Home sales decline againLowcountry prices buck trend, remain firm BY KATY STECH
The Post and Courier
Thursday, October 11, 2007
Lowcountry prices buck trend, remain firm Homes sales in the Charleston area were off significantly again last month, weighed down by too much supply and not enough demand. But prices did not follow suit. The Charleston Trident Association of Realtors said Wednesday that 885 homes changed hands in the three-county region in September, a 28 percent drop compared with the same month in 2006. 
Alan Hawes Signs advertising new subdivisions compete for space at the intersection of Bacons Bridge and Dorchester roads near Summerville It was the second-steepest decline in monthly sales since the local housing slump took hold early last year. Prices are another story, as they have not fallen in step with the slowdown. Instead, the median home price, or the midpoint between the highest and lowest sale prices, rose slightly to $202,178 last month. "Housing is worse than gasoline. The price goes up and doesn't go down," said Frank Hefner, an economist with the College of Charleston. Hefner said one explanation for the staying power of home prices is that owners who aren't in a hurry to sell are waiting for the right offer. Also, builders are trying to keep their prices stable, but to do so they are offering upgrades and more-attractive financing packages to bring buyers in the door, Hefner said. Nearly every zone that the Realtors association tracks saw sales volume drop off last month. The declines were mild in some areas and eye-opening in others. For example, buyers closed on nearly the same number of homes on Daniel Island, the Wando area and the section of the peninsula south of the Crosstown as they did in September 2006. Sales listingsTo read the complete sales listings, click here. Other areas, including parts of Summerville and West Ashley, weren't so lucky. In Hanahan, sales plummeted to 10 last month, compared to 84 a year earlier. The competition for buyers is especially tough in developing suburban residential areas where sellers of existing homes are going up against deep-pocketed national companies that are offering incentives on newly built models, said Tenia Cattles, a real estate agent with Century 21 Properties Plus. "They get very frustrated because they can't give away the farm like builders can afford to do," she said. Frank Finlaw, the local president of Atlanta-based Beazer Homes, said September sales for his division were healthy compared to the first half of the year, thanks to reduced prices and more-attractive incentive packages. "We're much more willing to negotiate," he said. Drop zoneThe region's top five Multiple Listing Service zones ranked by sales volume last month: Area Sept. '07 sales Sept. '06 sales Difference Summerville-Ridgeville 94 126 -32 Jedburg-College Park Road-Highway 17A 84 91 -7 Mount Pleasant, south of Highway 41 90 152 -62 Highway 52 corridor 83 65 -18 North Charleston-Ladson 70 117 -47 These days, many local home buyers are either relocating from other areas or are making their first purchase, Finlaw said. "Someone who has to sell their house — those folks have come to the realization that it would be very difficult to sell right now," he said. Experts agreed that the local inventory will have to fall back to a more-manageable level before the market trends will change course. As of Wednesday, 10,887 residences were listed for sale in the Charleston region, more than double the average number of properties on the market in 2004 and 2005, according to association data. Finlaw noted that the local supply of new homes is falling, a good sign for the industry. Once that happens, demand for existing homes will go up, bringing the overall market back into balance. "This has been a cyclical business since the housing industry started," Finlaw said. The rental side of the housing industry also is providing some relief, said Bonnie Miller, owner of Mount Pleasant-based Old Dominion Realtors. She said some owners who bought a new home before selling their first are having to seek tenants to help them cover both mortgages. As a result, demand for property management services from Miller's company have taken off, she said. Miller said the rental trend "helps the market, too, because it gets some of that influx of supply off." Nationally, the broader outlook for housing dimmed a bit Wednesday, when the National Association of Realtors revised its 2007 sales prediction. It now expects sales to be off nearly 11 percent compared to 2006. A month ago the group called for an 8.6 percent year-over-year decline. The association has said it expects a rebound to start in the middle of 2008. Reach Katy Stech at 937-5549 or kstech@postandcourier.com. |
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Comments
This article has 7 comment(s)
Posted by charleston on October 11, 2007 at 3:46 a.m. (Suggest removal)
Keep dreaming. . .
Posted by Chazsurfer on October 11, 2007 at 6:29 a.m. (Suggest removal)
Katy,
I mean no offense, but this is a highly misleading bit of reporting. Of COURSE prices are going down in the Charleston area - particularly on the low end. They are way the heck down from where they were at this time last year in my neighborhood. What is MASKING this is the fact that HIGH END homes are selling and they are driving the entire median price upwards. If five homes sell for $200,000, and one sells for a million, it creates a VERY different median price picture than if only one house sells for $150,000 while that same million dollar house on the beach still sells for a million. It artificially drives up the median and creates a false impression. Hopefully one of your editors will right this wrong by assigning a more in-depth story about what's REALLY going on with home prices here. Homes are reverting back to what people can actually afford. If they don't, they're sitting on the market collecting mold.
If you want some more examples of how the National Association of Realtors spins the median price data, check this quote from the San Jose, Calif Mercury news:
"But rising median prices this year have been driven largely by the fact that far fewer homes than normal are selling in the lower-priced parts of the county. With many of the cheaper homes taken out of the pool of transactions being measured, the median price gets pushed artificially higher."
That's the real story here, in Charleston as well. And that's the real headline.
http://www.mercurynews.com/realestatenew...
Posted by greener1 on October 11, 2007 at 8:10 a.m. (Suggest removal)
Realtors are crooks. I took real estate classes 2 years ago and all we heard was the bubble will never burst, "WE'RE CHARLESTON," and all along I said to other, yeah right idiot, they're aren't the jobs here to be supporting all these 300k plus homes you see everywhere! You think it is bad now, just wait.
And for realtors, I hope you all put some of that $$$ you made in the bank because a lot of you don't have the means to do anything else. How can a profession that only requires minimal training and no education really have any substance. Many of these monkeys didn't even graduate from high school and we take their word as gold, whatever!
Posted by concerned_NC on October 11, 2007 at 8:19 a.m. (Suggest removal)
I pity the people in the City of Charleston, who were dupped into buying such overpriced homes. These people are really screwed.
Well Mayor Joseph P. Riley, Jr., what are you going to do to help your loyal subjects survive?
Posted by Chazsurfer on October 11, 2007 at 8:36 a.m. (Suggest removal)
Charleston was the original land of "Flip This House". There seems to be this mindset that we're somehow immune to a real slowdown because the economy here is somehow magic and people want to live here. Well sure they wanna live here, but chaz's economy isn't magic, and it was and is largely based on real estate (with apologies to Google, Force Protection, tourism and the Port). Once once cheap financing dried up, all those wild price increases and lines for new developments disappeared.
All you have to do is to take a drive thru any tract house subdivision, or along Folly Road past the EMPTY new condos, and see the wash of "for sale" signs to know that there are a heap of flippers getting burned and bloodied. Rather than lowering prices realistically, they're getting bad advice from realtors who say "the median is rising". They're holding on and praying that magically things are going to turn around and their home will sell. Realtors feed into this. They say, 'oh the NAR or Trident Realtors say things will be turning around in a couple of months'. Where's the proof? No one freaking knows, but if a newly (meaning now off the cheap, addictive crack of mortgage backed CDO's) S&P says things won't turn around til at least 2010, you might get an indication of how bad things are. The NAR has been so consistently off projections and flat out wrong lately that booyah JIM CRAMER calls them PRAVDA - based on the old Soviet news agency.
People will pay what they can afford. If you make $55-65k or so a year, roughly Chaz mean, then how the heck can you afford a $400k starter home in Mt P that sold for $200k less in 2001? Well, you can drink the Jamestown cool-aid and get a 'no doc' adjustable rate mortgage with a bogus 2 percent "teaser" - and we know how badly these are ending up. And now that sort of financing is drying up faster than Lake Hartwell.
Orrrr, if you're smart, you're gonna balk and rent a great place that costs you a half to a third of what you're neighbor's paying in his or her mortgage and wait till the price on a home and traditional mortgage leaves you with monthlies that will be in line w/what you can afford. BUT you'll make sure that the flipper from whom you just rented your great house for pennies on the dollar is not going to end up in foreclosure him or herself.
Bottom line: prices have to fall. And they are. It's just that we didn't see that reflected in this article.
Posted by streetmutt on October 11, 2007 at 11:14 a.m. (Suggest removal)
I think I found a kindred spirit with ChazzSurfer.
JohnQ- forget about investing the company, let's start our own together. Nothing like capitalizing on fools who bet it all and lost.
I bet Brad Rundbaken giggles every time something like this comes out. Meanwhile, Rainwater is on his huge estate in Lake City betting that the apocalypse is coming with every home not sold and every cent raised by gas prices. And maybe it isn't ... but it sure looks like it
Posted by Rongodzilla on October 11, 2007 at 1:23 p.m. (Suggest removal)
I remember back a few years ago everyone saying that the Real Estate bubble in Charleston would never burst. Just build build build because this market was immune to a downturn in the industry. Ironically, I think one of the biggest preachers of this message was a man named Al Parish. Makes me think of PT Barnum!