Charleston real estate prices
What a difference a couple of years can make when analyzing Charleston real estate prices. I got a call from a client the other day inquiring about a home for sale in Mount Pleasant so I pulled it up on my computer as I was talking and immediately remembered showing the house a little over a year ago to another client. It was a very nice home in a golf course community in Mount Pleasant and seemed reasonably priced to both my client and myself at the time. It simply wasn't the right home for them for two reasons. First of all, they would have preferred a home with a golf course view rather than a view of the lake but more importantly, they really did not want a swimming pool in their own backyard.
At the time, the home was just listed for $825,000 and as I said before, all of us considered the price to be reasonable since it was beautifully appointed with luxury finishes, had a great floor plan and was on a good lot with a nice view. Now, a little over a year later, I get a call and to my surprise, the home remains unsold with a current list price of $650,000. To say the least, I was stunned by the price adjustment and the fact that it remained unsold.
Let's give you a little more history which is easily found in the Charleston MLS. Purchase price by the current owners was $550,000 in May 2005. Since the home was custom built, they likely began construction in the spring of 2004 and as was typical of the hot Mount Pleasant and Charleston real estate market at the time, the home probably appreciated by about $100,000 before they moved in. So for whatever reason, after living in the home for 1 1/2 years, they listed the house for sale at $825,000 anticipating a fairly tidy profit.
Well, unfortunately, that timing coincided with the slowing of the housing market. Many Mount Pleasant home buyers had traditionally been families from the Northeast who had been able to sell their homes for a lot of money and reinvest and relocate to the Charleston area. But now, they were starting to have trouble selling up North and demand declined and suddenly, there was lots of inventory on the market for buyers to choose from.
The house sat unsold and after 6 months on the market, the price was reduced fairly drastically to $699,000 reflecting the changing real estate market and after another couple of months, the sellers decided to "blame their agent" and hired a new real estate agent to sell their house and relisted at $689,000 with a further price adjustment to the current $650,000 a few months later.
Now I get a call from a client who might like the home and what am I thinking about the current price? I think we can offer $600,000 as a start to the negotiation and if my buyers want to play hardball (not lowball), we should be able to get it for no more than $620,000 and hopefully a little less. Not too bad for a home that originally came on the market at $825,000!
Now it really isn't declining real estate values that is going on as much as overly optimistic expectations by the seller caught in a slowing real estate market. They would still make money on the sale of the home, just not the "crazy" money that was being made at the height of the real estate boom. And before anyone thinks that tossing out a lowball offer of $400,000 or so is going to be a successful strategy to buy this home, as they might say in The Soprano's, fuhgedaboutit or this lovely but trite phrase, you have 2 chances, slim and none and slim left town. Just as sellers need to have realistic expectations about the value of their home, buyers need to be realistic as well about current Charleston real estate prices.
Just because the Charleston South Carolina real estate market is a buyers market does not mean you can steal a home but you can get a good price.