Charleston real estate market report, sales and inventory, September 30, 2009
A little blip here in August as sales declined rather than increased from July so it appears that the two months did a flip flop from their traditional trend. So the really important thing is to look forward and see how sales fare in the next 3 months with the November 30th deadline rapidly approaching for the first time homebuyer $8k tax credit.
Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.
Sales
The last 4 months of 2008 were during the height of the financial meltdown and as you can see from the chart below, sales declined sharply last year from summer so I would expect that the combination of the homebuyer tax credit and favorable comparables to show year over year increases in the next few months. But, I was wrong when I predicted last month that August would be the best sales month in the Charleston real estate market so we'll have to watch and see how the year plays out.
Inventory
Almost more interesting than sales (how can that be?) is inventory which has been trending down slightly earlier than usual. And it's also important to note that due to Charleston MLS rules, properties that are under contract but contingent are still considered active for reporting purposes. The Charleston MLS has reported that pending sales are higher than at the same time last year. Of course, whether we should be counting short sales that may or may not close due to the sluggish nature of 3rd party lender approval is another story altogether.
But the most important thing to note is that inventory levels and the absorption rate are a tale of two markets, homes priced under $300k and higher priced homes. And I would also suggest that if I changed the price range to homes selling for less than $200k, it would be even more dramatic since so much market activity is in the entry level price range today.
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.
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.