Charleston real estate market report, sales and inventory, August 25, 2009
There are some good numbers in this month's report. I have been suggesting that you watch inventory levels and they are improving, especially in homes selling for less than $300k.
And before I get started with the report, we may as well touch on the good news in the S&P Case - Shiller Index released this morning.
“For the second month in a row, we’re seeing some positive signs,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The U.S. National Composite rose in the 2nd quarter compared to the 1st quarter of 2009. This is the first time we have seen a positive quarter-over-quarter print in three years. Both the 10-City and 20-City Composites posted monthly increases, as did most of the cities. As seen in both seasonally adjusted and unadjusted data, as well as the charts, there are hints of an upward turn from a bottom. However, some of the hardest hit cities, especially in the Sun Belt, show continued weakness.”
OK, that's National and real estate is local. Here's what's happening in the Charleston real estate market. Today we'll focus on sales and inventory and talk about Charleston home prices tomorrow.
Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.
Sales
While monthly sales did not beat the previous year for all price classifications, you can see improvement since the lows of January and February. And some very good news, sales were actually higher year over year for homes selling for less than $300k.
Inventory
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 right axis.
Inventory levels are still high. There are a lot of homes for sale in the Charleston area. But the absorption rate has improved and inventory is being absorbed at a faster rate than the same month last year. By the way, an absorption rate of 6 months is considered a normal market so 13 months for all inventory and 9 months for homes under $300k is still advantageous to buyers. For homes over $300k, the inventory levels continue to be stratospheric.
What about the so called "shadow inventory".
The Charleston real estate market certainly has some foreclosures but not so many that banks are holding back inventory so as to not flood the market and cause any additional pricing pressure as has been rumored to be happening in California, Florida, Las Vegas and Phoenix. But I can tell you that some homeowners are holding off putting their homes on the market until they can get their price. Maybe they are involuntary landlords right now, maybe they are just living in their homes until the time is right to sell. But you can be sure that there is plenty of inventory sitting on the sidelines for any hint of improvement.
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.