Who Has the Correct Charleston Real Estate Analysis?

Today, Jim Parker has written an article in the Real Estate section of the Post and Courier regarding different housing market outlooks for Charleston. I have not seen the report produced by Market Opportunitiy Research Enterprises so it is difficult for me to comment on it.

When you look at my quarterly report at www.charlestonmarketreport.com you will notice that none of my main indicators focus on price. What I do is use a Market Matrix to show the differences among homes and condo/townhomes for different areas of Charleston. Just as each local market is different around the country, the various areas that make up the Tri-County are mini markets within themselves. Daniel Island is nothing like North Charleston and Summerville is different from Kiawah/Seabrook.

What I do know is that the data I pull from various sources shows certain areas of Charleston are getting worse as the entire nation struggles with a weak housing market. If you think that home prices are increasing aound Charleston then just open up the classified section of the Post and Courier and count how many "reduced" homes are being advertised. The problem with using an average median home price for Charleston is that is does not take into account incentives given by builders or seller paying closing costs for the buyers. That is why I focus on indicators such as existing home sales, building permits, inventory, and foreclosures.

Either tomorrow or Monday I will coming out with more evidence to back up the data in my report. If anyone would like to challenge the forces of supply and demand I am open to your local Charleston analysis.


Reports differ on area housing market outlook

BY JIM PARKER
The Post and Courier

Just-released housing figures from a North Carolina researcher show shrinking sales and gradually rising values in the Charleston market from July through September. But the findings of a local real estate agent and former appraiser are gloomier.

The Market Opportunity Research Enterprises and Charleston Real Estate reports were released within a week of each other.

According to MORE, based in Rocky Mount, N.C., homeowners and builders sold 5,630 new and existing houses in Berkeley, Dorchester and Charleston counties from July through September. That was a 15.9 percent slide from the 6,696 sales a year ago.

However, prices inched up to an average $296,505 from $291,681 a year before, and the median, or midpoint, cost of $205,000 rose from $199,900 in the same period of 2005, the report found.

By county, Charleston has taken the brunt of the real estate sales downturn. Deals plunged 27.3 percent to 2,834 in the third quarter of 2006 from 3,898 sales a year before. Dorchester County showed a tiny decline to 1,321 sales in the third quarter from 1,356 in the July-through-September period of 2005. And Berkeley County actually posted a year-to-year increase with 1,475 sales in the most recent quarter, up 2.3 percent from 1,442 in the same time last year.
Charleston County continued to lead in home values, with the average price climbing to $376,158 and median price to $255,000 in third quarter 2006 from an average $359,995 and midpoint $241,700 in the same three months of last year. Also posting sizable price hikes were houses in Berkeley County, with an average $221,887 and median $171,000 sale value in the last quarter from a $199,320 average and $159,240 median a year ago, and Dorchester County, rising to a $208,940 average and $187,990 midpoint in the July-through-September quarter this year from a $193,500 average and $173,000 midpoint in 2005.

Separately, the Charleston Real Estate Report for the third quarter found weak indicators in the Charleston area and more of the same for the typically slow, holiday-filled fourth quarter.
Author Brad Rundbaken said the local market is mirroring national trends of slowing sales and rising inventories. He titled the report "Sellers are From Mars and Buyers are From Venus."
"I believe it sums up what is happening in the local Charleston real estate 'mental market' right now," said Rundbaken, agent with the Sandlapper Real Estate Group. "Right now, the entire country is in a housing recession, and many sellers still are pricing their homes as if it were last year's market."

According to the Charleston Trident Multiple Listing Service, existing home sales in the local market are down year to year for the first time since 1995; building permits based on Census Bureau and Real Estate Center at Texas A&M University figures are off for the first time in six years; and inventory rose beginning last July for the first time since 1999.

Foreclosures in the third quarter were up 68 percent from third quarter 2005 (although down from the previous quarter), Rundbaken's report noted.

"Many of the sellers and/or real estate agents pricing homes right now simply have them priced too high for this market. So the main question now is, 'Are we near the bottom of the housing market?' Market experts are calling for different outcomes, which is enough to confuse everyone," he said.

Reach Jim Parker at 937-5542 or jparker@postandcourier.com.