not announced any changes. Other than those three, who would you really pay to read.

It's not as if the plug is being pulled because you'll still be able to get lots of content online for free.

Here's more on the NY Times plan.

"Taking a step that has tempted and terrified much of the newspaper industry, The New York Times announced on Wednesday that it would charge some frequent readers for access to its Web site — news that drew ample reaction from media analysts and consumers, ranging from enthusiastic to withering.

.

All visitors to NYTimes.com will have full access to the home page. In addition, readers will be able to read individual articles through search sites like Google, Yahoo and Bing without charge. After that first article, though, clicking on subsequent ones will count toward the monthly limit. Among the nation’s largest newspapers, only The Wall Street Journal and Newsday charge for access to major portions of their Web sites. A few smaller ones also do, including The Financial Times, The Arkansas Democrat-Gazette and The Albuquerque Journal, and more are expected to join their ranks this year."

And speaking of advertising based models, it's worth mentioning that Google earned almost $2 Billion in the 4th quarter from those little ads that obviously somebody must click through. And don't we all enjoy everything that Google provides us with that is free.

Google revved up its Internet-advertising sales in the fourth quarter and approached $2 billion in quarterly profit for the first time.

Bear turns bull on Charleston housing outlook

I met Brad Rundbaken when we were both at Sandlapper Real Estate Group. He has a background in financial services, was a real estate appraiser and is currently a real estate consultant. Brad was way out front in calling the housing bubble (and credit bubble) and his indicators are based on trend analysis and the irrefutable law of supply and demand.

Katy Stech, real estate reporter at the Post and Courier reports that "even economic analyst Brad Rundbaken, the bluntest critic of the market while the local housing bubble was forming has turned optimistic. Rundbaken dedicated his November edition of the Charleston Market Report to how Boeing's announcement could chip away at the region's glut of residential inventory."

"I don't have a crystal ball, but based on what we're looking at right now and with what's coming, it's a game changer for that segment of the market."

More good news for the Charleston real estate market!