Living and Working in Charleston SC

Sales Units for October were at their lowest level since January 2004, but inventory levels are double at about 12 months, versus 6 months in January 2004.  I’m not going to go back and do the research to find the answer…it’s bad.  Less than 850 agents had a sale in October, (out of about 4500), and 300 of those more than one.  (its takes at least 2/mo to have a viable business)  My business is way down in spite of our web presence.  Many of you with whom I am in contact are having difficult selling your homes.  Therefore, you can’t come here and work with me to find your home here in Charleston. 

The saddest news is for homeowners that bought at the peak, which was June 2005.  Prices are finally dropping a bit, and sellers that need to sell becuase of a job change, divorce, etc. are feeling the pinch.  Real Estate companies are advertising that this is a great time to buy.  I guess if you represent a lot of sellers, you owe it to them to present things in the best light.  I happen to think the public is smart enough to see through the smoke and mirrors.  While I’m not happy about what it’s doing to  my income, I’d rather deal with that, than have my buyer clients come up short.  Consequently, I’ve taken on some management consulting work for some small businesses and am very pleased to have it. 

Sorry to be the bearer of bad news.  I simply refuse to spin it.  It’s going to get better; and I’m not one to speculate when.  Others are saying spring of 2009.  So, if you want to get in now knowing that it might get a little worse before it gets better, you’ll be taking a risk.  Wise investment has a lot to do with managing risk.  If my son was taking a job in Charleston right now, and he was going to be here for awhile, I’d say rent for six months and see if inventories are continuing to rise.  If you’d like to know precisely when the inventory and sales trend changes, stay tuned to www.allthingscharleston.com.   

The conditions have been right for home sale prices to drop for some time with inventory levels continuing to increase. Yet, month after month, average home sales prices Charleston wide have continued to increase.  The average sale price finally dropped in September. (see below)  We saw a similar drop in July, and then back to an increase in August so we still don’t know for sure that we have a trend.  October is another month.  You can drill down into just about any part of town, even to the subdivision level, and prices have been increasing…in spite of increasing inventory levels. 

Charleston is a great place to live.  We have weather to die for with four seasons, lot’s of things to do for all ages, good schools.  Cara and I have lived and worked in this area for 15 years.  After living here for 10 years, we moved to Georgia in 2002-2004 and moved back.  If you aren’t already sold on Charleston, you simply haven’t spent enough time here.  If you’re already sold on Charleston, and are planning your move, the timing is right.  It could get better possibly.  Who can tell?  I definately don’t subscribe to using market timing for investing in real estate.  What you want to avoid is a “bubble” situation.  There simply isn’t any evidence that suggests that we have that sort of thing here in Charleston.  We don’t have any one industry like oil or technology that dominates our economy.  There are a lot of people that still want to move here, and if anything is slowing things down, it’s that they’re having difficult selling their homes where they are now. 

It’s certainly getting more difficult to buy a home now.  100% financing with moderate credit scores are going to go away.  That will definately affect the number of buyers out there. 

Sales and Inventory History

Monday, October 08, 2007
Category - Residential

Let us know your thoughts.  It will be very interesting to see what happens to the supply of buyers out there. 

 The answer is as usual, it depends??  If you’re a first time home buyer looking to buy in Mt. Pleasant, and you have control over your timing, you might benefit by waiting.  Prices are more likely to drop than they are to go up in my opinion.  But we’ll definately know more in six months.  And you have little to lose by waiting. 

If you’re moving to the area, or for some reason, don’t have this kind of control, I think the timing is good for you.  You should be able to get a better deal than two years ago when multiple contracts were very frequent occurences.  Prices might go a little lower by the end of the year, but so far, they’re holding fairly strong.  The reason why I’m saying to first time home buyers that they might be better off waiting, is more because we’ll know more in six months than we do know…not that prices are definately going down.  So, if you are buying right now, feel good about your situation.  Charleston is still a hot destination.  Every year can’t be as hot as 2005, and 2006 was an excellent year as well.  So still, things are more returing to normal in Charleston.  Make sure you have a good agent representing you, and you should be able to BOTH find the best choices and get a good deal.  It’s possible prices will drop slightly before going back up.  In 2005, if your home in Mt. Pleasant was in a so-so location, or didn’t have great curb appeal, you could still get close to asking price, because buyers didn’t have very much from which to choose. 

Almost everyone makes some sort of trade-offs when buying a home.  If you’re buying now, you have great selection and you have a much better chance of getting all or most of your “nice-to-haves” satisfied versus 2005, when buyers may have been compromising “must haves” both because of the scant selection, and because they had to act so fast to avoid having to compete with another buyer. 

Judge for yourself. 

Sales and Inventory History

Monday, June 25, 2007
Category - Residential / Area: 41, 42

Does anyone remember Hurricane Andrew?  http://en.wikipedia.org/wiki/Hurricane_Andrew Provides a concise summary.  In 1992, I was a territory manager for Senco Products, a major manufacturer of automatic nailing and stapling products.  The reason I bring up Hurrican Andrew, is that prior to this hurricane, the building codes for nail specifications, and other fasteners to address wind uplift forces went largely ignored. 

 This past week, I attended a pre-drywall inspection, and a final inspection for two different brand new homes built by Centex.  For the record, there are two reasons why you see so many positive reports on my blog about Centex.  One, the inspections I’ve intended, of both brand new, and used homes; and positive reports from my clients.  And two, their superior JD Power ratings.  I could actually make a lot more money selling other brands who offer huge selling bonuses.  D. R. Horton for one offers DOUBLE commissions of 6% for selling their homes.  Kind of makes you wonder about a few things, but that’s not the subject of this article.  Beazer has a volume plan where you can work your way up to 4 1/2%.  Centex offers 3% and no extra bonuses no matter how many you sell…for the record. 

 Anyway, since Andrew, inspectors pay much more attention to the types of nails, nailing patterns, and the connectors used to fasten the home down to the foundation.  After Andrew, a lot of people caught hell, and building inspectors topped the list.  Even though the newer codes were virtually indiscernable by anyone but an engineer, especially with regard to “hurricane ties”  If you look at a new home built today, you’ll see that from the roof trusses, all the down to the sill plates, are fastened together by some type of metal strap.  Short of  tornado, or a direct hit by a cat 5 hurricane, they aren’t going anywhere.  

 That doesn’t mean that new home builders are perfect.  The people that oversee the construction have too many homes to supervise, typically around 20, assigned to them.  So you need to hire your own inspector, and negotiate with the builder so that things get completed in a reasonable time frame.  I am biased of course, but I highly recommend having a real estate agent on your side of the table to help out as well.  Consider it free insurance.  Just make sure your agent is actually your agent, and not a salesperson pretending to be an agent. 

On the finished home, most of the drywall work was great.  Two joints in the living room needed to be re-floated, and two other joints needed to be cut out and reworked.  Must have been a bad day or the end of the day for the dry waller, because the rest of the house looked great. 

On the pre-drywall inspection, the walk-out door was on the wrong side of the garage…whoops.  That will be fixed.  And there was about a four inch piece of OSB near the top of the roof line with a couple of pieces busted out.  Apparently, the code doesn’t specify the width of the last piece near the end of the roof sheating.  I’m not a code expert…so I can’t really evaluate that from an expert standpoint.  Seemed pretty hokey to me.  But those were the only things we could find.  Myself, a certified inspector and the buyer. 

I learned this week that the site supervisors are incented based on thier J. D. Power Survey results.  If they don’t average a 9.3 or better, they miss out on a significant bonus.  Sounds like a good plan.  They stay in touch with the customers and do everything they can to make them happy.  

I’ve heard people say that because of the way they grow trees now, that older lumber is more structurally sound and that is probably true.  It remains to be seen how well the vinyl siding will hold up after 30 years in our sun and rain.  They were using Cedar in the 80’s, and without flawless maintenance, they need to be resided because it rots in the humidity.  Brick is an extra $20,000, a great investment.  And cement plank siding is great, my favorite actually.  It’s not inexpensive, almost as much as brick, but it looks great, and is proven to last.  It does require caulking to prevent leaking. 

In Charleston, I feel great about recommending Centex, Brentwood, Harbor, and Weiland built homes.  If you need help comparing builders and communities, please feel free to contact me.  843-991-5184. 

A lot of people want a home in a downtown area where they can walk to shopping, restaurants etc., and downtown Charleston is way out of reach, but for the very few.  Park Circle is the up and coming area in Charleston, they call it “transitional”.  I’ll be going out this week to preview homes and reporting back to you on what I find.  You should know that there are a lot more homes over $200,000 than under.  So if you’re looking for that ideal investment property for $160,000 that will rent for $1100/month and cash flow, it might be too late.  Let’s see what we find out. 

Keep your eye on the new shopping and living space near the new West Ashley Wal Mart, and Centex’s Carolina Bay Development.  The product isn’t finished yet, but if you’re kicking yourself for missing out on the Daniel Island boom, this might be your chance to score big.  July 6, 2006, the Post and Courier featured “West Ashley’s Downtown”.  The planning doesn’t seem as controlled as Daniel Island, so I’ll be surprised if they achieve the same planned feel and result, but it will be a huge improvement over the typical sprawl we’re seeing in South Carolina. 

One of the biggest reasons I think people pay the premium for Mt. Pleasant and Daniel Island is the better planning.  Especially Daniel Island and I’on.  Some people object to the artificial downtown feel, saying they feel like they’re in Disney World.  But, presentation and aesthetics are important to people, and something gets lost when you have to drive by unsightly commercial structures, strip malls, and even mobile homes, on your drive home.  I get emails all the time from people who want to spend less than $400,000, and want to be able to walk to shopping and entertainment.  Good luck finding that in downtown Charleston, unless you can cram into 500 sqft, or don’t mind bullets wizzing past you from time to time.  You can’t find much of anything in Downtown Summerville for under $400k, other than maybe a tiny cottage ridden with termites.  My most recent search downtown, a couple was looking for a nice townhome with parking.  They wanted to stay around $600k, and what we found was just pretty dissappointing.  We were able to find one option, finally, and only one. 

 So, if you want to be able to walk to dining and entertainment.  Or stroll down to the coffee shop to read your paper, Carolina Bay could be just the thing.  There are townhomes in the area as well if that’s your cup of tea.  But keep your eye on this gem.  I think the end product is going to work.  Centex’s Essex series starts at $330k for a 3 bed 2.5 bath home with 1537 square feet. That includes a standard one car detached garage.  The two car garage is available but it is an upgrade.    They also offer “drive-under” floor plans for those of you that prefer elevated construction, and of course they have there own pricing.  The “Plantation Series” are all Carolina Style Homes featuring detached garages, various porches, and Charleston Single Style homes.  If you’re looking for something where you’re going to be assured of good resale, curb appeal is everything, and these homes pop from the time you drive up. 

In case you’re wondering, I have no agenda to get you to buy Centex, other than I like it when things are easy, because easy is good.  I’ve worked with other builders, and heard many stories where working with the builder was un-imaginably difficult.  I’ve read hundreds of inspection reports on homes built by a variety of builders, and Centex homes have fewer issues than most.  You can read my other articles on new construction in the archives.  I’m working on one Centex home right now, and the builder contact is doing a remarkable job. 

I’m giving away all my good stuff here and making it easier for you to make a choice, so please consider hiring me when it comes time to making a purchase.  Site agents are usually great, but if you want to make the best decisions, then you need to compare all the different options out there.  I can help you do that. 

Summerville, Goose Creek, Hanahan, and

Dorchester County North Charleston Market Update

The place where you’ll find the most affordable homes where the schools are decent we call “The North Area”.  I have clients in the West and East areas, but more are in the North area because of buyer preferences.  Most people either need, or prefer to have more space, which you get when you choose The North Area, versus being closer to town and the beach, which you get with the West of East.  The West Area   New construction still rules in May, with 25% of closings so far being brand new 46 out of 183 closings.  So, if many of you are wondering why your homes aren’t selling, ask your listing agent what percentage homes in your area are newer than 5 years, or brand new.  I’d be surprised if the trend in your area would be much different than it is here in the North area of Charleston. 

 There will likely be a lot of closings next week, as there always are at the end of the month.  So look at it like noon on election day.  We’re looking for trends here, so what we share today should hold true after all the numbers are in. 

 JUNE 14, UPDATE!!!

Sales and Inventory History

Thursday, June 14, 2007
Category - Residential / Area: 61, 62, 63, 64, 71, 72, 73, 74

Thursday, May 24, 2007
Category - Residential / Area: 61, 62, 63, 64, 71, 72, 73, 74

There is a very interesting disparity between the North Area and the rest of Charleston.  Look at the April inventory numbers.  They aren’t very much higher than last year.  Compare that with the total area, which is showing over 10,000 homes for sale, or nearly double last year.  Homes in The North Area are moving.  I’m a little concerned about owners of older homes, especially in the 1990-2002 range.  Homes older than that tend to be a bit more textured, and on older lots.  So fixing them up will result in a very marketable end product.  Newer old homes, on the other hand, are just as expensive to bring up to date, and when you’re done, you’re still in a neighborhood where the homes are slammed in next to one another.  What’s my point?  My point is, that you need to know your product, compared to the product with which you’re competing.  If you’re buying, you have a bit of an advantage, because you are out looking at all the competing homes.  Hopefully, you’re working with an agent that helps you make the best decisions based on all the important factors, not just selling to your feelings. 

Anyway, let’s get back on track.  The North Area is not experiencing the same problems as the rest of the area.  Which begs the question, what’s going on in these other areas.  Talk you your agent.  If you’ve hired the right one, they should be able to help you research the market in which you’re looking.  If you want to be close to Whole Foods and the beach, and you’re willing to pay the premium to live in Mt. Pleasant, the come up with a strategy to take advantage of the buyers market there.  There are different kinds of sellers.  Some people HAVE to sell their homes to move on with the next chapter of their lives.  If you and your agent can sniff them out, you can start out in a good position financially. 

Each of the different areas has their pro’s and con’s.  If you’d like to have a candid discussion about the communities you’re considering, please don’t hesitate to call.  We’re here to help.