Report Analyzes Area Housing Market

Below is the second article that was published in the Post & Courier in the Saturday Real Estate section. FYI, I am not sure why the reporter called me a renter. I actually own my own condo in Charleston.

SATURDAY, SEPTEMBER 16, 2006 8:37 AM
Report analyzes area housing market
BY JIM PARKER
The Post and Courier

A much-posed real estate question is: "What will happen to the Charleston housing market?" The short answer: There is no short answer.
Brad L. Rundbaken, a renter, and investor and an appraiser, realized that problem. So he set out to come up with a report, complete but not too wordy, that would chart the market while addressing trends.
"I'm working on it as I go," said Rundbaken of Atlantic Appraisals in Mount Pleasant. "I don't want it to be too complex."
At the same time, he said the findings are "very well-organized."
Rundbaken launched www.charlestonmarketreport.com last month to provide a broad-based economic outlook on the latest movements in the area housing market. The indicators, which in some cases has 15 years or more worth of data, can be used to see what is happening, as well as anticipate the near future.
"It is important to remember that what is happening in Miami, Atlanta or San Diego may not reflect current market conditions in Charleston," he wrote in the first report. "The Charleston real estate market is holding up much better than the rest of the country, but there are certain areas showing weakness."
The report uses sources such the Federal Reserve, Census Bureau, Real Estate Center at Texas A&M and Charleston Trident Multiple Listing Service and includes housing trends in relation to the stock market's ups and downs. Rundbaken also included links to more than 40 national and local Web sites.
"Just like the stock market, real estate markets have their own cycles, which are influenced by local, regional, national and global economics and events," Rundbaken said. "The first thing to understand about real estate is that people generally tend to 'follow the crowd.' The second is that many people believe whatever the existing trend is; that trend will continue in the same manner in the future without changing. This type of thinking could cost you thousands of dollars in the real estate market if you do not educate yourself before you buy or sell your next property," he said.
Rundbaken cited findings affecting the Charleston market. Two "primary" economic indicators, existing home sales and new building permits, are moving in a favorable direction. But they are "close to reversing to unfavorable."
Middle and lagging indicators, including inventory, foreclosures and interest rates, are unfavorable, he said. On a national level, the 30-year, fixed-interest rate is 1 percentage point above the same period a year ago.
Home sales in this area are off 10.5 percent from last year, the sales price is up 9 percent and the current inventory of houses on the market is up 39.5 percent from a year ago.
The report looks at the overall housing market, as well as a separate breakout for condos and townhomes. He noted residential inventory has more than doubled on Daniel Island, Folly Beach, James Island, Edisto Beach and Mount Pleasant since last year.
Dorchester County has the greatest building-permit activity in the second quarter, as well as the most foreclosures in the tri-county at 110.
For the country, "We are not so much a housing bubble as a lending bubble," he said. "Many lenders are involved in high-risk financing scenarios with borrowers when they push high-risk loans and do not expect loan defaults when the market turns ugly," he said. "My main worry for the local real estate market here is the possibility of nationwide recession, which could drag down the U.S. real estate market even further."