With the end of summer and start of school, real estate buying activity in the Charleston area is still very good, but starting the seasonal slowdown.  Prices are steady, but we can see that the number of listings going under contract is slowing down at this time of year.

It’s interesting to watch the change in non-traditional real estate sales now.  These include new construction, foreclosures, and short sales. There are fewer non-traditional properties being listed this year compared to a year ago.  Last year, there were 777 short sales, 908 foreclosures, and 2743 new construction.  As of 8/13/14, there are only 297 short sales, 83 foreclosures, and 1054 new construction.  As expected, short sales and foreclosures continue to decline slightly in their percentage of properties under contract, while the new construction percentage continues to rise.

The most number of non-traditional listings going under contract currently are new construction sales occurring in Mt. Pleasant north of Hwy. 41, Summerville/Ridgeville, West Ashley, and James Island areas.

The most short sales currently on the market are located in N. Charleston, Ladson, Summerville, Ridgeville, and some in West Ashley.

The most foreclosures for sale are located in the N. Charleston/Summerville area outside of I-526 and in James Island.

If you’re looking for a short sale, foreclosure, or new construction option to buy in the Charleston area, give me a call.  We’ll compare them to the traditional resale listings and make sure you are getting the best deal!

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2014 has been a great year so far and it looks like we have a chance to sell 14,000 homes.  We’re up 6% in number of transactions.  Our median sales price is up almost 9% over 2013 and at over $220k is even higher than the peak in 2007.  A few areas actually have decreased in number of sales because the list prices have gotten so high and/or a lack of inventory. South part of Mt. Pleasant is an example of this.

The months of inventory is now around 5 for the entire MLS.  Avg. is 6, so 5 means a very strong market.  Many areas have 4 or less and are well into a sellers market.  However, there are some areas where it is still a buyers market.

Buying activity continues to be very strong.  Some of the stronger areas that have seen large median price increases over last year include:

AREA                                                        INCREASED % OVER LAST YEAR

N.Charleston Area inside I-526                 50.9%

Peninsula Chas. inside of crosstown          33.3%

Peninsula Chas. outside of crosstown        24.8%

Daniel Island                                                   19.7%

Mt.Pleasant North of IOP Connector         18.2%

Wando/Cainhoy                                              16.5%

Mt.Pleasant South of IOP Connector         16.5%

Johns Island                                                    15.5%

Folly Beach Area to Battery Island            14.7%

W.Ashley outside I-526 to Rantowles        14.5%

James Island                                                   13.9%

W.Ashley inside I-526 to Ashley River      10.0%

According to national real estate analyst CoreLogic, home prices are expected to rise 6% from May to a year from now.

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Now that the Charleston real estate market is getting strong again and in some areas has already recovered, investors that were sitting on the sidelines before are now coming out of the woodwork and want to get in on the action. I often get asked to find them a deal, something they can quickly fix up and either rent out for a few years or “flip” in a few months. Something with built in equity. Two years ago, I was finding these gems easily for clients, and they found it easy to negotiate with the sellers and get a great price. Those investors are sitting pretty now with a lot of equity and high rental income.

The average MLS area lost about 30% in value in terms of $/sqft since the peak of the market in 2006 to the bottom in 2011. Now, fewer homes are on the market and pent up demand from buyers are driving the prices up making it difficult to find so many great deals. Only 6% of the active inventory on MLS are short sales or foreclosures which equates to about 320 active listings. In 2011-2012 there were often around 1000 short sale and foreclosure listings on the market at any given time. Investors had the pick of the litter back then! Today, 15% of listings currently under contract are either short sales or foreclosures. It appears that banks have released and sold a good majority of their foreclosure inventory. And fewer short sales are in existence most likely because the market shifted thereby allowing homeowners to sell easily.

So where are the deals? There are still some short sales and foreclosures out there, but you’ve got to dig deep. Hire a realtor to find them for you. Look for those listings that have been on the market for months with no offers yet. You also need to be willing to have vision for the ugly houses that no one loves. If you have the vision and money to fix up, then making a quick profit is absolutely possible. There will always be homes that have been neglected over time and need to be priced lower than market value. These are the diamonds in the rough that are waiting to be discovered by investors.

If doing major renovation and clean up is not your thing, then just jump into the market at fair market value and hold on to the property for a few years. The upward momentum that the Charleston area is experiencing will continue for a long time. Ride the wave and gain annual appreciation as well as great rental income. Many buyers are choosing new construction. About 32% of the current listings under contract on MLS are new construction. Building a new house is a great way to get into the market and build up equity. When you’re ready to sell five years from now, you’ll look back and won’t believe how little you originally paid for the property.

Mt. Pleasant is leading the way in the sellers market with only 3 months of inventory and median prices above $350k and $175/sqft. Hardly any home in Mt. Pleasant that is going under contract is under $150/sqft. James Island and West Ashley, both also close to downtown and the beach, are also doing quite well. North Charleston has also seen higher prices because of Boeing. Daniel Island is a favorite choice among Boeing executives because of it’s location and upscale lifestyle. Summerville and Goose Creek have been a bit slower in their recovery as they are they are further away from downtown Charleston, but things seem to be moving in the right direction there now.

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Investors who are looking to buy property and lease out for a while before cashing in on anticipated appreciation will first look at the avg. cost to rent in the area of interest. All expenses including mortgage, 6% property tax, higher cost of insurance, and HOA/regime fees are all factored when determining how much rent to charge tenants. Here is a list of avg. $/sf that investors can expect to receive. The low inventory of rental properties coupled with the increase in tenants has caused rents to go up…a good thing for landlords, but not so good thing for tenants.

Daniel Island – 15 active rental listings
Avg. Rent – $1.43/sf
Typical tenants include families building their own property on the island or Boeing executives.

Downtown – 183 active rental listings, 59 have at least 2 bdrms and 2 baths
Avg. Rent = $2.11/sf
Typical tenants include MUSC or CofC students. Short-term tenants are common.

Mt. Pleasant – 58 active rental listings; 26 have at least 3 bdrms and 2 baths
Avg. Rent = $1.25/sf
Typical tenants include families moving into the area before they decide to buy or young professionals.

Summerville/Ladson – 134 active rental listings; 80 have at least 3 bdrms and 2 baths
Avg. Rent -=$.79/sf
Typical tenants include Boeing employees moving into the area and not sure where to live yet.
Also military stationed at AFB, and low-income working families.

Goose Creek/Hanahan – 45 active rental listings; 24 have at least 3 bdrms and 2 baths
Avg. Rent = $.78/sf
Typical tenants include families and/or military stationed at Weapons Station.

West Ashley/James Island – 70 active rental listings; 22 have at least 3 bdrms and 2 baths
Avg. Rent = $1.08/sf
Typical tenants include young professionals or retirees.

North Charleston – 45 active rental listings; 20 have at least 3 bdrms and 2 baths
Avg. Rent = $.80/sf
Typical tenants include singles, young couples just starting out, and low-income working families. Long-term tenants are common.

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The Mount Pleasant real estate market is back on track and getting better each month…at least home sellers think so. Buyers want to live in the growing Charleston suburb, but prices are going up quickly. Many buyers keep finding themselves competing for the same house with other buyers, which drives the prices up even more.

The accelerating real estate performance of Mt. Pleasant can be seen by studying the absorption rate and median price. The absorption rate is how many months it will take for all of the homes on the market to be sold. An average absorption rate for a healthy market is 6. The graph below shows the breakdown over the past three years for single family detached homes in Mt. Pleasant according to price range. Everything priced at approximately $569,000 and below is well below the average mark at absorption rates of 1-3! Try finding a decent size home at about $300,000…buyers will attest that it’s difficult. Anything priced in the higher ranges of $600,000 or above is slightly below average at 8-9 months absorption rate. But this is still good when you consider three months ago the absorption rate was over 14.

Mt. Pleasant 2014 Absorption Rate

The median price in Mt. Pleasant for all types of properties is $355,000. If we look at only single family detached homes, the median price is about $397,000. This is a 12-14% increase from last year.

And finally, new construction has been picking up speed over the past couple years. Mt. Pleasant has had a 76% increase over last year in new homes sales. Many of the new home communities include townhomes in Park West, Carol Oaks, Oyster Point, Dunes West, Charleston National, and Royall Palms. Single family detached new homes are going up in Carolina Park, Rivertowne, Park West, Tupelo, Somerset Oaks, Wexford Park, Bluff Estates, Hamlin, Dunes West, Darrell Creek, Pepper Plantation, Scotts Creek, Watermark, and Hibben.

Mt. Pleasant 2014 New Construction Sales

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Many renters are now in the position where they are realizing it may just make better financial sense to buy a home rather than continue leasing. Some renters have no choice but to rent due to career uncertainty, income uncertainty, or bad credit. But for those that know they are going to live in an area for at least 5 years, they should do the math and see which option will save them more money.

Reasons why buying is better than renting:
• Equity you will accumulate with each mortgage payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home. Or you can set the goal to pay off your mortgage and live house payment free in retirement!

• Tax deductions on mortgage interest as well as property taxes.

• Freedom to renovate or decorate any way you want. It’s your house!

NYTimes.com provides this rent vs buy calculator which is a useful tool for comparing the numbers.. Rent vs Buy Calculator

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Mar

19

Many renters are now in the position where they are realizing it may just make better financial sense to buy a home rather than continue leasing. Some renters have no choice but to rent due to career uncertainty, income uncertainty, bad credit. But for those that know they are going to live in an area for at least 5 years, they should do the math and see which option will save them more money.

NYTimes.com provides this rent vs buy calculator to help you figure it out.
Rent vs Buy Calculator

Reasons why buying is better than renting:
• Equity you will accumulate with each mortgage payment. A general rule is that if you intend to stay in your property for at least five to seven years, the costs of purchasing the home are more likely to be offset by accrued equity and increased housing value. In the event that equity in the home grows to more than a 20-to-80 percent loan-to-value ratio, you will be able to borrow against your equity in the home. Or you can set the goal to pay off your mortgage and live house payment free in retirement!

• Tax deductions on mortgage interest as well as property taxes.

• Freedom to renovate or decorate any way you want. It’s your house!

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Featured Listing and Neighborhood
368 Evian Way, Belle Hall ~ Mt. Pleasant

List Price $833,000

Listing Information and More Photos

Just off I-526 and Long Point Rd. in the center of Mount Pleasant, lies Belle Hall Plantation. This community has a home for just about anyone wanting to live East of the Cooper. With seven neighborhoods, Belle Hall has single-family homes priced as low as mid $200,000?s and as high as over $1M, depending on which subsection and lot you choose. Amenities include ponds, walking trails, play parks, marsh trails, two neighborhood pools, tennis courts, basketball courts, volleyball court, and a clubhouse that can be rented by residents. Great shopping and restaurants are just across the way at Belle Hall Shopping Center that include Stein Mart, Harris Teeter, Moe’s, Ross’, and CVS. Belle Hall Elementary is a huge attraction to families living here because it is within walking and biking distance from the neighborhood.

BELLE HALL NEIGHBORHOODS

Veranda, Rice Bay and Courtyard were the first neighborhoods to be built in the early 1990s and consist of spec. homes built by Beazer and Centex with mostly vinyl siding for the exterior appearance. These homes are currently priced in the mid $200,000?s to upper $300,000?s. The Veranda section has a small size pool, playground, and basketball courts. The pool is open to all Belle Hall residents. The larger pool is located behind the clubhouse on Belle Hall Pkwy.

Battery Point is a pocket neighborhood with less than 80 homes ranging in size from 2,000 to 3,500 square feet. It is comprised of a mixture of spec. homes and custom-built homes on nice size lots. Prices are typically in the mid $400,000?s to low $500,000’s.

The Island consists of about 30 custom homes, many of which are located on pristine land with beautiful marsh views. These antebellum, raised homes range in price from upper $600,000’s to over $1 million. This is a close-knit community in itself, but they also enjoy the amenities that the rest of Belle Hall enjoys.

Evian homes offer custom designs and finishes with beautiful views of the marsh as well. This is a small gated community that retains its own covenants separate from Belle Hall. Prices range from mid $600,000?s to over $1 million. There are about 35 existing homes here, and still a few lots available.


The Hibben is a unique neo-traditional style neighborhood that will have 300 homes when complete. It used to be a working plantation in the 1700?s. At more than 2/3 of the way built-out, the developer has almost completed Phase 5 lots which consist of cottage style homes sized in the low to mid 2,000 sq. foot range. Other homes from previous phases are much larger in size up to about 5,000 square feet. The last phase, Phase 6, will consist of about half of the lots being premium lots with marsh views. Currently, prices range from upper $500,000?s to over $1 million. Each home is custom built by local preferred contractors on small lots typically less than .20 acres in size. Most of the homes have back alley living just like you’ll find in downtown Charleston. The neighborhood has its own play park, crabbing dock, beautiful oak and pine trees, ponds, sidewalks and marsh trails, and the developer plans to build a pool for Hibben residents in the near future.

Belle Hall.net

That’s So Hibben

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DANIEL ISLAND

Median home sales price: $502,500

Number of sales: 312

Avg. days on market: 80

DOWNTOWN CHARLESTON

Median home sales price: $377,000

Number of sales: 645

Avg. days on market: 139

FOLLY BEACH

Median home sales price: $375,000

Number of sales: 121

Avg. days on market: 160

ISLE OF PALMS/WILD DUNES

Median home sales price: $591,457

Number of sales: 262

Avg. days on market: 222

JAMES ISLAND

Median home sales price: $229,500

Number of sales: 739

Avg. days on market: 73

JOHNS ISLAND

Median home sales price: $218,274

Number of sales: 417

Avg. days on market: 66

KIAWAH ISLAND/SEABROOK ISLAND

Median home sales price: $503,000

Number of sales: 95

Avg. days on market: 205

MONCKS CORNER

Median home sales price: $162,550

Number of sales: 1663

Avg. days on market: 66

MOUNT PLEASANT

Median home sales price: $339,000

Number of sales: 2306

Avg. days on market: 64

NORTH CHARLESTON

Median home sales price: $131,450

Number of sales: 1053

Avg. days on market: 62

SULLIVAN’S ISLAND

Median home sales price: $1,447,500

Number of sales: 42

Avg. days on market: 167

SUMMERVILLE

Median home sales price: $168,000

Number of sales: 1542

Avg. days on market: 70

WEST ASHLEY

Median home sales price: $198,000

Number of sales: 1424

Avg. days on market: 62

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The Post and Courier reported on January 18, 2014, that two expert economists agreed that homes sales in the Charleston area will continue to rise about 3-5% this year, a modest increase when compared to the 21.5% increase in 2013. Dr. Joseph Von Nessen, research economist at the University of South Carolina’s Moore School of Business, and Steve Slifer of Charleston-based NumberNomics presented their staticstically-backed forecast at the 2013 Year in Review Residential Market Update to the Charleston Trident Association of Realtors on January 14, 2014.

Last year, Slifer predicted that 30-year mortgage rates would dip down to 3 percent in 2013. And, Von Nessen said home sales had already hit bottom. These two predictions came true as evidenced by the dramatic increase in homes sales in 2013. According to the Association, 12,573 homes sold in 2013, almost matching homes sales in 2007. The median home price last year increased 8% over that of 2012 to $208,000. According to an article published by U-T San Diego on January 2, 2014, “The average 30-year-fixed mortgage rate began 2013 at an average 3.34%, only to climb to 4.53% as of Thursday, Freddie Mac reports.”

Von Nessen advised realtors to keep the momentum going in home sales in 2014 by creating a sense of urgency to their buyers. “There is a good reason. Mortgage rates are rising, and home prices are up. Buyers need to act now,” says Von Nessen. “Shoppers can’t get a better deal a year from now,” he says.

Von Nessen’s Outlook on South Carolina and Charleston Area:

• In the past two years, South Carolina has topped all states in leading economic indicator growth. The state’s economy is expanding…more stability, more consumer spending, more job creation, more momentum.

• Ten South Carolina counties including Berkeley, Dorchester and Charleston are expanding beyond pre-recession rates and six more are expected to within a year.

• Metro Charleston has led the state in growth over the past three years.

Read full slide presentation

Read full Post and Courier article

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