Charleston, SC Posts

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When's the real estate hangover going to end? Why is it taking so long?

Check out How's Your Real Estate Hangover blog if you forgot what the party was like and why you have a  hangover.

You finally decide to face the music and wake up to face the ugly real estate hangover.  You have a splitting headache, dry mouth, and would really just prefer to stay in bed.  You drink gallons of water and take several aspirin and the headache is not going away. You want to scream, but you're afraid your head will split in half, so silently you scream, When is this hangover going to end?!   It's hard on everyone that came to the party. The banks lent too much money. Buyers bought too much house or got ARM financing that is about to reset. Those now sellers that bought at the peak feel like they are underwater and can't compete with the increasing inventory and builders trying to unload product. hangover

There really isn't an easy answer.  Hangovers last longer for some people as we all know.  Everyone is different just like every market is different.  But as one of our company leaders noted, a look closer at the many different factors, will reveal that we can say it's not over. Some think that we are just around the corner, but a reality check says otherwise.  Now, please note that I am not a pessimist. In fact, I'm probably guiltier of being too optimistic, but in times like these, it's time to be a realist.  I hope that the end is closer, but it's time to prepare for the worst.  It could be more like 12-18 months before we see a turn around.  First, the brunt of bank foreclosures may not have come to fruition yet.  It's a long legal process and it may be another 6-9 months before the mass inventory of foreclosures is really seen. This will put more inventory on the market at discount prices.  Second, there will be many more ARM resets in the months ahead for those buyers that bought at the peak of 2005 that could further lead to more inventory on the market as homeowners decide to get out of the loan by selling.  Third, a phenomenon we have never seen before is happening.  The walk away mentality.  Homeowners in fight or flight mode are walking away from their home and loan obligations without remorse.  I don't think we can pinpoint a time in history where this phenomenon occurred so much. 

Let's face it. The hangover is due to a HUGE IMBALANCE in our market today and in the past few years as building got out of control.  The imbalance is due not only in home values and home inventory, but also in lending practices and guidelines.  The pendulum has swung from one end and now to the other.  We need a healthy balance in order to return to equilibrium.  I think this is in the works.  As an agent, I do not create the market, but my job is to help buyers and seller respond to it.  With proper pricing (which may below the last sale and eat into part of your equity), excellent condition (meaning we may have to make some improvements) and the greatest marketing exposure possible (I'll handle this part for you), we can see the closing table.  The Charleston Relocation Expert has served over 150 families since 2004.  So far in 2008, I have assisted 35 families achieve their real estate goals. Allow me to be of service to you.

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Contact Michele Reneau, Realtor®, CRS, GRI, ABR, Carolina One Real Estate. Licensed Realtor® in South Carolina at 843-572-0518 to list your property for sale or to purchase a property in Charleston, Goose Creek, Summerville, North Charleston, Hanahan, Mount Pleasant and the surrounding areas in Charleston County, Berkeley County or Dorchester County, South Carolina. The Charleston Relocation Expert specializes in military relocation, first time homebuyers and creating marketing exposure to sell your home.  I can also be contacted by email at mreneau@carolinaone.com. To view all Charleston Metro area Homes for Sale Click Here and then click on Search for Homes.  With over 25 years of Lowcountry Living, I know the Charleston Metro area. I will help you get your home sold and/or help you buy your Charleston home or land.

P.S. If you are listing your home and need a quick sale in Charleston or surrounding area, make sure you hire an agent with the knowledge of the market and stats and the experience to get the job done.  I'll provide you with "Questions you should ask ANY agent before hiring" and share my my 100+ point marketing system.  Call me at 843-572-0518 to find out more selling your home in the Charleston SC Real Estate market. You can also view my newsletter by clicking here with the latest market stats updated on the 5th of each month.

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Michele Reneau, ABR, GRI, CRS

www.CharlestonRelocationExperts.com

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Comment balloon 9 commentsMichele Reneau • September 14 2008 12:59PM

Comments

I have a serious question about what I think is related to a property tax gouging sitiation in Ocala Florida. With the recent decline in property values the property assessment value has not followed suit. Why are local officials allowed to assess a property that does not reflect its actual value? I have had 3 quarter acre lots for sale for over six months for 45,000.00 without any offers. I spoke with my real estate agent and have been advised to lower the asking price to 15,000.00. The area in question is Rainbow Park in Marion County. Recent sales in 2007 have been 18,000.00 for a 3 quarter acre parcel and 5,000.00 for quarter acre lots. The Marion County Taxing Authority has  assessed my property at 54,824.00. Everyone across this country knows about the real estate bubble that has lost and is continuing to lose air. The Government is currently on the news asking about reporting about gas price gouging but where are they asking about the property tax gouging that is plainly going on at this time? The Marion County Tax Authority was quick to raise the assessed value during the realestate boom but are not lowering the assessed value in the same fashion. Is this not as criminal as gas price gouging?

               Thank You   Ron Morrisette

Posted by Ron Morrisette about 10 years ago

Michele

Hang in there. You may want to read this post about being productive even in a down market - see http://activerain.com/blogsview/687075/Real-Estate-Trends-5

 

Posted by Stefan Swanepoel (New York Times Bestselling Author & International Speaker) about 10 years ago

Michele, I too have wondered the same thing lately. Hang in there!

Posted by Sherie Earley-Womack (Choice Real Estate) about 10 years ago

Hi Ron, I'm not familiar with your tax authorities, but in our area, we are able to contest tax values to our County assessor.  I agree that as the market has soften, taxes sure haven't.   It may be worth a look to see if they have a system for doing this.  You raise a good point.  Taxes here are assessed every 10 years but whenever a property is purchase, the tax assessment is also done based on the purchase price.  Best wishes.

Stefan-Thanks for the link. I'll check it out.  In the last two years considered down markets, I'd actually had my best years ever.  It's just harder than before.  In 2007, I personally closed 51 transactions.  I had to take on a buyer's agent as a result.  This year so far, we have closed 35 transactions so I think business will be about the same as last year.  I'm always looking for more ways to be productive.

Sherie-Hopefully, it won't be too long.

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) about 10 years ago

It seems that the market isn't done weeding out those who don't belong.

Posted by Cameron Novak, Featured Corona Real Estate Agent Team (The Homefinding Center) about 10 years ago

So funny Michelle....really....what was started because of a lot of media negative hype has now escalated to the closing of banks and now a lot of wall street firms.  So dumb....now there's actually a problem.  Add Fannie and Freddie to the mix.  I am ready for the hangover to be done.  Couldn't be a better time for homeowners to buy homes.....awesome really.  The hangover is gone for those who really want it to be done.

Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) about 10 years ago

Billy-  You summed it up! American consumerism is very much tied up in this cycle. As soon as consumer confidence returns, the market will also.

Camerson-You're right about that. At the peak of the market, there were 6200 realtors in my market.  Currently there are 5800.  But only 3965 realtors completed a transaction in 2007 and only 2949 realtors in 2008 have been involved in a transaction. 

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) about 10 years ago

Michele, you hit it on the head with this one too!

It is going to take some time to get past our current market. Because of all the loose lending that took place and the buyers who over-extended themselves we are going to be in a correction period until the error of their ways has been set right again.

I liken the mess we're in to working out to lose some weight. It's going to take a while to start seeing an results. We can't expect for the weight to just come off after exercising for a week when the weight took YEARS to pile on. Results are not instant with weight lose and like-wise with real estate, the extra weight we are carrying will not go away overnight. It's going to take some serious work to get back to the lean shape we want to be in!

Again, thanks for sharing and best of luck during these uncertain times!

Kind Regards, Nicole Weidauer

The Egerer & Weidauer Team, Keller Williams Realty North Seattle

Posted by Nicole Weidauer (Keller Williams Greater Seattle) about 10 years ago

Nicole-Thanks for the diet analogy. I think it's a good one too! 

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) about 10 years ago

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