The tri-county MLS statistics are in for the last 3 months of 2012, and we’ll be doing a series of blogs so that we can focus on several trends that we’re seeing in the Charleston real estate market. First, let’s look at the Charleston real estate market as a whole – in other words, all 3 counties – before we break down these stats by area. The absorption rate for the entire Charleston area is based on a rule that if no homes were to be listed for sale, it would take 5 months for the current inventory of homes to sell (this is known as a sellers’ market). If there is a 5 to 7 month supply of homes for sale, it is a balanced market. A buyers’ market would take 8 to 12 months to sell all of the listed homes. If it takes more than 12 months to sell the inventory, this reflects a slow buyers market.
When we look at the absorption rate for the entire Charleston real estate market, the under $250K price bracket has an absorption rate of 4 months, making it a sellers’ market. The $250-500K is currently a balanced market with 6 months of inventory. In the $500-750K range, there is a 9 month supply of homes for sale, making it a buyers’ market. The statistics show a slow buyers’ market for $750K to $1 million (with an 18 month absorption rate) and also the $1 million plus range (23 month rate).
These trends should come as no surprise for Charleston real estate agents because we work with these buyers and sellers everyday. In my own business, I’m seeing a surge of first time home buyers who fall into the under $250K price range. Most of them have rented previously, and – with no current home to sell – are ready to take advantage of the low interest rates combined with the low home prices we’re seeing in Charleston. Right now, I’m also seeing a wave of buyers who are relocating to the Charleston area. The majority of these buyers have a price range of $200-500K, which means that it all depends on the specific price and area they are considering as to whether they are going to be: competing in a sellers’ market and having to make quicker decisions before their top choice home goes under contract; working in a balanced market which benefits both buyers and sellers; making strong negotiations in a buyers’ market in order to buy a home for a good reduction off the list price; or, if my clients are looking to buy in a stagnant area, I may recommend investing their money in a different section of Charleston simply for better resale value in the future.
In tomorrow’s market update blog, we’ll look at the absorption rate by area so that we can see which Charleston areas are performing the best.