Charleston, SC Posts

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When is the market going to return to normal?

I wish I had a crystal ball to see into the future. What I do know is that real estate is a cycle like all other investments-stocks, bonds, etc. Generally, if you stay put through the lows, you'll come out on top. In the Charleston, SC real estate market last month (June), 1287 properties closed or sold, however, 2700 new homes came on the market in the same month! There are over 10,600 properties listed. At this rate, I believe that it will take 24-36 months for the market to correct. So what's the problem? Why is this happening? In our market, investors accounted for about 33% of property owners. As the cycle started to change, they dumped their property en masse. Along with that dump, an overwhelming number of the 180,000 anticipated permits were approved. Builders haven't slowed down building. Sellers are competing with new construction prices and they lose must of the time. SO WHAT can you do if you are a seller? First, get real. Understand the market and find out what you can do to compete? If have equity, compete on price if you must sell. Also, improve your home. Make sure it is sparkling clean. Give it a fresh paint job. Don't use stark white. Use a neutral color, (taupe, beige) b/c it gives a more high end look. Think about what improvements you can make to entice a buyer and do it...like hardwood floors in the dining. Keep it simple but set your home apart. Offer incentives...closing costs, buy down rates, HOA fees or condo fees paid for a year. These are just some suggestions but most importantly, as a seller, you need to know the cold hard facts about the real estate market. Numbers speak for themselves. Listen to them. On another note, what the Charleston market went through in the last few years is NOT normal and we are now paying the price for the good times.  We are going through a market correction and it is needed in order to return to a healthy market.  Buyers that will not be able to stay in a home for 4-5 years may need to reconsider purchasing or at least be certain to buy at least 7% equity up front to stay ahead of the curve for when they are ready to sell.

Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

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Comment balloon 2 commentsMichele Reneau • September 26 2007 09:47AM

Comments

Michelle,

Thanks for taking the time to "tell it like it is". As you point out the market of the past past few years was not the norm. This correction has caught some investors and short term homeowners off guard and holding too much property with little or declining equity. Similar to the stock market, some investors will sell short while others will hold on, knowing that there will always be another upside.

When? I think we're at or near the bottom and are beginning to stabilize. The jumbo's (+$750K properties) are and will continue to remain stagnant as the mortgage debacle plays out. The national new home builders will continue to build and offer discounted services and products to keep their cash flow engines burning. I see a return to local bankers, who will be receiving more loan applications as business returns to "who you know" instead of "how low can you go" interest rates. 

But I ramble....I just wanted to say great job, glad to see you're on AR. Your experience in our market is an asset to this board.

Best Regards,

Greg

Posted by Greg Flanagan, Charleston Real Estate Expert (Flanagan Home Team ) about 11 years ago
Thanks Greg!
Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) about 11 years ago

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