Charleston SC Real Estate Market Analysis: January 2016 Update
Of course, with all these great events and great restaurants you might expect that Charleston real estate is booming. And it is!!
- This was the 3rd best year in Charleston history, with more than 16,000 units sold and at a median sales price of around $235,000.
- New home construction is ramping up in many areas to meet the increased demand. We are in a sellers market in most MLS areas, as we have only 3-4 months of inventory in most areas.
- Demand was strong for December where we had seen a seasonal drop off in the past.
- Short sales and foreclosures are essentially gone now and make up an extremely small percentage of our sales.
- The good news is that prices are only rising moderately and we haven’t yet quite gotten back to the trend line for prices here in Charleston, so it appears that we are still slightly undervalued, but this is not expected to last much longer.
- Credit is much tighter and harder to get than it was back in the 2005-2007 boom. Mortgage rates are still below 4.5% and that is certainly a big driver of demand right now, but buyers have to jump through plenty of hoops to get that money (and that’s a good thing!). The recent hike in short term interest rates by the Federal Reserve may signal that inflation is coming back, and this may cause mortgage rates to inch up accordingly.
As our economy improves, interest rates may rise, reducing borrowing capacity for would-be home buyers. If you are thinking of selling this may affect your price, as a higher interest rate will restrict your pool of potential buyers and reduce demand in your price point.
We believe your home will sell for maximum price in early 2016, while the market is still "hot", and interest rates are still low! This is when many homebuyers will come out of the woodwork to try get ahead of inevitable interest rate hikes.
We recommend you check the current market value of your home. Click this link to get a free, online quick market value estimate. You may be pleasantly surprised! Of course, this tool provides just a rough estimate. If you are serious about selling your home, we can give you an accurate estimate that takes into consideration your lot premium, upgrades, additions and other features that you love about your home. Call/text Alan at 843-900-0155 with details of your home.
There is urgency to act before interest rates start climbing. Every 1% hike in interest rates will reduce your buying power by more than 10%. Combined with this, real estate prices are also climbing, which will be a "double whammy" on your affordability. It may be a good idea for you to even pay a penalty to get out of your lease, if you are able to buy a home sooner, rather than waiting until the lease expires. Call us on 843-900-0155 to set up an Initial Buyer Consultation - we'll help you figure out your alternatives - at no cost or obligation.
Market Stats - (click Images to enlarge graphs)
This graph shows short sales, foreclosures and total closed sales. Distressed Sales appear almost insignificant as a proportion of the total number of home sales in the Charleston, SC area. While this is good for home sellers (prices stabilize and grow), finding "deals" is increasingly difficult for buyers and rehabbers.
Builders have ramped up their production in most areas, especially in the outer areas of the Charleston Area, where land is more available and affordable. In some areas (like Mount Pleasant North of IOP Connector) new construction homes take the lion share of pending sales (60%+). The chart shows the behavior of new vs. pre-owned sales in the Charleston Area.
After experiencing phenomenal sales and price increases in 2013 and 2014, the Mount Pleasant residential real estate market has stabilized a little, experiencing a more moderate growth in 2015. For the first time in many months we saw listings expire and prices reduced at the end of the summer. Although still undersupplied in a "seller's market", Mount Pleasant is no longer the "hottest area" in the Charleston MLS. West Ashley and James Island (close to Downtown but with more affordable prices) are now disputing this honor.