By Katy Stech
The Post and Courier
Wednesday, January 13, 2010
The impact of an expanded government tax break for homebuyers trickled up in the Charleston area last month as the incentive appears to have given local prices a nudge.
Sales activity increased in the $200,000 to $250,000 range during December, helping push the median home price up by about 2 percent to $195,534 -- its highest point for 2009.
In all, the Charleston Trident Association of Realtors recorded a total of 618 local home sales last month, a 30 percent increase from the December 2008.
Inventory listed for sale with the group's Charleston Trident Multiple Listing Service dropped 5 percent to 8,940 compared to November.
Jeremy Willits, president of the association and a commercial broker with Grubb & Ellis|WRS, said the outlook for the residential real estate industry has improved markedly since December 2008, when sales volume was down by one-third year-over-year and the median price was off 9 percent.
"We're in a much more positive place at the end of 2009, actually seeing market increases," Willits said in a statement Tuesday. "While we don't anticipate tremendous growth in 2010, we do expect to see continued steady growth over the next year."
For most of last year, much of the region's sales activity was driven by first-time homeowners, which put downward pressure on prices. The number of homes that sold for $160,000 or less increased 18 percent from 2008 to 2009, according to association data.
While last month's volume was up nearly one-third year-over-year, it slipped slightly compared to November, when the federal government was expected to end its $8,000 tax credit aimed at boosting activity among first-time buyers. Home sales surged in November in most U.S. markets as purchasers rushed to close on their properties, even though the tax break had been extended through this spring.
Kathy Jordan-Rawers, broker-in-charge of Exit Realty of Sullivan's
Island, also credited historically low interest rates for the rebound. She said that the decision to expand the tax credit to include certain homeowners who have lived in their houses for at least five years may have stoked sales beyond the entry-level price range.
"I believe there's a slight return of consumer confidence in the market," Jordan-Rawers said. "We're seeing the market stabilizing ... and I feel like we're starting to get back on a growth pattern."
Going forward, it's uncertain how much longer the local real estate industry will enjoy the effects of the tax incentive.
College of Charleston economist Frank Hefner predicts a tax credit "hangover" -- that is, a painful slowdown -- will settle in long before the perk expires April 30.
"Anyone who's going to make their move already did," he said.
Reach Katy Stech at 937-5549 or kstech@postandcourier.com.