We own 4 properties now. We just sold one in January. We listed in November and sold in 75 days. We spruced it up, had it staged and got 98.7% of list price. Property does sell when it's priced right and staged. I kinda felt like I had to prove it to myself. But I did it and yeah it cost some money to do it, but it was worth not paying a mortgage on a vacant house for 6 or 9 months. Spend just a little money up front and get it sold and the money will be saved from not making unncessary mortgage payments! We are selling off some of our properties to get a little cash to make another purchase. Our dream house...the house we'll be in for the next 20 years. The house I will hopefully raise children in. It's such an amazing time to buy. Our dream neighborhood(s)' prices have come down so much that I can hardly stand it.
I was able to help one of my tenants get their dream starter home ($125K) and they close in 2 weeks. Even better than them getting their dream house is that it appraised for $7,000 more than what they paid for it! That's 6% equity upfront. In our market, 6-7% equity is great because that's about what it would cost to sell so they could break even right now if they had to put it back on the market. They put 3% down so they are well on their way to building great equity. I'm so excited for them!! This is why I love my job. We're going to put that rental house on the market too with plans for a quick sale! With that money along with other monies we've saved, we'll be able to move forward on the next house and get a fabulous deal because of how low the prices are.
I can understand that buyers are on the sidelines looking for the right deal. But I think the waiting might be more attributed to the fear of risk.
You see, when you buy, you get to choose where you want to live, what you want to live in and how much you will anty up for it. Now, I don't think I'll go get $50K more off the price of these homes, maybe $10K, but the fact is that they are listed or at least some of them are listed well below what they would have been listed for 3 years ago. The market will bounce back and in Charleston, it's going to be sooner than most think. By the time it bounces back, prices will be on the rise and it'll be too late for buyers looking for a "bargain."
Plus as you pay down the mortgage, you are building equity! While you are paying it down, you get a HUGE subsidy from the government in the form of tax relief. Now, I'm still a fan of getting rid of that mortgage so you aren't paying interest to a bank, but at least in the mean time, you do have some benefit unlike paying rent.
As a renter, you don't get any of these things. Don't get me wrong, there is a time to rent. And I love my tenants! I have built some great equity in my rentals while others have made the mortgage payments. However, the American Dream is to own your white picket fence around your 3 Bedroom house, not your landlord's house. When the time is right, it's time to move forward. If you are waiting to buy, you are missing out on the rewards! Call the Charleston Relocation Expert for a FREE consultation to see if you are ready to start the American Dream.
Michele Reneau, ABR, GRI, CRS
www.CharlestonRelocationExperts.com
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I was in Spartanburg this week end, at a party, and ran into a local real estate agent. She was well aware of the excesses of the Charleston market. Her take was that our market has a way to go before prices get in line with reality. So folks, don't jump in too soon.
I guess some people can only see the glass half empty. Our team helped 58 families achieve homeownership goals last year. With less than 15% of Charleston real estate agents completing 12 or more transactions last year, it's easy to see the glass half empty.
We sold our 1400 sqft 3 BR house in Mt Pleasant in 2005 for $289K and right now, we are looking to repurchase a 2400 sqft 5 BR house in the same neighborhood under $325K. I'd say prices have come down a good bit and given that you can't buy a 5 BR house in an equivalent neighborhood within a 5 mile radius of the beach or downtown, reality is here.
There are about 11,000 properties on the market with an average price of $527K and there are only 3600 homes under $300K which is the about the median home price in our area. In April 2008, 746 properties sold in the Charleston MLS. At the median price of $288K, that means that there is only a 5 month supply of homes for the most popular price points. Those are good odds. Granted that still leaves a lot of choices for buyers, but that is the benefit of an oversupply. It's much better than the hay day of 2003-2005 where buyers had 2 seconds to write an offer or the house would be gone.
Mic..
I have been hearing a lot of positive PR from real estate folk for months - when are we going to get the unvarnished truth? Local market is still overpriced and young folks are going west (Summerville etc.).
It's hard to compare Summerville to Mt Pleasant because you are talking about 2 different locations and in real estate price is determined a lot by location, location and location. Of course, prices are going to be more expensive in Mt Pleasant since it close to the beach and downtown Charleston, not to mention, shopping, great restaurants, and overall asthetic appeal. Comparing Mt Pleasant to Summerville makes it look more affordable which it is but I don't believe we are comparing apples to applies. Before considering a move back to Mt Pleasant, we looked at several neighborhoods in the North Area that we would have elected to live in (Coosaw Creek, Ashborough East, Cedar Grove) but for houses in our price range, we still felt we would have to put $50K or more to update the property on top of spending $300-350K+ so for us, it makes sense to consider Mt Pleasant for the same or less money when you figure in the cost of work needed and that we would be close to the things we enjoy doing the most in addition to my husband's job. It doesn't matter so much for me so I spend so much time driving anyways.
For many buyers, location is important and so each person's lifestyle will dictate what is important (i.e. location to work, school, recreation, price, etc). I've had many folks that live out passed exit 199 call me to say that want to move closer back to town and that the price wasn't worth the move that far out, spending more money in gas, time with traffic, etc. I think as gas becomes more expensive, living close to work will become a higher priority. By the time you figure the cost of gas, you can save money by living closer to work and put the money in your home instead of the car.
Even Summerville prices have come down. Overall with properties we have sold in the last 12 months in the North area, they were priced significantly lower than what they would have sold for in 2005, in one case $35K lower in Ladson. Not all are so dramatic. Mt Pleasant is actually the only market that has experienced depreciation in the last 2 years. We have seen a lot of the recorrection in the $200K or less market in the North area and under $400K in Mt Pleasant. There are still some unreasonable sellers but there always have been and always will be. Buyers are more discriminating and I always encourage my clients to consider all factors when buying including resale, where the market has been and where it may or may not go. It's important to stress that no one has a crystal ball. Real estate is still a great long term investment when you look at the numbers over any 5-10 year period. The problem with the mindset of some folks is that expect to make a profit in 2-3 years and that is not historically normal. Trust me, I'm not happy about the last 2 years on one of my properties. The builder has sold it for $15K less than we paid for it, not to mention the $20K we put into it to add hardwood floors, granite, etc. But I'm not afraid to rent it out and hold onto it until the recorrection finishes in that area while taking advantage of someone else paying down my mortgage for me. There is a time to rent for everyone.
There are many properties that will be hurt namely more expensive properties above $350K (less affordable to the median income for our area) and there is still plenty of room here for recorrection in my humble opinion; and in smaller properties that are calling for significantly more per sqft i.e. newer construction neighborhoods where the larger homes have brought the values down, mostly due to builders and other fire sales. Let's face it, there are some properties that may reach their peak value for a long time i.e. a newer 1250 sqft house may not be worth more than $155K for a while depending on the location. The unvarished truth is that real estate is local and that means that IT IS different in different areas even if it is just across the bridge.
As a long-term renter and someone whom keeps her eyes on the market searching for the right deal, I believe the time has come. I have not seen home prices like this in 5 or more years and have noticed more "Under Contract" signs then in the prior 2 years.
The other factor may be that next year will be a new Presidency and with that will come a renewed consumer confidence and a new resurgence in home prices.