Charleston real estate market report, March
March is the kickoff to the spring housing season and the results are not as encouraging as I might have liked to see or thought they'd be based on my personal activity during the month. We'll post the statistics first and comment on the housing market trends for Charleston real estate afterward.
Condos and Town Homes
Date Sales Cur Mo Inv Date Sales Cur Mo Inv Y/Y Sales Y/Y Inv
Inv Inv
01/06 331 1159 3.50 01/07 126 2170 17.22 -61.9% +87.2%
02/06 276 1628 5.90 02/07 133 2339 17.59 -51.8% +43.7%
03/06 374 1720 4.60 03/07 194 2519 12.98 -48.1% +46.5%
04/06 434 1685 3.88 04/07
05/06 405 1883 4.65 05/07
06/06 329 1989 6.05 06/07
07/06 343 2141 6.26 07/07
08/06 312 2160 6.92 08/07
09/06 282 2246 7.96 09/07
10/06 264 2407 9.12 10/07
11/06 206 2348 11.40 11/07
12/06 239 2202 9.21 12/07
Date Sales Avg List Avg Sale DOM Median %LP/SP
03/06 374 $253,789 $250,851 61 $204,613 98.84%
03/07 194 $279,670 $270,857 113 $170,950 96.85%
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Single Family
Date Sales Cur Mo Inv Date Sales Cur Mo Inv Y/Y Sales Y/Y Inv
Inv Inv
01/06 783 3697 4.72 01/07 565 5451 9.65 -27.8% +47.4%
02/06 855 4000 4.68 02/07 673 5666 8.42 -21.3% +41.6%
03/06 1170 4300 3.68 03/07 816 6021 7.38 -30.3% +40.0%
04/06 963 4654 4.83 04/07
05/06 1185 4845 4.09 05/07
06/06 1312 5156 3.93 06/07
07/06 1016 5486 5.40 07/07
08/06 1039 5691 5.48 08/07
09/06 1091 5758 5.28 09/07
10/06 833 5815 6.98 10/07
11/06 875 5658 6.47 11/07
12/06 837 5406 6.46 12/07
Date Sales Avg List Avg Sale DOM Median %LP/SP
03/06 1170 $328,338 $319,740 67 $210,000 97.38%
03/07 816 $324,463 $313,267 88 $218,160 96.55%
There isn't much sugarcoating the facts the statistics clearly show. Unit sales are off by 30% in single family homes and almost 50% in condos and townhomes. This reflects lessening demand in part brought on by tighter lending standards and buyers who might have qualified to purchase may no longer be able to obtain a loan. Additionally, the comparisons on a year over year basis still reflect some of the strongest housing sales in history. As the year unfolds and the 2006 sales started to weaken, the comparisons will get a bit easier and should not show such dramatic declines in unit sales. As to the tighter lending standards we are starting to see today, some of the sales in the previous strong housing years possibly should not have been made to either speculators or borrowers with poor credit and who, by putting their homes for sale on the market are likely responsible for a significant portion of the current inventory glut.
A look at prices on a year over year basis is quite interesting. In both single family houses as well as condos and townhomes, prices have held up rather well on an average basis but paint a much different picture on a median basis. Of course, I've talked a lot about how you can't buy a median house but that's another blog post. Here's what I find interesting. While condo and townhome unit sales are off by 48%, the average price paid increased by $20,000 but the median price declined by almost $25,000. The best explanation I can offer is that some very high end condos sold bringing the average sale up but the median of course is the price paid for the middle sale or in other words, condo number 97 of the 194 sales.
In single family pricing, while the average slipped from $319,588 to $313,267, that is a year over year decline of just 2% and while we never like to see price declines in housing, the good news for Charleston real estate is that is a much smaller decline than is being reported elsewhere in the country. As to median, (for what it's worth other than people like to know the number purely as a measure of affordability, it increased by $8,000 to $218,160 or a 3.8% increase). In both single family houses and condos and townhomes, the difference between list price and selling price is widening suggesting buyers are making lower offers than previously and reflects the buyers market we are in. Days on market has been increasing as well.
One of the most interesting concepts that I came across courtesy of Russell Shaw, a top producing real estate agent from Phoenix Arizona, is what inventory really means. The MLS defines inventory this way and it is commonly referred to as the absorption rate:
The "Current Inventory" column reflects the number of active listings on the market on the 16th day of each Month. The "Months of Inventory" 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.
To Russell Shaw, what a 7 or 13 month inventory of homes really means is that 1 out of 7 homes available for sale sold and 6 out of the 7 available homes did not sell. For condos and townhomes, that can be phrased even bleaker, 1 out of 13 did sell and 12 out of 13 did not. For sellers, it means that if you want to sell, you must price your house not only to the market but even a little better to stand out from all the competing properties. For buyers, it continues to be a very strong buyers market with a lot of homes to choose from and provides you the ability to offer even a little less than you might have thought. It continues to be interesting.