Charleston South Carolina real estate market report, September 07
The Charleston South Carolina real estate market statistics for September are very interesting. Quick highlights, unit sales down sharply, prices still stable, a high but stable level of inventory. Once again, we'll present the statistics first and comment after.
Unit Sales and Inventory
Single Family Homes
| Month | Sales 06 | Sales 07 | Change | Inv (mo) 06 | Inv (mo) 07 | Change |
| | | | | | | |
| Jan | 783 | 702 | -10.34% | 3719 (4.75) | 5719 (8.14) | 53.78% |
| Feb | 858 | 770 | -10.26% | 4023 (4.69) | 5861 (7.61) | 45.69% |
| Mar | 1177 | 994 | -15.55% | 4330 (3.68) | 6087 (6.12) | 40.58% |
| Apr | 964 | 771 | -20.02% | 4692 (4.87) | 6329 (8.21) | 34.89% |
| May | 1189 | 786 | -33.89% | 4900 (4.12) | 6711 (8.54) | 36.96% |
| June | 1322 | 879 | -33.51% | 5235 (3.96) | 6932 (7.89) | 32.42% |
| July | 1024 | 792 | -22.66% | 5618 (5.49) | 7022 (8.87) | 24.99% |
| Aug | 1041 | 811 | -22.09% | 5849 (5.62) | 7107 (8.76) | 21.51% |
| Sep | 1101 | 662 | -39.87% | 5963 (5.42) | 7159 (10.81) | 20.06% |
| Oct | 834 | | | 6075 (7.28) | | |
| Nov | 889 | | | 5999 (6.75) | | |
| Dec | 862 | | | 5755 (6.68) | | |
Condos and Townhomes
| Month | Sales 06 | Sales 07 | Change | Inv (mo) 06 | Inv (mo) 07 | Change |
| | | | | | | |
| Jan | 331 | 155 | -53.17% | 1189 (3.60) | 2403 (15.50) | 102.10% |
| Feb | 276 | 163 | -40.94% | 1665 (6.03) | 2521 (15.47) | 51.41% |
| Mar | 374 | 239 | -36.10% | 1763 (4.71) | 2618 (10.95) | 48.50% |
| Apr | 434 | 235 | -45.85% | 1730 (3.99) | 2740 (11.66) | 58.38% |
| May | 405 | 243 | -40.00% | 1971 (4.87) | 2805 (11.54) | 42.31% |
| June | 329 | 219 | -33.43% | 2096 (6.37) | 2793 (12.75) | 33.26% |
| July | 345 | 251 | -27.25% | 2289 (6.63) | 2811 (11.20) | 22.80% |
| Aug | 312 | 190 | -39.10% | 2318 (7.43) | 2873 (15.12) | 23.94% |
| Sep | 284 | 193 | -32.04% | 2419 (8.52) | 2941 (15.24) | 21.58% |
| Oct | 268 | | | 2624 (9.79) | | |
| Nov | 207 | | | 2579 (12.4) | | |
| Dec | 244 | | | 2467 (10.1) | | |
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.
Average and Median Prices
Single Family Homes
| Month | Average 06 | Average 07 | Change | Median 06 | Median 07 | Change |
| | | | | | | |
| Jan | $338,307 | $329,364 | -2.60% | $206,531 | $221,450 | 7.20% |
| Feb | $290,867 | $290,621 | unch | $208,965 | $218,269 | 4.50% |
| Mar | $319,579 | $310,000 | -3.00% | $210,551 | $219,916 | 4.40% |
| Apr | $319,989 | $324,465 | 1.40% | $215,000 | $229,000 | 6.50% |
| May | $343,653 | $350,283 | 1.90% | $216,728 | $229,250 | 5.70% |
| June | $306,038 | $357,550 | 16.83% | $213,116 | $225,000 | 5.58% |
| July | $325,242 | $328,594 | 0.10% | $226,580 | $222,261 | -1.91% |
| Aug | $319,838 | $349,536 | 9.29% | $221,937 | $221,295 | -0.29% |
| Sep | $286,945 | $289,441 | 0.86% | $200,935 | $198,186 | -1.37% |
| Oct | $332,620 | | | $215,000 | | |
| Nov | $301,428 | | | $216,900 | | |
| Dec | $291,799 | | | $210,000 | | |
Condos and Townhomes
| Month | Average 06 | Average 07 | Change | Median 06 | Median 07 | Change |
| | | | | | | |
| Jan | $253,632 | $224,970 | -11.30% | $173,000 | $178,000 | 2.90% |
| Feb | $246,102 | $224,281 | -8.90% | $167,275 | $156,900 | -6.20% |
| Mar | $250,851 | $253,029 | 0.90% | $204,613 | $169,900 | -17.00% |
| Apr | $239,540 | $222,034 | -7.30% | $193,093 | $175,000 | -9.40% |
| May | $243,927 | $226,365 | -7.20% | $192,600 | $169,750 | -11.90% |
| June | $238,437 | $281,486 | 18.05% | $181,900 | $211,840 | 16.46% |
| July | $216,871 | $258,615 | 19.25% | $183,310 | $188,750 | 2.97% |
| Aug | $228,221 | $233,410 | 2.27% | $181,100 | $181,774 | 0.37% |
| Sep | $238,503 | $354,789 | 48.76% | $190,488 | $219,000 | 14.97% |
| Oct | $237,610 | | | $183,171 | | |
| Nov | $208,051 | | | $165,000 | | |
| Dec | $230,212 | | | $152,500 | | |
12 Month Comparisons
| Single Family Homes | | | | |
| | | | |
| Date | Sales | Avg Sale | Median | DOM |
| | | | |
| 12 months 10/1/2005-9/30/2006 | 12,546 | $314,196 | $211,529 | 62 |
| 12 months 10/1/2006-9/30/2007 | 10,225 | $319,107 | $218,143 | 83 |
| Change | -18.50% | 1.56% | 3.13% | 33.87% |
| | | | |
| Condos and Townhomes | | | | |
| | | | |
| Date | Sales | Avg Sale | Median | DOM |
| | | | |
| 12 months 10/1/2005-9/30/2006 | 4,178 | $236,477 | $181,070 | 61 |
| 12 months 10/1/2006-9/30/2007 | 2,829 | $244,189 | $178,500 | 100 |
| Change | -32.29% | 3.26% | -1.42% | 63.93% |
September results were caused by the credit crunch and massive fear that pervaded the marketplace during July and August. Effectively, many people couldn't obtain loans despite the fact that most were well qualified. Jumbo (non conforming) loans over $417,000 were priced a full percentage point higher despite the low default rate typically associated with that borrower. The net result of the financial chaos was a severe slowdown in sales and I wasn't surprised in the least bit when I checked the statistics.
The good news is that much of that is behind us, mortgages quickly became obtainable once again (as long as you can actually qualify for a loan) and rates for jumbo loans have now reverted to prior levels. It would be helpful if the media actually reported some of this good news because many people still didn't hear the good news, only rembering the bad.
Prices. What can I say other than they are surprisingly stable. When I first glanced at the average single family price for September, I thought, wow, they are going to be way down but September seems to be a month when the average is low because the previous year was low as well. Perhaps it is because the back to school house buyer is buying during this time of year and the luxury buyer stays away from Charleston during the heat, humidity and rainy season we experience during August and September. Whatever the reason, prices for single family homes held steady but surprisingly, some very expensive condos must have sold because prices were up significantly in that classification.
After noticing that the 2nd set of charts with average and median price aren't as statistically important as the 12 month comparisons that I recently introduced, I've decided to continue with them through December but to stop including these charts in the monthly market report after the first of the year.
The 12 month comparisons are really interesting because they clearly show the trends over a longer period of time rather than just a month compared to another month. While single family unit sales have declined by almost 20% for the past 12 months, prices have actually edged up by a few percent. Condos and townhomes have had a steeper unit sales decline but prices have also edged up slightly on an average basis and are down insignificantly on a median basis. Days on the market reflecting competition with much higher inventory and with fewer and less urgent buyers is also up significantly.
I believe we can point to March 2006 as the peak of the market and I think that when we look back a year or two from now, we will be able to point to August and September 2007 as the bottom. You can see on the first set of charts that unit sales declined sharply in the last quarter of 2006 and inventory started to build. As we enter the last quarter of 2007, the unit sales decline percentages should ease as they will be compared to much lower sales in the previous year.
We should also remember that both unit sales and pricing soared during 2004 and 2005 and while unit sales declines of 20% or 30% seem frightening, the sum total of over 10,000 houses sold in the past 12 months would have been record setting in any year prior to 2004. The fact that prices have not shown any declines in the statistics is either an oddity or demonstrates the real strength of the Charleston South Carolina real estate market. Perhaps the reason price declines have not been evident in the statistics is that sellers put their homes on the market at too high a price and all of the price changes simply reduced the price to year ago levels rather than the double digit gains we were experiencing.
With the mortgage market stabilizing, inventory high yet stable, builders cutting back on new construction starts, the next 6 to 15 months should see improvement in the Charleston South Carolina real estate market. The most important thing is to get inventory levels down to more reasonable levels. I don't think there will be any exciting return to double digit price appreciation and we may in fact see a little price slippage in the next few months but once fear is removed from the marketplace and replaced with stability, consumer confidence in real estate in growth markets like Charleston will begin to improve noticeably.
Yesterday, in a post, I linked to an interesting article written by my friend, Geno Petro, a real estate agent from Chicago who wrote a wonderful post regarding fear. Click here to read, Fear, the 8th Deadly Sin.