Charleston Homes For Sale: Record Numbers
With recent good news for the housing market, I thought I would take a look at the local numbers for Charleston homes for sale.
The National Association Of Realtors (NAR) recently released their latest numbers for home sales. April actually saw home sales decline, although the numbers were still up year-over-year.
For May, home sales increased by 5.1%. May is the eighth consecutive month we have seen a year-over-year increase in home sales, and are currently 9.2% above May of 2014.
Sales were up in May to a seasonally adjusted annualized rate of 5.35 million, and that is over the upwardly revised rate of 5.09 million in April. May’s sales pace is the highest since November 2009 (5.44 million).
Industry analysts attributed April’s decline in sales to the lack of inventory available to buyers. Inventory remains an issue for the market.
Although inventory levels increased in May by 3.2% from April and are still up year-over-year by 1.8%, the months supply of inventory did drop from 5.2 months in April to 5.1 months in May.
“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers,” he said.
“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation.
Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”
–Lawrence Yun, Chief Economist For NAR
One interesting note about this news is when you look at where we were back in 2009.
At that time, the First Time Home Buyer Tax Credit was set to expire. This was the incentive from Uncle Sam that gave first time home buyers an $8,000 tax credit for buying a home.
Although the Tax Credit would be extended, in November 2009 buyers only knew that it would run out at year’s end. Interestingly enough, the May increase in home sales was partly fueled by first time home buyers.
According to NAR, the percent of home sales purchased by first time home buyers in May was 32%, up from 30% in April. May was the highest percentage since September 2012.
However, those numbers could actually be higher. The AEI’s International Center on Housing Risk has their First Time Buyer Mortgage Share Index in which they look at every loan to determine if it was for a first time buyer. This is likely a more accurate number than NAR’s.
According to their latest Index, in May first time home buyers made up 52.7% of the market.
NAR also announced that the median home price in May increased to $228,700 which is up 7.9% over last May. May 2015 was the 39th consecutive month of year-over-year increases in price.
Charleston Homes For Sale: The Local Numbers
So, nationally home sales continue to rise, home values continue to rise, but inventory is not keeping up with demand. How are Charleston homes for sale doing?
First, let’s take a look at Closed Sales so far in 2015:
The Charleston market almost mirrors the national market. Sales have taken off from the start of the year, and have been on the increase. There was a slight drop in April, but then sales rebounded in May.
May is the highest number of sales of Charleston homes for sale so far in 2015 with 1465 homes sold. The highest month in 2014 was June with 1453.
May is also the highest month for home sales in Charleston since June 2006, which also saw 1465 homes sold.
Next up is a look at Average Sales Price:
The Average Sales Price shot up in May, up to $322,536. That’s above last year’s peak in June, which saw an Average Sales Price of $315,050.
May was the highest Average Sales Price in Charleston since June 2007 at $323,030.
May is also 2.3% above last May. ($288,378 in 2014, $294,997 in 2015).
Finally, here is a look at the Months Supply of Inventory of Charleston homes for sale:
Inventory continues to drop in Charleston. This has been the big obstacle nationally, and it appears to be affecting the Charleston market as well.
Months Supply continued it’s downward trend in May, to 4.5 Months Supply. That’s the lowest level since February 2006 at 4.2 Months Supply.
Nationally, inventory levels increased in April and May, a good sign.
Especially after dropping to dangerous levels at the beginning of the year.
We aren’t where we need to be nationally, but at least it looks like we might be catching up.
In Charleston that is not the case as Months Supply continues downward.
For a normal real estate market, inventory levels need to be around a 6 Months Supply.
Charleston Homes For Sale: What The Numbers Mean
Right now, Charleston is in a seller’s market. That isn’t necessarily a bad thing. Demand is exceeding supply. As a result, home values are being pushed upward at a faster pace.
This is great for the sellers, but tough on buyers. Buyers are facing fewer choices, and many find themselves in multiple offer situations.
This is also what is happening nationally as well.
For Charleston, 2015 looks to be one of the best years for real estate since the bubble. Buyers were out early this year, both nationally and locally.
This may have caught home owners by surprise, as they usually wait until Spring or Summer to list their homes.
We are entering the traditional selling season in Charleston–May through August. These are usually the peak months for real estate numbers in Charleston.
More sellers should be listing. Plus, with home values soaring, this will lead to many home owners coming off the fence and selling.
Charleston continues to be a popular destination, so I don’t see buyer demand slowing down.
The main thing is we need to see the disparity between demand and inventory narrow. Otherwise, home prices (coupled with interest rate increases) could price some potential buyers out of the market.
Nevertheless, things are looking good for the Charleston SC real estate market in 2015.
If you are looking for Charleston homes for sale, then visit your one stop shop on the internet at my Pam Marshall Realtor website.