Real Estate Matters in Charleston SC – Gena Glaze

Written sales market wide in September 2023 finished 6% below September of ‘2022.

• Based on interest rates remaining higher, it is anticipated that the second half of the year will be similar to the first half of the year with sales in the -15% year-over-year range
• Carolina One finished the month with written sales 21 points OVER the market.
• Last week saw 266 properties go under contract, a “normal” number for this time of year but far below the pandemic years of 2020 and 2021. See chart Below – Sales (green line) still remain remarkably close to the 15 year average (blue line) and have for about three and a half months. The orange line represents ratified contracts by week last year…the green line is this year…and the blue line is the 15 year average for each week. Follow the green line below.

Mortgage rates remain elevated, which can hold back sales levels.

https://fred.stlouisfed.org/series/MORTGAGE30US

• It is speculated that 6.5% could be the “magic number”; to increase activity. When 30 year mortgage rates trend below that number and stay there for a reasonable period of time, more buyers may come off of the sidelines and resale listing inventory will start to come back online at a higher rate than what we are seeing currently.

The Median sale price in the Charleston market continues to stay in a tight band between $400k and $420k where it has been for most of the last 18 months.

Active Inventory stands at 2,850 listings. While this level of inventory is a significant increase over the listing “floor” that we set in February of 2022, We still need roughly 4,100 additional listings market wide to achieve a balanced market (5 months of inventory).

How Mortgage rates effect inventory: About 60% of properties have a mortgage. Of the 60% that have a mortgage, 90% of those mortgages have an interest rate below 5%. Many owners are reluctant to trade their lower interest rates for current market rates.

The Charleston market has about six or seven weeks of inventory as a whole, although this can vary some by price range and specific location. It is still a seller’s market. The most active areas have inventory levels in the 4-8 week range.

Gena Glaze 843-343-8239

Nationally, It has been speculated that home prices would crash this year, but prices aren’t in a downward spiral and may actually finish the year strong. This is mainly due to the supply of homes for sale being too low. There are just more buyers looking to buy than homes available and that’s kept prices from falling.

Most Experts Project Home Prices Will Net Positive this Year

The general consensus from industry experts is that home price appreciation will actually be positive for 2023. The graph below shows the latest 2023 year-end forecasts from six different organizations:

The majority of experts are optimistic about home price growth.

The projection from the National Association of Realtors (NAR) is for a slight decline and if you average all six forecasts together, the expectation is that prices will net somewhere around 3.3% positive growth for the year.

One of the six forecasts represented in the graph is the Home Price Expectation Survey (HPES) from Pulsenomics. It combines survey results from over 100 economists, investment strategists, and housing market analysts. The HPES found that the average from all 100 of those experts is 3.3% price growth for the year.

While individual forecasts may vary, both the HPES survey and the average of these forecasts predict positive growth.

Gena Glaze