Area home prices take big dive in NovemberSellers were 'riding ... the boom' with inflated figures By Katy Stech (Contact)
The Post and Courier
Tuesday, December 11, 2007
Prospective home buyers awaiting a sign that prices are on the way down in Charleston could be in luck. Local home prices took their biggest monthly slide in recent memory in November, suggesting that more sellers are willing to offer discounts to close deals amid a sluggish market. Sales volume also fell last month, dropping nearly 19 percent compared to November 2006, according to figures from the Charleston Trident Association of Realtors. The group's Multiple Listing Service, which primarily tracks existing home sales, recorded 806 residential transactions last month, or 18.6 percent fewer than for the same period a year ago. The decline extended a downturn that started in Charleston nearly two years ago. 
Wade Spees Jamie Herman, son Nathan, 4, and daughter Giselle, 1, at their Wescott Plantation home on Monday in Summerville. But area home prices, for the most part, had held up on a year-over-year basis, even as the number of sales have dropped off. That changed in May, when median price fell by 1 percent. The figure remained almost unchanged in the months leading up to November, when it slipped by 2.3 percent, to $200,000. "Reality is setting in that prices were somewhat inflated in some areas," said Bruce Mullen, an agent with Prudential Carolina Real Estate. He said in many cases sellers have been basing their asking prices on values established while the market was still climbing. "People were riding on the wave of the boom from a few years ago," Mullen said. The November decline was not enough to pull into negative territory the median price for all 2007 sales, which for the Charleston region is still 1.9 percent higher than last year. It also did not play out evenly across the region. In fact, prices rose in areas close to the Charleston peninsula. On James Island, the median price was 5 percent higher than November 2006. The areas of West Ashley and Mount Pleasant that are closest to the peninsula also saw prices rise by 7 percent each. But the farther away a home is from downtown Charleston, the more likely the seller is competing with new-home builders who are offering discounts and upgrades. Beyond S.C. Highway 41 in Mount Pleasant, for example, the median price for November fell by 35 percent. And in other areas, like the outskirts of West Ashley and Summerville, nearby new construction has pushed resale values down. In North Charleston, Jamie Herman and her husband have decided to reduce the asking price of their three-bedroom home in Wescott Plantation by more than $20,000 to $224,500. "It's frustrating because there are so many new houses going up, and they're practically being given away," said Herman, whose husband is being transferred to an Air Force base in Oklahoma. William Harrison, a Charleston-based consultant and real estate lecturer at the University of South Carolina's Moore School of Business, doesn't think that 2.3 percent one-month drop will be enough to get buyers off the fence. "It's going to contribute to the uncertainty," said Harrison, who expects prices to fall further in coming months. He predicted buyers will have to see several months of declines, followed by a sudden increase in prices, before they are convinced sales have bottomed out. But for buyers who can't or don't want to wait, it's an ideal time to be in the market, said David Kent, president of the Charleston Trident Association of Realtors. He noted that low interest rates and the large selection of homes give buyers the upper hand in the current market. "Timing the market is difficult," said Kent, owner of The Real Buyer's Agent. "No one knows when the top is. No one knows when the bottom is. So now's as good a time as any." At the national level, the industry's main trade group offered a glimmer of potentially upbeat news Monday, saying the battered housing market is on the verge of stabilizing. The National Association of Realtors also inched up its outlook for 2007 and 2008 home sales. The revised monthly forecast, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million — the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year. The group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million, which works out to 0.17 percent. Numerous other economists are far less optimistic. They predict weak sales and falling prices through next year and beyond and emphasize that those problems could worsen if the economy sinks into a recession. The Associated Press contributed to this report. Reach Katy Stech at 937-5549 or kstech@postandcourier.com. |
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Comments
This article has 11 comment(s)
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Posted by Oceanlover on December 11, 2007 at 6:03 a.m. (Suggest removal)
Geez, let's see, who saw this coming? Ummm, surely no one. Not when an obvious oracle like Al Parish talks up the local housing market and everyone buys his rose colored scenarios. Wait, what do you mean that the emperor drives a rose-colored Jag and has no clothes? Not when Richard "Trademark" Davis and crew found the key to never ending wealth through house flipping and helped drive the value of a 70's era brick ranch in the Old Village up from $198,000 in 2003 to $600,000 a few years later. If we don't buy now, we'll be priced out forever!! I'd better go stand in line with the rest of the sheeple to buy a condo in Mt P because there's a stylish couple looming over me on Hwy 17. beckoning me to ownthemeridian.com. They've obviously have found the keys to the good life and and sexiness lies in a mortgage, vinyl siding and a pool. Wait, whaddya mean that the website's down? Yep, It's a new paradigm! People are moving here in droves from places like DC, where homes go for three times as much! There'll be 100,000 new homes here in just a few years - and there will be more than enough people to fill them ALL! Oh, wait, whaddya mean jobs up in DC pay way the heck more too? Wait, whaddya mean that home prices up there are dropping and people can't afford to come down here and SPEND SPEND SPEND? Wait, what do you mean that if my home value declines, I can't just unload it like a stock? You mean I'm stuck with a declining asset? Well shoot, let's see. I don't have any equity and that nice man at the mortgage office set me up in a loan with no down payment. So I think I'm just gonna walk away. No one could have seen this coming. No trainwreck here. Move along, move along.
Posted by willismbarber on December 11, 2007 at 8:25 a.m. (Suggest removal)
Five bucks says oceanlover got burned on a real estate deal, or either missed the bus when the rest of us rang the register on real estate. Its just like any market it goes up and down and you win and lose. You just have to make sure your wins are bigger in the end. The problem is most of these folks either had no clue what they were doing or sought poor representation. We will see who is sitting pretty on Hwy 17 in five years.
Posted by Oceanlover on December 11, 2007 at 11:04 a.m. (Suggest removal)
Hey Barber,
Wrong. I wasn't stupid enough to invest in this ponzi scheme either way from the get go, and I made a fair chunk of change by selling a Grand Strand property just as this bubble was inflating and would have made more if I had been psychic and could have predicted the moment just before the bubble would burst. I'm now a happy renter, waiting for this meltdown to subside. Then I'll buy a home for a reasonable price with a responsible mortgage. It'll be interesting to see who's sitting pretty on Hwy 17, though, you're right. Hopefully it won't be homeless people asking for handouts. I somehow doubt too, if it will be the sexy mortgage broker and R/E agent couple on the long gone Meridian billboard. I think I heard somewhere that they got a divorce when he went to jail for for mortgage fraud. And I think she's now got the place up for sale on Craigslist - don't believe me? Just key in the word in the search box.
Posted by SadieB on December 11, 2007 at 11:32 a.m. (Suggest removal)
Looking at what prices did this November in comparison to last November is simply an indicator of momentum, not an absolute. Most of us have come to understand the stock market doesn't go straight up forever without correcting downward when prices don't represent true value. Once corrected, growth resumes in a positive direction...but we haven't had the same experience with the value of our homes.
Beach and waterfront properties aside, the strong rise in home prices in this market over the past ten years or so has been way out of line with most other markets...we're long overdue for a correction. If you consider the poor state of the mortgage and homebuilding industries as a whole, a dollar that's very weak against foreign currencies by historic measures and all the uncertainty in countries that produce oil and that 2008 is an election year, it's reasonable to conclude the housing market will get even weaker over the next year or so.
Expecting those who write about local housing and work in local real estate to be anything less than optimistic is naive...most people aren't likely to openly bite the hand that feeds them.
With a few exceptions, the metro Charleston housing market could go down 50 to 60% and people who bought homes 5 to 7 years ago would still be ahead...it's another story for those who bought more recently on dangerously extended credit in an overheated market. Their continued losses are sure to contribute to an already weak environment.
Posted by willismbarber on December 11, 2007 at 12:40 p.m. (Suggest removal)
Just for clarification I am not saying the market will not continue down further in the near future. I think we have a little ways to go. What I am saying is it will eventually go back up. Someone who needs a place to live as there primary residence is throwing money out the window trying to time the market. They are just making other folks rich by paying rent. Even the best real estate or stock market investors rarely nail it, they are not trying to milk every penny of profit. People loose money trying to hit absolute bottoms and tops in any market. The group of people that do not understand this are operating off of fear and greed, while those who understand it are making money from their loss.
Posted by ForPnC on December 11, 2007 at 3:33 p.m. (Suggest removal)
I wonder how much those Wet Dunes... I mean... Wild Dunes properties AREN'T worth in this market.
Posted by moonpie on December 11, 2007 at 9:26 p.m. (Suggest removal)
"Reality is setting in that prices were somewhat inflated in some areas," said Bruce Mullen, an agent with Prudential Carolina"
NAH YOU THINK? CHARLESTON IS THE MOST INFLATED MARKET IN SC. YES FRIENDS OVER MB, HH OR ANYWHERE ELSE. THOSE POOR DANIEL ISLAND HOMEOWNERS ARE THE ONES I SEE SITTING ON PROBLEMS. ANYONE RODE THRU THERE AND SEEN WHAT $950000 WILL GET YOU? INFLATED IS AN UNDERSTATMENT.
Posted by tigerclem77 on December 11, 2007 at 11:29 p.m. (Suggest removal)
I think Al Parish being the EF Hutton of Charleston Real Estate during the boom sums it all up. I remember a bartender at Chiles telling me how he was buying up these apartment to condo conversions like monopoly deeds. This is just the tip of the iceburg folks. Besides over inflated prices, what about the shoddy quality of some of these homes being built in these sub divisions. I see future ghettos.
Posted by build259 on December 11, 2007 at 11:37 p.m. (Suggest removal)
Wait the til the spread narrows between agency backed mortgages and non-conforming jumbos. Things are still bumping in Chucktown, but that will get the party going again.
Lover, are really renting?
Posted by build259 on December 11, 2007 at 11:38 p.m. (Suggest removal)
Wait the til the spread narrows between agency backed mortgages and non-conforming jumbos. Things are still bumping in Chucktown, but that will get the party going again.
Lover, are you really renting?
Posted by misfit on December 13, 2007 at 1:47 p.m. (Suggest removal)
Why would more people come here and buy houses now? If they want big city traffic, they can go to a big city. Why come here? For the traditional low wages that Charleston has always been known for? Until we change the way we manage labor and roads, Charleston will always be a great place to visit or retire to, but never a good place to make your way through life.