Charleston real estate market report, sales, inventory and home prices, May 1, 2010
March was another very good month for the Charleston real estate market with sales almost 16% higher than March 2009. Even more importantly, sales improved in all price categories showing that it isn't just first time home buyers claiming the tax credit but both the step up buyer of mid priced homes and the high end luxury home buyer have returned to the market strongly.
Sales on a year over year basis were up 35.2 and 60.0 percent respectively for March and 34.4 and 48.9 percent for the first quarter and are due to several factors, lower mortgage rates for non conforming JUMBO loans, a feeling that the market may have bottomed last year, a stronger local Charleston economy and improving consumer confidence.
Now about the tax credit, it expired yesterday and April 30th could become a new national holiday for procrastinators. I heard stories that buyers and their agents were running around like chickens with their heads cut off trying to get ratified (and binding) contract before the deadline. I worked with several buyers earlier in the month who were obviously a little better prepared for the deadline and I can only wonder how anyone could rush the purchase of a home just to get a tax credit.
A quick and early look at April indicates another strong month with 649 home sales already recorded compared to 580 last April and once again, because sales are usually entered later rather than earlier, should once again easily top 700 for the month. May and June should both still be excellent months but we will be starting to have more difficult year over year comparisons because the tax credit started last year around this time. The first real test of housing market stability should come in July.
Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.
Home prices
Comparing the last 12 months with the prior 12 month period, if you focus on the price paid per square foot, you can see the real decline in home prices from the highs in the market. Buyers are able to get a lot more house for their money and with mortgage interest rates still very low (a 30 year fixed rate conventional loan is currently at 5%), affordability is better than ever.
Sales and Inventory
Home sales - The blue line represents 2008, the red line represents 2009 and the yellow line represents 2010. The trend continues to be up.
Inventory and absorption rate - Inventory is represented by the red line and corresponds to the left axis and the absorption rate is represented by the blue line and corresponds to the right axis. You can continue to see the inventory build for the spring selling season but at a slightly lower level than last year.
Sales, inventory and absorption rate for all homes and by price point
Continued improvement in all price classifications and categories, sales are up, inventory and absorption rates are down.
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.