New Houses For Sale In Charleston SC: Market Update
New homes are an important aspect of the current real estate market, so today I am going to look into what is happening nationally as well as locally for new houses for sale in Charleston SC.
The real estate market is hot right now, with home values appreciating rapidly. In fact, home values are close to or have exceeded their previous peaks in most markets.
A big part of what is driving home values upward is the strong buyer demand that is out there.
The other part of the equation is the fact that inventory levels are not meeting that demand.
In fact, levels of new listings nationally are near record lows this past quarter.
Many home owners are either simply not aware of the opportunity that this market presents sellers, or they simply do not know enough to have the confidence to make a move.
Seizing The Opportunity
Home builders, on the other hand, have seen the opportunity in the market and are rushing to meet the demand that exists.
New homes sales in 2017 have exceeded their 2016 levels, with the exception of April:
But existing home sales also took a hit in April:
The reason for the decline in April is not due to lack of demand, rather, it is due to a lack of inventory–even with builders scrambling to build homes, they are still not keeping up with the demand.
According to a recent quote from Trulia’s Chief Economist Ralph McLaughlin, there is still a long way to go for builders to be able to meet that demand:
One factor that is keeping builders behind the demand is the fact that in 2016 they chased the wrong market. Many builders were building for the premium home market, trying to maximize their profits.
But, they quickly realized that the demand existed at the lower end of the market, so they changed their strategy and focused their efforts where the demand is strongest:
Basically, they have identified the “sweet spot” and are attacking that market segment. (In fact, the highest third of the market, the Luxury Homes, is an entirely different market).
New Houses For Sale In Charleston SC
So, what is happening locally?
Here is a look at new home sales in Charleston over the last 3 years:
That line is trending upwards, similar to the national numbers.
There are big declines from the end of each year to January of the next year, but that is the same trend for all home sales in Charleston over the last three years:
The peak month for new home sales in Charleston for 2015 and 2016 came in December of both years. In 2015 there were 354 new homes sold, and in 2016 there were 397.
December of last year was the highest amount of new homes sold in Charleston since September of 2006, which saw 479 new homes sold. That is also the most new homes sold in any month on the Charleston MLS.
Here is a comparison of new home sales between 2016 and 2017:
Charleston SC New Construction Demand
In order to gauge the demand for new homes in Charleston SC, we need to look at what the Average Sales Price of new houses for sale in Charleston SC have been doing, as well as look at the Months Supply of homes.
Here is the Average Sales Price for new homes in 2017 compared to 2016:
The peak of 2016 came in August, with the Average Sales Price of a new construction home in Charleston was $377,692.
We surpassed that high in March, at $383,675.
May 2017 saw and increase in new home values to $411,433. This was a 13% increase from April. It was also the highest Average Sales Price for new construction in Charleston ever.
So, it appears that buyer demand for new homes is pretty strong in Charleston.
But to know for sure, we also have to look at the Months Supply of new houses for sale in Charleston SC:
That number has been on the downward trend, although it did see a slight increase early in 2017.
However, even though it is up to 4.2 months supply, that is still well below the 6 month level of what is considered a normal, neutral market.
Here is a comparison of Months Supply for the last 12 months between new homes and the entire Charleston MLS:
Nationally, Months Supply has been below the 6 month level, although the national numbers are closer than Charleston:
Earlier I showed you a breakdown of new home sales broken down by price point for the national market. Here is a look at the local numbers broken down since January of 2016:
That graph looks very similar to the national one.
It is interesting to note that in 2016, there were 727 new homes in the $700,000 to $1,000,000 price range sold.
So far in 2017, those numbers have dropped to just 46 new homes sold so far.
Plus, there are only 100 new houses for sale in Charleston listed between $700K-$1M. It looks like local builders have noticed the trends as well.
If you are interested in buying new houses for sale in Charleston SC, then make sure to visit my Pam Marshall Realtor website.