Charleston South Carolina Homes For Sale: A Look At The National Market
If you are searching for Charleston South Carolina homes for sale, it is important to know what is going on in the market.
An educated buyer is a smart buyer, and knowing the market numbers will help you to make a better offer that is more likely to be accepted by the seller.
In today’s post I am looking at the latest national numbers, and in my next post I will look at what is happening in Charleston.
If you would like more specific numbers to a particular area of town (such as Mt Pleasant, Goose Creek, Summerville, etc.) or even a specific neighborhood, simply contact me and I can share with you the latest numbers.
You can also visit my Pam Marshall Realtor website and visit my Real Estate stats pages–these pages have the latest MLS data for each city in the greater Charleston MLS.
This isn’t too surprising considering we are in the Summer season, when we typically see home sales increase.
Summer is also when we typically see the peak months for home sales.
Here is another look at the year-over-year increase of home sales, broken down by region:
Home sales continue to rise–but will they continue?
It looks as though they will, at least for the near future.
Buyer demand remains strong, and the next couple of slides show that.
Both of these metrics are good indicators of future sales.
First up, a look at the Pending Home Sales:
While they only increased in May by 0.9%, May was the highest number of Pending Home Sales in 9 years.
Pretty much each month of 2015 has seen Pending Home Sales hit 9 year highs.
Another indicator of future sales in Foot Traffic. This measures the number of people out looking at homes. Here is the latest numbers for Foot Traffic:
Over the last 6 months those numbers have been very strong, and by this graph you can see that there are still a lot of people out shopping for homes.
So, with sales looking at remaining strong, what about home values?
Home values continue to rise. Here is the latest look at national home values:
Home values slowed down slightly in May. This is not in comparison to April–this is a year-over-year comparison.
As you can see by the graph, home values appreciated at a much faster pace early in 2014.
Then that pace started to slow down, but began accelerating again so far in 2015.
It is important to note that across this graph, home values are still appreciating.
This does not show depreciation. Rather, the rate at which home values are increasing slowed down heading into 2015.
The reason home values began accelerating at a faster pace in 2015 was the fact that buyer demand was strong and inventory wasn’t sufficient to meet that demand.
This drove home values up at a faster pace.
The fact that May saw a decrease in the year-over-year numbers is actually encouraging.
It looks like we have leveled off, at least for now. Again, this is a good sign.
Historically, home values appreciate an average of 3% to 4% per year.
Double digit appreciation can’t be maintained over too long of a period–see the real estate crash from a few years ago for proof of that.
These latest numbers would indicate that inventory is starting to catch up to demand, thus home values, while still increasing, are appreciating at a closer to normal rate. This kind of growth can be maintained over time.
Speaking of inventory, here is a look at the Months Supply of Inventory nationally:
Although there was a slight drop in May, we are doing much better than we were during the first quarter of 2015.
We are not where we were last year this time, but we are closing the gap.
Ideally, we would like to see these numbers closer to 5.5 to 6 Months Supply. 6 Months Supply is considered a normal real estate market.
This next graph also looks at Inventory, broken down in a year-over-year comparison:
This graph helps explain what has happened in the real estate market so far in 2015.
Inventory wasn’t sufficient to meet buyer demand, so appreciation accelerated.
The good news is in May we saw inventory increase over last May, and that was only the second time that happened so far this year.
This time of the year we see more home owners put their homes on the market. Perhaps many sellers that were on the fence saw home values skyrocketing, and decided it was time to sell.
Builders have also seen the strong demand, and have increased their starts. All of these factors have helped put more homes in the marketplace, and that is a welcome sign.
Right now, home sales and home values look like they will continue to increase. Inventory isn’t quite where we would like it, but it does look like it is improving.
If the gap between inventory and demand continues to narrow, that would add more stability to the market.
Another factor that buyers of Charleston South Carolina homes for sale have to take into consideration is interest rates. Those have been on the rise lately:
Projections had interest rates at a higher level starting earlier in the year, but that didn’t happen.
However, in the last month or so we have seen interest rates creep up above 4%.
Historically speaking, rates are still close to their all time lows.
Rates are expected to increase over the next year. Here is a look at the latest projections from Fannie Mae, Freddie Mac, the Mortgage Bankers Association and the National Association of Realtors:
So, based on the average projection, this time next year we could see interest rates increase by three quarters of a percent.
Everyone is keeping an eye on interest rates to see when they increase. Some feel that a rise in the interest rates will cool off buyer demand.
That remains to be seen, and in the recent past that has not happened. I will cover this in greater detail in a future post. But for now, interest rates remain low, and this should keep buyer demand strong.
In fact, with interest rates inevitably on the rise, this is motivating more buyers to buy now, rather than wait.
Stay tuned as I will look at the local Charleston numbers and explain how they affect home buyers.
Bee sure to visit my website, it is a great resource for those looking at Charleston South Carolina homes for sale.