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Charleston absorption rate [so many sellers, so few buyers]

Charleston real estate absorption rateIt's amazing how so many sellers are chasing so few buyers in the Charleston real estate market today. Some sellers really want to sell while others apparently don't seem to care. As an example, I plan to show a client several homes for sale in my neighborhood and noticed several similar homes but one is priced $20,000 more than the other. It shouldn't take a rocket scientist to figure out that a similar home listed for $20,000 more not only won't get shown but it probably doesn't stand the proverbial snowball's chance in h*ll of selling.

Let's look at some numbers.

There are 10,644 active listings in the Charleston MLS. In the last 6 months, 4546 homes have sold which computes to an average of about 750 homes per month so when you divide 10,644 by 750, it would take a little over 14 months to absorb that inventory.

Except.

More homes will be put on the market today and tomorrow and next week and next month. So if you are thinking about selling your home, you're facing a lot of competition and therefore, the price has to be right and since buyers can be very selective in today's market, the condition matters more than ever.

That means that it really doesn't matter what you need to sell it for or what you paid for your home or what you think it might be worth or what your neighbor's home might have sold for. You want to price your home so that it will be the next home selected by the dwindling number of buyers who might be interested in homes in your neighborhood.

And for that dwindling pool of buyers who might be thinking about whether this is a good time to buy a home for sale in Charleston, with so many sellers and so few buyers, you are in a very advantageous position to negotiate a great price.

Photo courtesy of Flickr by edkohler.

Published Monday, November 17, 2008 8:14 AM by Howard Arnoff

Comments

# re: Charleston absorption rate [so many sellers, so few buyers]

Howard are the builders still adding to the inventory at a feverish pace. When I was down there in the summer of 07 I was amazed at all of the new construction on the market and still coming out of the dirt.

They should probably institute a moratorium for a while however unpopular that may sound.

Monday, November 17, 2008 8:52 PM by MikeG

# re: Charleston absorption rate [so many sellers, so few buyers]

Mike, actually, the builders have cut back on spec homes and it's funny, I was thinking about pointing out from the total available inventory of 10644, that 8194 homes were preowned and 2450 were new construction.

Now more interesting is that not all of the 2450 new homes are built, some are in the mls but clearly indicated as proposed construction. From what I can tell, there is still a little spec building going on but builders have tightened their belts.

And as to a moratorium, it did nothing for Mount Pleasant except increase their prices at too rapid a pace. So Summerville, noticing a plan that looks good but basically doesn't work, instituted a moratorium of their own and actually turned down a proposed subdivision.

The problem with Summerville's plan, the 10,000 homes already approved would not be affected. duh.

So much for controlling growth. It's more important to prepare for inevitable growth than try to control it. Anyway, market forces generally solve the problem and bottom line, many fewer new homes are currently under construction.  

Tuesday, November 18, 2008 7:05 AM by Howard Arnoff
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