Charleston Real Estate Blog

Why are you searching for Charleston homes for sale

... if your credit is "so-so" and your credit score is not excellent, you aren't likely to be approved for a mortgage loan.

From the better things to do file, I wonder why some people aren't spending their time getting their credit repaired rather than searching Charleston homes for sale. 

If a potential buyer contacts me about seeing a home for sale, I generally inquire as to whether or not they have already been preapproved for a mortgage. You see, if you view a home for sale and like it and want to write an offer, almost every seller requires that you provide a preapproval letter. A home seller doesn't want to take their home off the market if there is not a pretty good chance that the buyer will qualify for a loan.

So just this weekend, several people contacted me who told me that they have some credit issues. My suggestion was to get their credit repaired (and to not pay for the service to the many scam organizations out there) but to use the widely available free services that actually can help you with the process.

It takes time to fix your credit problems but it can be done. And in 6 months or a year or whenever once they have fixed their credit situation, that would be a better time to start seriously looking for a home. Right now they would simply be spinning their wheels (and my time and gas - sorry about that - but that's why I ask).

Since Charleston buyers want more pictures of homes for sale

... wouldn't it be nice to at least have one picture.

It's really pretty obvious. Today's house hunter not only wants pictures and lots of pictures but video, virtual tours, floor plans and as much possible information available about Charleston homes for sale they might be looking at.

Now some might say that if you give a buyer too much information, they might not like the home and take it off their list. That it might be better if they actually viewed the home in person.

And that is correct ... except for one very important fact.

Without a picture, they aren't going to bother with the home.

Charleston real estate market report, sales, inventory and home prices, April 2012

It was once again another good month in the Charleston real estate market in April. Sales were higher in April 2012 than April of last year, inventory continues to remain at substantially lower levels and we're seeing prices edge up as a result of higher demand and lower supply.

Because South Carolina is a judicial foreclosure state, we are seeing more lender owned homes coming on the market every day but they don't seem to be pressuring prices the way they were in the past few years. And more lenders are approving more short sales (although they are still taking their sweet time) rather than letting them go to foreclosure.  

While the chart below shows only 833 sales for the month of April compared to 834 sales last year, a few late reported sales have now pushed April higher with 836 as of this morning and we'll probably hit somewhere in the 840's when all is said and done. But there's a lot of backlog out there due to close sometime soon though with over 2800 homes currently under contract, 2089 are contingent and 714 are pending as of this morning in the Charleston MLS.

And if you closely follow the market, you'll find that the best homes (price and condition) are going under contract very quickly and in some cases with multiple offers.

Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.

Year to Year Comparison and Home Prices

Home Sales

Inventory

Inventory and Absorption Rate

Inventory is represented by the blue line and corresponds to the left axis, the absorption rate is represented by the red line and corresponds to the right axis.

Sales, Inventory and Absorption Rate for all homes and by price range

The current inventory (inv) column reflects the number of active listings on the market (including homes that are under contract but contingent) 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.

Homeowners insurance for a vacant home

... is different than if you are living there. A number of Charleston homeowners are attempting to sell a home that they are not currently living in. They are most likely paying their homeowners insurance bill but may not have told their insurance agent that the house is vacant.

And that makes a difference to insurance companies when assessing risk and offering coverage.

So, if you are selling your home and it is vacant, make sure to tell your insurance company.

And if you happen to be currently renting your home, tell them about that too. It makes a difference.

The important thing is that you cover yourself in the event of a loss.

Full disclosure: I'm not an insurance agent (nor do I play one on TV or in the movies) and the advice offered here is general in nature. Consult with a trusted advisor for details specific to your personal situation.

Photo courtesy of Flickr Creative Commons by iowa_spirit_walker

Is getting a mortgage as painful as a visit to the dentist

Possibly. Actually, one of my clients who is a dentist said that going through the mortgage process was more painful than what her patients had to endure.

Amy Hoak at MarketWatch reports that mortgage borrowers face a litany of questions and should be prepared to provide reams of paperwork to get loan approval.

“A big reason lenders are being careful is that they fear they’ll have to buy back loans from Fannie Mae or Freddie Mac if proper underwriting standards aren't adhered to and the loans go bad after being securitized by one of the government-sponsored enterprises.”

And that really isn't so bad but the question is whether lenders are going too far and there are a number of examples of just that in her article.

Your best advice: get organized. Begin by working with an excellent lender who will prepare you for the process. Sure, some of what you'll need to provide might seem intrusive and sometimes you might have to provide the same documentation on several occasions. Be patient.

But isn't that really better than just making a loan if the borrower passed the mirror test by fogging a mirror. That didn't work out quite so well, did it.     

Photo courtesy of Flickr Creative Commons by Seth W 

Happy Mother's Day 2012

Forget the flowers this year and buy MOM a house.

You know that's what she really wants.

Happy Mother's Day!

[Lower inventory] The big story in Charleston real estate in 2012

There is probably no bigger story this year for the Charleston real estate market than the sharply lower inventory levels of homes available for sale.

There are a lot of reasons the Charleston real estate market has been very active this year. Record low interest rates along with lower home prices that help make home ownership more affordable, the reasonably good local Charleston economy with excellent job growth, improving consumer confidence, rising costs of rentals and both economists, analysts and pundits all calling a bottom for the real estate market are just a few of the factors.

And as a result, even though homes always come on the market during the spring selling season, inventory of homes for sale is at the lowest levels since the housing mess got started back in 2007.

The "sweet spot" of Charleston real estate are homes selling between $150,000 and $300,000. The charts above left and below reflect inventory levels for that price range over the past 28 months and as you can clearly see, inventory levels are low and that's good news not only for sellers but for the overall health of the market.

But buyers shouldn't be totally discouraged. It is still a buyers market but just not the crazy buyers market we saw a few years ago. There are still good deals, just not crazy deals. And in some cases, you might be disappointed to find out that there is a bidding war with multiple offers for the most attractive homes.   

Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.

Termites are not if but when

... and it only makes sense to protect your home.

One of my clients just called me because he saw termites and had let his termite bond lapse. Obviously, that isn't good and it will cost to repair the damage and get a new bond.

When you buy a home in Charleston, the seller does not have to provide you with a termite bond although it is a good thing to offer to potential buyers. The seller does however have to provide you with a clear CL-100 if you ask for that in the contract. A CL-100 is an inspection report for termite infestation and moisture damage.

When you buy a new home in Charleston, the property will be pretreated for termites and will generally come with a termite bond that is good for one year and it is renewable.

And likewise, if you buy a preowned home that comes with a transferable termite bond, you can renew it as well. If you buy a preowned home that does not come with a termite bond, you can have your home treated and get a bond from one of many companies that do that.

And since termites are not if but when here in the Charleston area, do yourself a favor and protect your home from damage. And don't let a current bond lapse, even if you don't have termites now, it might cost you more in the future.  

CoreLogic sees improving stabilization in home prices

CoreLogic reports that home prices are stabilizing and in some cases are starting to appreciate once again. Their report for March shows that while home prices including distressed sales declined on a year over year basis from March 2011 by 0.6 percent, prices increased by 0.6 percent from February 2012.

There was especially good news for South Carolina which was the third best state for appreciation at 4.7 percent excluding distressed sales.

"This spring the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in house prices," said Mark Fleming, chief economist for CoreLogic. "Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales."

"While housing prices remain flat nationally, in many markets tighter inventories are beginning to lift home prices," said Anand Nallathambi, president and chief executive officer of CoreLogic.

Does place trump property

Or in other words, what's more important to you, the neighborhood or the home.

For as long as people have owned real estate, the three most important words in real estate have been location, location, location.

So it might make sense that where you choose to live is more important than what you want to live in. After all, most of us have a budget and have to live and buy within our means.

That might sometimes mean that we can't have it all.

So I would suggest that if you have to compromise somewhat, you should buy a little less house in as good a location that you can find because you can always change and upgrade the home but there isn't much you can do about changing its location.

What do you say?

[Charleston mortgage report] Low rates keeps homebuyer affordability high

I've been pretty amazed at recent real estate closings at how low the monthly payments have been for my clients due to the crazy low mortgage rates these days. Buyers can either choose to buy more home for a smaller monthly payment or buy exactly what they had in mind and reduce their payment. That is basically the bottom line to high homebuyer affordability with these sub 4 percent rates for 30 year fixed rate mortgages.

“Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates finding new all-time record lows continuing to help keep homebuyer affordability high. The 30-year fixed averaged 3.84 percent, down from its previous all-time record low of 3.87 percent last registered on February 9, 2012. The 15-year fixed averaged 3.07 percent, also dropping below its previous all-time record low of 3.11 percent set April 12 of this year. The 1-year ARM also averaged a new all-time record low in the PMMS at 2.70 percent.” (emphasis added) 

With more and more economists and housing market analysts offering much more positive views on housing combined with record low rates and the relative strength of the local Charleston economy, it's no wonder the Charleston real estate market has been very busy this year.

Timing your move, easier said than done

In the best of all possible worlds, you could buy a home and move in exactly when you either sell your current home or your lease expires. Unfortunately, with delays in closing all too common these days, it isn't always possible to time your move simultaneously. Current homeowners today generally don't want to buy a home until they have sold their current home and not be responsible for two mortgages.

If you are selling your current home and the closing is delayed, you may not be able to close on your next home until your previous home is sold. Your lender might require that you sell your home as a condition for approving your mortgage on your next home. Or you might need the proceeds from the sale of your home in order to make your down payment.

You also might be selling your home and sell it too quickly to be able to move from your current home to your next home. Selling your home too quickly doesn't sound like that bad of a problem but it might require that you move your furniture into storage and rent short term and then have to move again when you finally buy your next home.  

Now, if you happen to currently be renting, the timing for your move might also not be as smooth as you might like. Let's say you give notice to your landlord and if your closing is delayed for whatever reason, it might not be possible to extend your stay in your current rental unit.

And closings are not just delayed due to tighter underwriting standards by lenders but also new construction that isn't always ready when it was originally scheduled to be. There are delays in construction that are outside the control of the builder including weather delays as well as other construction headaches including delays in the builder receiving cabinets, countertops, flooring, etc., from their suppliers.

Any of the above might happen to you and the best thing you can do is to relax and adjust to whatever situation you encounter. Getting stressed over circumstances that are out of your control isn't going to enable you to move in to your new home any quicker.   

Foreclosures down again but still a way to go

CoreLogic reports that foreclosures are down from last year and that shouldn't be much of a surprise to anyone. It's certainly part of the reason that inventory is down substantially right now in the Charleston real estate market.

“There were 69,000 completed foreclosures in March 2012 compared to 85,000 in March 2011 and 66,000* in February 2012. Through the first quarter of 2012, there were 198,000 completed foreclosures compared to 232,000 through the first quarter of 2011. Since the start of the financial crisis in September 2008, there have been approximately 3.5 million completed foreclosures.” 

One interesting point stands out from the above paragraph. It totally amazes me that there have been approximately 3.5 million foreclosures since the start of the financial crisis. That is a huge number of homeowners who have lost their home.

And unfortunately, it isn't over yet and there is still a way to go. The foreclosure map indicates the percentage of homeowners who are more than 90 days late on their mortgage payment. 

Don't forget that South Carolina is a judicial foreclosure state that takes longer to process a foreclosure than the non judicial states.The good news for South Carolina is that the percentage of delinquent borrowers is approximately 6.5 percent. 

What a difference a year makes [Charleston real estate today]

Last year at this time, I cringed as I noticed listings in my neighborhood being offered at what I considered to be below market pricing and watched my home decline in value as a result. Most were short sales offered by distressed homeowners trying to get out from being underwater.

But that was then and what a difference a year makes.

So far this year, every home that has been offered for sale in my neighborhood has been by a traditional seller. And not only are prices firming up but they have been trending up as well.

Sure there are still some short sales out there (and good news, lenders have been much more open to approving short sales now than in the past and are also responding much more quickly) and because South Carolina is a judicial foreclosure state, the previous delay in processing foreclosures will result in more lender owned homes coming on the market during the next year but the market has been absorbing inventory rather nicely and there is much less downward pressure on pricing than in the past.

We've reported good news in the Charleston real estate market pretty much all year. Here's just some of what we've been seeing.

Homes are going under contract quickly. Sure there are some homes that are languishing on the market unloved and unsold. But in many cases, not only are homes going under contract quickly but in some instances, several buyers are interested and that means multiple offers.

NOTE: MULTIPLE OFFERS RECEIVED - ALL HIGHEST & BEST OFFERS MUST BE RECEIVED BY MONDAY APRIL 30. 

All in all, there has been a lot of good news for the Charleston real estate market this year.  

Behind the red door

... is a nice story with a happy ending.

My friends and (now) former neighbors just moved into their custom built dream house this weekend. It took a while and there were highs and lows during the process of both selling their former home and buying and building their new home.

Nothing really worthwhile is always all that easy after all.

It took a while to sell their home last year and even though they sold for a little less than they might have hoped, they were also able to buy very advantageously.

And they got everything they wanted and more.

They saw a lot of homes and got lots of ideas and their home has a two story great room, chef's kitchen, sunroom, home office, luxurious master and probably the most functional laundry room you could ever imagine and on a spectacular lot in a wonderful neighborhood.

Dreams really do come true.