home prices continue to drop? (Charleston, Mount Pleasant: for sale, real estate market, 2009)

[smithrep]

I wanted to get opinions on what the Charleston/Mt. Pleasant home market is going to do. We are moving down in the next few months and are trying to figure out if now is the time to buy or should we rent for a little while and see if the home prices continue to drop?

[USCJoe]

Having sold homes in the Charleston/Mt. Pleasant area for the past 14 years I feel that I should have a fairly good feel for the current real estate market and the outlook for the coming year. However, that being said, I find it difficult to speculate with a great deal of confidence what home prices will do in 2008. If I had to guess, I would say that in general, home prices will decrease some in the coming months and level off towards the second half of the year. I feel that there is a good bit of pent up demand for homes in the Charleston area, but the softness in other parts of the country affects the ability of buyers to purchase homes in this area. Interest rates on 30 year fixed mortgages are quite low and I would be surprised if they were to drop much more than 1/4% in the coming months. For this reason, if one has the financial resources or ability to qualify for a loan, it might make sense to purchase instead of renting rather than being tied into a years lease. If you are unsure as to where you would like to purchase or unable to find just the right home to suit your needs and one that is "priced right", you might want to see if you could find a 6 month rental and monitor interest rates and home prices. If you are planning on being in your home for the long haul, I would not necessarily try to time the bottom of the market.

[meks]

Originally Posted by smithrep

I wanted to get opinions on what the Charleston/Mt. Pleasant home market is going to do. We are moving down in the next few months and are trying to figure out if now is the time to buy or should we rent for a little while and see if the home prices continue to drop?

they'll drop, atleast until the end of this year and maybe farther

and if you do find something you like offer 30K less or so, empty houses/neighborhoods are sitting everywhere... I've even seen For Rent signs popping up next to For Sale signs because the builders are trying to recoup anything they can

from what I see around and read the bottom hasn't been reached yet, but that's JMHO of course

this isn't good for my equity but atleast I bought back before the prices went through the roof so I'm still way ahead of the game compared to most

[emilybh]

I've just moved here and I'm renting and waiting. They say the market will continue to drop for another year, through 2009, at least. My neighbor has had her condo on the market for 3 weeks and hasn't even had any showings which tells me that the market that I left in New England (which was terrible) maybe have finally reached Charleston, SC. If I was going to buy this year, I'd make only low ball offers of 20 to 30 percent below asking price. They say already, homes bought in the last year or two are worth are worth 10% less than what people paid for them.

What you do NOT want to do is buy a house and then have to sell it after the market has dropped so much that the property isn't worth what you paid for it. It took me 12 years to wait for the market to turn around after buying in the late 80's for my house to again be worth what I paid for it and then another 6 years before it finally had some decent appreciation. I was married to the place for the first 12 years and I never want to go through that again.

[GoBuckeyes]

We are in the same dilemma...do we rent or buy. With my husband's job, it is possible that we could re-locate again in 2 years or stay for awhile...who knows.
The other thing we have considered it buying a 3 bedroom condo or townhouse with the thought that at least we could sell that easier or rent it out if we had to leave in a year or two. Any thoughts?

[Jim3310]

Originally Posted by meks

...if you do find something you like offer K less or so, empty houses/neighborhoods are sitting everywhere... I've even seen For Rent signs popping up next to For Sale signs because the builders are trying to recoup anything they can.

That depends on the house. The builders are in their own tough spot and it has had an effect on re-sales that are in the same price range only.

Offering $120k on a $150k house will not get you the house.
Offering $720k on a $750k house will probably get you in.

Emily suggested offer 20-30% less;
In 2007 (which was the highest 4th year in sales in our history) the stats are:

Summerville - # sold were down 21% Price? up 4%
Mount Pleasant - # sold were down 24% Price? up 7%
West Ashley - # sold were down 12% Price? down 1%

It's a buyers market to be sure, but if the homes are priced correctly and the seller is not basing their listing price on 2 years ago, it will sell.

Buckeyes:
A condo/townhome has no better chance of selling as a single family home does. In fact, it could be tougher to sell, but it may have a slightly better chance of be rented out.
A six month rental may be a better option for you right now to feel out the area & your job.

In answer to the original post, where is this market going?

I think things will start to increase this Spring through early Summer & then flatten out. I say this based on the traffic we see from the North. Winter has killed that market, on top of everything else that drove it down. We are now getting a more realistic customer. They are willing to take the loss elsewhere & make it up on well priced homes here with a low mortgage rate.

If I was staying for at least four years, I would buy within the next few months with a close eye on the rates.
jim

[USCJoe]

I agree with Jim3310 that an offer 20%-30% less than asking price of a reasonably priced home will more often than not hurt your negotiating chances with the seller. A buyer needs to look at each home on it's own, taking many factors into consideration in making that first offer. I have seen time and time again when a buyer makes a "low ball" offer on a home saying "what have I got to loose" resulting in the seller not even counter-offering. If I were going to be in a home for less than two years, I would probably consider renting, but if longer, would monitor mortgage rates and try to narrow the list of homes I might consider buying if they are still on the market should I decide to purchase.

[emilybh]

Originally Posted by Jim3310

That depends on the house. The builders are in their own tough spot and it has had an effect on re-sales that are in the same price range only.

Offering $120k on a $150k house will not get you the house.
Offering $720k on a $750k house will probably get you in.

Emily suggested offer 20-30% less;
In 2007 (which was the highest 4th year in sales in our history) the stats are:

Summerville - # sold were down 21% Price? up 4%
Mount Pleasant - # sold were down 24% Price? up 7%
West Ashley - # sold were down 12% Price? down 1%

It's a buyers market to be sure, but if the homes are priced correctly and the seller is not basing their listing price on 2 years ago, it will sell.

Buckeyes:
A condo/townhome has no better chance of selling as a single family home does. In fact, it could be tougher to sell, but it may have a slightly better chance of be rented out.
A six month rental may be a better option for you right now to feel out the area & your job.

In answer to the original post, where is this market going?

I think things will start to increase this Spring through early Summer & then flatten out. I say this based on the traffic we see from the North. Winter has killed that market, on top of everything else that drove it down. We are now getting a more realistic customer. They are willing to take the loss elsewhere & make it up on well priced homes here with a low mortgage rate.

If I was staying for at least four years, I would buy within the next few months with a close eye on the rates.
jim

I beg to differ. If someone has had their house on the market for more than 6 months or more than a year and they need to sell; have had few showings and no offers, a low ball offer is better than no offer at all. Besides, if they've had the property for a while they don't NEED to get close to their asking price anyway. I think sellers are dreaming with some of the pie in the sky prices they have set for asking prices on some places I've seen. A few though, are in the unfortunate position of having bought just a few years ago and have to sell now. They are just trying to recoup what they paid ---which was an arm and a leg -- which is more than people are willing to pay now.

[justNancy]

Originally Posted by USCJoe

I agree with Jim3310 that an offer 20%-30% less than asking price of a reasonably priced home will more often than not hurt your negotiating chances with the seller. A buyer needs to look at each home on it's own, taking many factors into consideration in making that first offer. I have seen time and time again when a buyer makes a "low ball" offer on a home saying "what have I got to loose" resulting in the seller not even counter-offering. If I were going to be in a home for less than two years, I would probably consider renting, but if longer, would monitor mortgage rates and try to narrow the list of homes I might consider buying if they are still on the market should I decide to purchase.

I agree with this (I think!)

I'm not a real estate agent or even in the business, but I've been shopping for over a year. I'm currently renting, but I need to consider the cost of my rent vs putting that money toward a home in which I plan to live for several years (or forever!) The problem is we never know what will happen to us in the future, do we? Let's say I am spending around $10,000 a year on rent, which builds no equity whatsoever. If a $150,000 home drops 10% then I figure I'm ahead, but if it only drops a little, I probably should have purchased it sooner. So now that the prices have fallen quite a bit, I don't think buying a house would be such a bad decision. (except for the job market, of course)

Maybe my reasoning doesn't make sense, but that's how I am beginning to look at the situation. I'm also thinking about my personal lifestyle. I don't want to invest in nice furniture or window treatments and essentials like shower curtains, etc., for a short-term rental. (been there/done that) Anytime I move, the drapes never fit or are the wrong color. However, I suppose I could rent someplace that's already furnished.

[USCJoe]

Just Nancy,
You certainly make sense and that in my opinion is how those buyers "on the fence" should view the current real estate market. For someone considering buying for the short term, renting probably makes better sense. If they think they will be in a home for a number of years, I think that it makes sense to at least consider getting into or back into the market in the next 12 months unless we see home prices take a tumble. Historically, the real estate market is like the stock market, it has it's ups and downs and it is difficult to time the bottom of the market.