Charleston real estate market report, sales and inventory, May 1, 2009
Supply and demand
Supply is inventory and demand is sales and that is what is so fascinating about the absorption rate which tracks both data points. Sales declined somewhat a few years ago and then more sharply as the economy started to worsen in the past 6 months. While inventory has remained somewhat stable for the past couple of years (while at elevated levels), the decline in sales has caused the absorption rate to increase substantially.
Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.
Sales
Most likely due to seasonal factors but also due to interest from first time buyers and from both buyers and investors who are starting to see good value from foreclosures and homes offered by motivated sellers, sales have picked up from the lows of the last 3 months.
Also interesting to note is the trend toward more sales in the lower price range rather than in mid priced and higher priced properties. You can see that while sales have declined in all three classifications, the declines have been much sharper for homes between $300-$600k and luxury real estate selling for $600k and higher.
Inventory and Absorption rate
Although it appears that inventory is increasing, a look at the left axis shows that there has been very little change in units over the last year but the absorption rate remains significantly higher than last year.
Inventory is represented by the red line and corresponds to the left axis, the absorption rate is represented by the blue line and corresponds to the blue axis.
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. It can also be referred to as the absorption rate.