Homes For Sale Charleston SC: The National Market
If you are searching for homes for sale Charleston SC, it is important to know the market numbers and how they could impact you.
Today I am looking at the latest Home Price Expectation Survey from the National Association Of Realtors (NAR).
This is a quarterly report from a nationwide panel of about 100 economists, real estate experts and investment & market strategists.
Based on available data and trends these experts try to project what is in store for future home values.
First, let’s put the projections into a historical perspective. The graph below shows the historic “normal” average rate of appreciation in the 13 years leading up to the real estate bubble.
It then shows the appreciation rate during the bubble years, as well as during the bust. The last figure shows how the real estate market has rebounded in the years since hitting bottom.
The appreciation projections are shown year by year, through the next 5 years (to 2019).
The projections are the mean projection of the panel–exactly the halfway point.
Half projected higher numbers, half projected lower numbers.
In this latest report, the panel is projecting that we will see a 4.3% increase in home values for 2015.
The appreciation rate is projected to slow down in 2016, and then level off closer to a historically normal level of appreciation through 2019.
Keep in mind that although the rate of appreciation is projected to slow down, that does not mean home values won’t continue to appreciate.
The rate at which they appreciate will decrease, but homes will still be appreciating.
The next graph shows the overall projected mean appreciation for home values through 2019. That is, all years combined.
It also breaks down the cumulative projected appreciation by the bulls (the most optimistic quarter of the panel) and the cumulative projected appreciation by the bears (the most pessimistic quarter of the panel).
It is interesting to note the most conservative members of this expert panel still project home values to increase by nearly 12%.
So far in 2015, home values have been appreciating at a rate faster than what is projected for the entire year. Here is a look at year-over-year home value appreciation rates, broken down by month:
Part of what is driving home values up so rapidly is the lack of inventory.
There is very strong buyer demand that has been there since the New Year started.
Traditionally, buyers usually don’t come out until Spring.
For 2015, they’ve been out since before the beginning of the year.
The market got caught a little off guard. Inventory (or the lack of) was already an issue, but this big surge in demand further strained the market.
In simple terms, demand has exceeded supply and when that happens, prices go up.
2013 and 2014 saw double digit increases in home appreciation rates. This was great and helped the housing market recover.
Then, as 2014 progressed, we saw appreciation rates slow down into the 4% range.
Keep in mind the historic norm for appreciation has been in the 3%-4% range. So, this was actually good news.
As the bubble taught us, double digit appreciation cannot be maintained for too long without a correction.
However, in 2015 the high buyer demand has caused home values to accelerate.
This wouldn’t be too much a problem, but wage increases have lagged well behind home value increases.
This is putting a squeeze on buyers in many markets, and could price many buyers out of the market.
This is something we have to keep an eye on going forward. However, one thing that is not happening is another bubble. I cover this topic in greater detail in this post.
Homes For Sale Charleston SC: The Local Market
So, what is happening for the values of homes for sale Charleston SC? Let’s take a month by month look at the Average Sales Price for the entire Charleston MLS:
The Average Sales Price for Charleston SC homes in May was $322,536. That is the highest Average Sales Price since June 2007 ($323,030).
If you look at the yearly changes in Charleston home values, you see that the Average Sales Price for Charleston has been rising at a closer to normal pace.
Of course, this varies from one city to the next, but overall the pace has been closer to the historic norms.
2013 saw the Average Sales Price increase from $261,821 to $279,158. That is a 6.6% increase.
2014 saw the Average Sales Price increase to $290,392, an increase of 4.02%.
So far in 2015 the Average Sales Price is $301,638, which is a 3.87% increase over 2014.
Inventory remains a challenge for Charleston, and that has driven prices up.
We are entering the selling season in Charleston, so perhaps inventory will catch up as more home owners put their home on the market.
Here is a look at new listings to hit the Charleston SC real estate market so far in 2015:
By the looks of things, the number of new listings is actually dropping at a time of the year it should be on the upswing.
Hopefully, with news of continued strong buyer demand and home values skyrocketing, more home owners will decide to list their homes.
Although inventory remains a challenge, I still think good things are ahead for the Charleston SC real estate market.
We have a strong economy, and that is just one thing that is attracting so many people to move to the Charleston area.
So, demand for houses should continue into the next few years. The national outlook is strong, and there is no reason to think that Charleston won’t remain a strong market for the next few years.
If you are searching for homes for sale Charleston SC, then bee sure to visit my Pam Marshall Realtor website for your one stop shop internet home search.