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Old 12-28-2008, 08:58 AM
 
Location: Charleston, SC
159 posts, read 192,130 times
Reputation: 66
Default Charleston Real Estate Statistics

What I want to try and do here is paint a macro picture of an important trend in the Tri-County area. These stats are meant to just give you an idea of what is going on in the upper end of the housing market.

Active Tri County SFR Listing Stats (As of Nov 08)
$0-199k-- 34.1% of the market
$200-499--35.7% of the market
$500 and UP--30.2% of the market
**The $1 mil and over segment of the market is 12.3% of the market.

As I have stated on other posts on this forum and my website the upper end of the market in Charleston is the area I am most concerned. Why? You are dealing with Jumbo Loans (typically) that incur higher interest rates and have more stringent underwriting guidelines. These homes are often overpriced and place more stress on a financially strapped seller due to high mortgage payents.

The following stats are from the $500k and Up SFR (Single Family Resident) part of the market for the Tri County Region.

Months Inventory
November 07--37.19
November 08--80.53

YTD Avg- Months Inventory
Dec 06 -Nov 07--20.71
Dec 07 -Nov 08--37.25

Total Sales
Dec 06 -Nov 07--1154
Dec 07 -Nov 08--728

Current Inventory
Dec 06 -Nov 07--1989
Dec 07 -Nov 08--2236

Avg Med $ Sold Price
Dec 06 -Nov 07--$729,000
Dec 07 -Nov 08--$740,000

Avg Sale $
Dec 06 -Nov 07--$992,646
Dec 07 -Nov 08--$970,686

So you can see this macro data can be a bit confusing. Current Inventory has not changed much, Median $ has gone up and Avg Sale $ has gone down. So what gives?

Sales are down 37% which forces months inventory to increase. So current inventory (SUPPLY) only increases 11% from 07 to 08 BUT DEMAND has crashed by 37% (In sales volume) so competition has increased in this segment of the market because there are less buyers and more inventory. There are less buyers due to fear and credit contraction.

The sellers of these homes include builders, investors, real estate agents, etc. It really does not matter who they are because most have one thing in common: A BIG FAT MORTGAGE. This is why you will see the prices in this segment of the market come down more in the next year as some of these sellers try to "cut bait."

Unless Obama can create a miracle in the economy the supply and demand of this part of the market will worsen which equates to lower prices. Once this segment of the market worsens in price it will also have an impact on the overall Avg Sales Price stats for the Tri County region. At the end of the day the only stats that matter are your personal financial stats and the stats for the particular area you are interested in buying a home.

Now if you are a qualified buyer and you know how to properly value these homes I believe you can potentially get an excellent buying opportunity if you play your cards right. Why? Low rates, low cost to build and cheaper land prices.

The million dollar question is what do you pay? This is where skill, knowledge and analysis come into play. Do it yourself or hire a unskilled Realtor and it could cost you big time! If you are not comfortable buying then rent since there are plenty of rentals here in Chas.

IMO, rates will eventually go up (Since they can not go much lower) and the costs of building material (Commodities) will increase once again in the future making the financing side of the equation more expensive.

Whatever you decide to do be VERY VERY careful in your decision making process.

This is my 2 cents for the day.

Happy New Year Everyone!! Let's all pray 2009 turns out to be better than 2008!
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Old 12-28-2008, 10:01 AM
 
Location: Mount Pleasant South Carolina
1,125 posts, read 2,395,943 times
Reputation: 228
I and I am sure others certainly appreciate the statistics that you have analyzed and evaluated as a basis for your observations and comments. I would be useful if others would do the same. If sales/demand has declined by 37% but inventory has only increased by 11%, to what do you attribute this disparity ? A slow down in the number of homes coming on the market or sellers taking their homes off the market, possibly to wait for the market to rebound ? I do agree with you that there will be a larger percentage decline in home prices in the upper price ranges, but I am much less comfortable in speculating in the percentage decline in 2009 and possibly later should the economy not improve. I also feel there is a greater likelihood that interest rates and building material costs will increase rather than decline in the next year or two. If you are a qualified buyer there are some excellent buys currently on the market either near the homes list price if it is aggressively priced, or through successful negotiation with a motivated seller.I am sure that there will be some who will differ with me, but I feel that the current housing market and buying opportunities are similar to those found in the stock market. Many blue chip stocks are selling at some historic low price earning ratios. Could the prices and p/e ratios fall further, certainly. Could many offer investors a great buying opportunity at current prices? I think yes. However, most financial "experts" will agree that it is difficult if not impossible to predict the bottom of the stock market and by the time such a bottom becomes evident, it may be too late to benefit from the initial turnaround/appreciation. I think the same might be said about the current real estate market.
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Old 12-28-2008, 10:40 AM
 
Location: Lowcountry
764 posts, read 971,945 times
Reputation: 410
Quote:
Originally Posted by USCJoe View Post
......but I feel that the current housing market and buying opportunities are similar to those found in the stock market. Many blue chip stocks are selling at some historic low price earning ratios. Could the prices and p/e ratios fall further, certainly. Could many offer investors a great buying opportunity at current prices? I think yes. However, most financial "experts" will agree that it is difficult if not impossible to predict the bottom of the stock market and by the time such a bottom becomes evident, it may be too late to benefit from the initial turnaround/appreciation. I think the same might be said about the current real estate market.
Nice try but you just don't get it USCJoe. You'd be much better off NOT posting your opinion because you are quickly losing credibility.

Interest rates will begin to climb, and rapidly, within the next 6 months. It's a given if we want the dollar to be worth anything.

You fail to realize that the stock market has adjusted downward almost 50% over the last year. This RE market has not and has a long way to go.

You continue to spout that this RE market has already adjusted itself downward and discounted the artificial price appreciation generated by the bubble. This is so far from the truth.

Could many offer investors a great buying opportunity at current prices? I think yes.

The operative word in your quote is "current" prices. It's not even close.

Do you actually believe what you say or are you just pulling our legs? I sure hope it's the latter.....
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Old 12-28-2008, 11:23 AM
 
Location: Charleston, SC
159 posts, read 192,130 times
Reputation: 66
Quote:
Originally Posted by USCJoe View Post
I and I am sure others certainly appreciate the statistics that you have analyzed and evaluated as a basis for your observations and comments. I would be useful if others would do the same. If sales/demand has declined by 37% but inventory has only increased by 11%, to what do you attribute this disparity ? A slow down in the number of homes coming on the market or sellers taking their homes off the market, possibly to wait for the market to rebound ? I do agree with you that there will be a larger percentage decline in home prices in the upper price ranges, but I am much less comfortable in speculating in the percentage decline in 2009 and possibly later should the economy not improve. I also feel there is a greater likelihood that interest rates and building material costs will increase rather than decline in the next year or two. If you are a qualified buyer there are some excellent buys currently on the market either near the homes list price if it is aggressively priced, or through successful negotiation with a motivated seller.I am sure that there will be some who will differ with me, but I feel that the current housing market and buying opportunities are similar to those found in the stock market. Many blue chip stocks are selling at some historic low price earning ratios. Could the prices and p/e ratios fall further, certainly. Could many offer investors a great buying opportunity at current prices? I think yes. However, most financial "experts" will agree that it is difficult if not impossible to predict the bottom of the stock market and by the time such a bottom becomes evident, it may be too late to benefit from the initial turnaround/appreciation. I think the same might be said about the current real estate market.
The disparity is all of the above which includes less spec homes being built, sellers pulling homes off the market, listings expiring, foreclosures, etc. Not sure anyone has the stats for the disparity.

The stock market and real estate market are apples and oranges. You get a much better and quicker "reversion to the mean" in stocks and real estate moves much much slower because it is leveraged and not liquid.

It is not a matter of calling a bottom, which the MSM harps on every frigging day. The key to investing is managing risk!!! If you have the skills this can be done in real estate and stocks using technical and market analysis. Just because the stock market or real estate market is doing well does not mean you automatically invest in the other.

Fundamental analysis by itself(PE Ratios) is not a good manner to rely on investing in stocks. Especially when the stocks have appreciated due to a credit explosion over the past 8 years. Many, many stocks with good PEs have been crushed over the past few months in the recent correction. Does it mean they are good buys now....It depends. You have to learn how use both fundamental and technical analysis together in order to manage risk. Unfortunately very few know how to do this in real estate or stocks.

The stock market is in a structural bear market which began in 2000, which consists of mini bull and bear runs. At the end of the day if you bought and held the S&P 500 since Jan 2000 until 12/26/08 you have lost appprox 37%. Call it a lost decade!

What if this happens in certain segments of real estate?
It has happened in Japan for over a decade.

The main question is how are the current real estate agent, appraisers, buyers and sellers preparing for a much more difficult market in the future?

Insanity is doing the same things over and over especially when you have gone from a bull market in real estate into a severe bear market.

My 3 cents for the day.
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Old 12-28-2008, 11:54 AM
 
Location: Mount Pleasant South Carolina
1,125 posts, read 2,395,943 times
Reputation: 228
Quote:
Originally Posted by Flat2MT View Post
Nice try but you just don't get it USCJoe. You'd be much better off NOT posting your opinion because you are quickly losing credibility.

Interest rates will begin to climb, and rapidly, within the next 6 months. It's a given if we want the dollar to be worth anything.

You fail to realize that the stock market has adjusted downward almost 50% over the last year. This RE market has not and has a long way to go.

You continue to spout that this RE market has already adjusted itself downward and discounted the artificial price appreciation generated by the bubble. This is so far from the truth.

Could many offer investors a great buying opportunity at current prices? I think yes.

The operative word in your quote is "current" prices. It's not even close.

Do you actually believe what you say or are you just pulling our legs? I sure hope it's the latter.....
I wish that you had quoted my prior statement in my last post as follows: "If you are a qualified buyer there are some excellent buys currently on the market either near the homes list price if it is aggressively priced, or through successful negotiation with a motivated seller." So easy to pull things out of context,make generalizations and to belittle others.

Last edited by USCJoe; 12-28-2008 at 12:13 PM..
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Old 12-28-2008, 01:33 PM
 
4,209 posts, read 3,585,636 times
Reputation: 757
What about the other segments of the market -- 350 - 499,000.
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Old 12-28-2008, 02:50 PM
 
92 posts, read 102,767 times
Reputation: 40
Quote:
Originally Posted by USCJoe View Post
I and I am sure others certainly appreciate the statistics that you have analyzed and evaluated as a basis for your observations and comments. I would be useful if others would do the same. If sales/demand has declined by 37% but inventory has only increased by 11%, to what do you attribute this disparity ? A slow down in the number of homes coming on the market or sellers taking their homes off the market, possibly to wait for the market to rebound ? I do agree with you that there will be a larger percentage decline in home prices in the upper price ranges, but I am much less comfortable in speculating in the percentage decline in 2009 and possibly later should the economy not improve. I also feel there is a greater likelihood that interest rates and building material costs will increase rather than decline in the next year or two. If you are a qualified buyer there are some excellent buys currently on the market either near the homes list price if it is aggressively priced, or through successful negotiation with a motivated seller.I am sure that there will be some who will differ with me, but I feel that the current housing market and buying opportunities are similar to those found in the stock market. Many blue chip stocks are selling at some historic low price earning ratios. Could the prices and p/e ratios fall further, certainly. Could many offer investors a great buying opportunity at current prices? I think yes. However, most financial "experts" will agree that it is difficult if not impossible to predict the bottom of the stock market and by the time such a bottom becomes evident, it may be too late to benefit from the initial turnaround/appreciation. I think the same might be said about the current real estate market.
Folks, the absolute misinformation and ignorance continues. I would agree with Joe (a rare occasion) that there are many excellent long-term buying opportunities in the stock market (blue chips or otherwise), but this is only AFTER price declines of 40-60% pretty much across the board. The S&P is down approximately 40% over the past twelve months. Other asset classes (commodities, commercial REITs, emerging market equity) are down even more. So, after massive blood-letting on the financial markets, there are some great long-term buying opportunities.

Where Joe gets himself into trouble is equating the above with the Charleston real estate market. Prices have still not moved far enough down from their 2005-2006 peaks - not even close. We all know that they are headed downward, but since these homes are not traded on an efficient exchange, pricing adjustments take TIME. I don't believe Charleston real estate will bottom for another 18 months (and possibly longer), but certainly not for another 9-12. The assertion that the high-end of the Charleston real estate market offers the sort of buying opportunities of the stock market is the kind of mindless pap only a Realtor could contrive. If you listen to this sort of "advice", you are sure to get burned in a very big and very painful way.

How anyone can say that this is a tremendous buying opportunity is beyond me - Realtors have been saying this for the past 18 months, only to have each month be worse than the last. The opportunity is coming, but it certainly isn't here yet. I think you would need to be certifiably insane to purchase a home when inventories are at historic highs and the worst of the recession has yet to hit. Keep in mind all the Alt-A and ARM resets coming in 2009. If you want to gamble, go to Vegas.

And as far as low rates go, they are certainly nice, but that 5% mortgage won't be much consolation when you've lost 30% of your home's value two years from now. Act wisely or you will be in the same boat as the rest of these poor saps.

I prefer to let others catch falling knives.
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Old 12-28-2008, 02:57 PM
 
92 posts, read 102,767 times
Reputation: 40
Quote:
Originally Posted by moneill View Post
What about the other segments of the market -- 350 - 499,000.
It is similarly overpriced, with historically-high levels of inventory. In my opinion this is the segment of the market that is especially ripe for depreciation, since many of the "owners" are less financially stable and much of it was financed with non-traditional loans.

This show is just beginning. I'm popping popcorn.
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Old 12-28-2008, 03:24 PM
 
8 posts, read 19,960 times
Reputation: 12
We are looking to relocate from Atlanta to Hilton Head in the next year or so. My question is...does anyone have a feel if HH is in the same boat as Charleston as far as house prices goes? We are looking in the $400,000 range, and have been watching the MLS listings. It seems as though very few properties have been selling, with many listings being removed or expiring. Do you think the prices in Hilton head have a ways to drop as well? Can you recommend anywhere I can get more info. on their real estate market, other than just looking at the MLS?
Thanks to those of you posting...it has been very informative and interesting to get so many perspectives!
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Old 12-28-2008, 06:59 PM
 
132 posts, read 239,314 times
Reputation: 63
Quote:
Originally Posted by USCJoe View Post
I wish that you had quoted my prior statement in my last post as follows: "If you are a qualified buyer there are some excellent buys currently on the market either near the homes list price if it is aggressively priced, or through successful negotiation with a motivated seller." So easy to pull things out of context,make generalizations and to belittle others.
Looks like it's CYA time for USCJoe.

Ok USCJoe, explain this 'comment' to us...those excellent buys currently on the market either near the homes list price.... If they were such excellent buys, they'd be sold by now, correct? I have yet to see any excellent buys currently in this marketplace and neither has my realtor.

You then caveat your response to Flat2Mt by saying...if it is aggressively priced, or through successful negotiation with a motivated seller... Well now USCJoe, isn't that pretty obvious? That is the only way a higher priced home is going to sell this this depressed market.

Your response is nothing more than a confusing attempt at trying to 'explain' something you obviously don't understand.

Sometimes it is best not to say anything.
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