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Charleston median home prices by neighborhood

The median price of homes that have sold in the Charleston area has shown a year over year decline for the past 6 months corresponding with the sharp decline in the stock market and fears of an economic meltdown.

Based on some of the media coverage on the state of the housing market, you might think that a chart of the median price might look something like this for the past 6 months:

Charleston real estate, median home prices 

The median price has long been regarded as the best measure of affordability but technically, you can't buy a home for the median price because every transaction will move the median up or down since it is the middle point of all home sales.

I've been saying for a while that the most home sales activity has been at the lower price points which has tended to exaggerate actual price declines. Calculated Risk  who was very early to notice the housing and lending bubble had this to say about the year over year declines in median prices:

"Once again, ignore the median price - it is distorted by the mix ... (and in California) sales activity is mostly in foreclosure ravaged areas and the high end areas are in 'hibernation' (emphasis added)".

While we have some foreclosures (and short sales) in the Charleston area, it is nothing like what has been and is currently happening in California, Florida, Phoenix and Las Vegas but nonetheless, it has impacted pricing. But there is no doubt that affordability has improved due to high inventory, motivated sellers and increased demand especially from 1st time homebuyers interested in taking advantage of the $8k tax credit.

But there is certainly still real value in looking at the median price especially to view current price trends.  

So how are prices in different Charleston neighborhoods been doing for the past 6 months. Some nice charts showing median price trends are below (please note that not all charts are to the same scale - price is indicated along the left axis and month to month movement might appear to be more dramatic from chart to chart).

Downtown Charleston

Daniel Island

Mount Pleasant 29464

Mount Pleasant 29466

Summerville 29483

Summerville 29485

Goose Creek

West Ashley

 

James Island

Published Friday, April 17, 2009 6:10 AM by Howard Arnoff

Comments

# re: Charleston median home prices by neighborhood

The breakdown by neighborhood also reduces the number of sales included to determine the median.  Thus, a small number of entry level home sales could greatly influence the median.  USA Today had an article on 4/09 that brokedown state by state a projection of "real estate recovery" by a University of Utah Prof. The SC recovery is projected for 2012.  If you are going to live in a home for more than 3 yrs., any additional fluctuations will be mute.  

Friday, April 17, 2009 8:38 AM by Charlie

# re: Charleston median home prices by neighborhood

You are exactly right Charlie and that's why the only way to value a home is by the price paid for recent comparable sales. Imagine if you tried to get the median price for a subdivision.

I thought it would be interesting to see how prices in different areas around Charleston were doing recently (and it was fun to create the charts).

As to the USA article and a recovery for SC in 2012, that would be the entire state and I would think that Charleston, Columbia and Greenville would see a recovery somewhat sooner.

Friday, April 17, 2009 9:12 AM by Howard Arnoff

# re: Charleston median home prices by neighborhood

Actually I THINK higher price areas will recover later.  Also, most states are behind California and Florida in price drops by about 6 months.  So I expect to see low in about 6 to 12 months.  I don't see many houses moving in downtown Charleston and Ions in MP that is in the high price range.  Just wait till the Alt-A default is on the market.  Also, 6 month trend is too short, you need at least 2 years.

P.S. I like your MLS map engine.  It's very nice.

Friday, April 17, 2009 2:30 PM by Arty

# re: Charleston median home prices by neighborhood

Arty, thanks for stopping by and welcome. If you haven't been here before, I've had several year price trends posted in the monthly market report, always right around the first of the month. Here I was trying to see what was happening in the six months since the financial crisis and economic meltdown peaked.

I agree with you that the higher priced areas will be slower to recover because the move up buyer has been frozen because they can't sell their current home and the action is at the lower end.

Lower rates for non conforming loans will help since many luxury buyers simply wouldn't borrow at previously quoted high rates. I just saw one lender's rate sheet today quoting a very reasonable 5.125 + 1 point, 5.375 no points for a 30 year fixed.

And good news for conforming loans, 4.375 with no points for a 30 year fixed.

Thanks for the compliment re the map search but unfortunately, you might have missed the post the other day regarding the many technical difficulties that firm has had and their horrendous customer service. Sadly for everyone who enjoys it, I won't be renewing my subscription because I need reliability more than bells and whistles.

Friday, April 17, 2009 2:47 PM by Howard Arnoff

# re: Charleston median home prices by neighborhood

Howard, some of your analysis is incorrect.  You should stick to selling homes.  Providing statistics for free on a blog site is not going to pay your bills.  

Are you selling any homes or just giving out free and often incorrect analysis?

Friday, April 17, 2009 3:58 PM by David

# re: Charleston median home prices by neighborhood

David, sigh, thanks so much for your comment. And your *corrected* analysis is missing.

Friday, April 17, 2009 4:16 PM by Howard Arnoff
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