Local housing market shows signs of spring thaw

Chamber, agents optimistic despite 2-year chill

The somber statistics measuring the housing market in Charleston just keep coming like a steady stream of termites squirming out of woodwork.

Charleston-area home sales in the first two months of the year plummeted 28.5 percent from the same period of 2007.

The average property that changed hands in that time languished on the market for more than four months.

And the number of properties for sale has stretched to a whopping 10,850 listings.

After two years of such dismal indicators, the foundation of the area real estate business is full of holes. Some say the whole works are close to collapsing. Others say it already has.

Samuel Loggins is closing on a home.

'I've got the key in my grubby little hand. I'm going to the bank to get a check for the lawyers then I'm going to U-Haul to do the whole American-dream thing,' he said last week.

Loggins, an engineer with South Carolina Electric & Gas Co., did not think he could recover his equity on his first home in Summerville. But he wanted a shorter commute to his job in West Ashley. When he found some renters and a four-bedroom home on S.C. Highway 61 that had been through foreclosure, Loggins took the plunge.

There are signs that buyers are budding. Real estate agents from all over the Lowcountry said open houses are full and they are busier with showings than they have been in months.

The Charleston Metro Area Chamber of Commerce expects almost 13,000 homes to change hands this year, a 6 percent increase from 2007. The chamber said activity is poised to pick up thanks to attractive mortgage rates, a relatively healthy local economy and demand from out-of-town buyers.

And don't forget it's spring - the peak season for folks looking to feather a new nest.

Charleston is doing great compared to a lot of communities around the nation, according to Matt Sloan, president of the Daniel Island Co.

'Somebody who's out talking to a broker right now or touring a community, they're a serious buyer,' Sloan said. 'Nobody's doing it just for fun.'

Some segments of the market have held up relatively well, particularly high-end homes and empty lots. Almost 60 properties on Kiawah Island sold for more than $2.5 million last year, according to Chris Drury, president of Kiawah Island Real Estate.

'A lot of that has to do with the quality and the buyers we're dealing with ... less than 20 percent make this their primary residence,' Drury explained. 'I guess you could call it a kind of discretionary purchase.'

Charles Sullivan, an agent with Carriage Properties LLC, would not say how much he made in commissions last year, but he helped sell $35 million worth of property - mostly high-end homes on the peninsula. He said interest is up in 2008, and he's welcoming to his office two demographics that were missing in 2007: developers looking to renovate historic homes and parents of Charleston-area college students.

'They are starting to see it as an investment again ... a place to park some money,' Sullivan said.

Realtors across the Lowcountry also said that sellers slowly are starting to turn down low-ball offers - a sign that they think the market is improving. Sullivan recently witnessed another rarity in recent years: a swipe. A low-ball offer on a Meeting Street home was trumped by a buyer offering the list price.

'The sellers are willing to discount, but they are not willing to give their houses away,' said Jan Turner, a Prudential Carolina Real Estate broker who has sold homes near Park Circle for eight years.

Still, there are big bargains to be had.

In December, Will Achurch and wife Amy of West Ashley bought a house in the Park Circle neighborhood of North Charleston for $167,000 - $11,000 less than the asking price. They promptly rented it out.

'It had everything to do with the price coming down,' Achurch said. 'Two years ago you would have had to give the list price and run to give it to them before someone else did.'

But it seems that for every bullish bit of news, there's a bear lurking around the corner. Supplies are high, but prices haven't fallen far. Mortgage rates are relatively low, but financiers raised their thresholds after the sub-prime loan fiasco. The labor market is solid, but gas has jumped past $3 a gallon and consumer confidence hit a five-year low last week.

According to those involved in the home-buying game, all of these factors comprise 'the psychology of the buyer' - an element more critical to a sale than central air or new appliances.

'People become fence-sitters; they wait,' said Drury of Kiawah Island Real Estate. 'And, of course, we never think that's a good idea - those of us in sales. We think it's a great time to buy, but it's hard to combat that given the level of negativity in the market.'

Achurch, who bought that home near Park Circle, doesn't expect a turnaround soon. A commercial lender for Ameris Bank, he says foreclosures will spike as more adjustable-rate mortgages are ticked up to higher interest rates.

'Their payments could double,' Achurch said. '... It's not a good situation.'

Jaime Banda, a retired Marine and a Pepsi salesman, watched his lenders ratchet up a loan agreement last year when he was trying to buy a house and his credit score faltered. Banda's expected payment went from $1,426 a month to over $2,000.

Banda got a better deal when he improved his credit and eventually moved into a 1,600-square-foot house between Moncks Corner and Goose Creek in December. The property was flanked by homes for sale. Since he plunked down $175,000 for his property, prices on the neighboring homes have been cut from $259,900 to $229,000, and from $219,000 to $194,000.

'I'm not going anywhere, but it makes me nervous if I had to sell,' Banda said.

And the market is hampering itself somewhat, as many who have the money and desire for a new home sit tight because they can't sell the place that they own now.

And then there is the relatively constant barrage of media reports. Though there are always buyers and bright spots in the market, most of the major indicators have been dismal for the past two years. These are the numbers that reporters latch onto. These are the numbers that real estate agents constantly have to qualify and explain to nervous prospects.

Drury on Kiawah Island likened slumping sales figures to a snowstorm in New York.

'Is it interesting for me to know about? It is. But if I'm not in New York, do I really care?' he said. 'Once in a while, I do tell my agents to turn the TV off and not read the newspaper for a few days.'

Dan Ravenel said the current slump is just part of a cycle, the type of free-market adjustment that he has seen a number of times in his 31 years of selling homes.

'It concerns me for my clients, because I see a lot of them frustrated ... but I've been there before and I think old folks like me weather these storms very well,' he said. 'We didn't spend all our money last Christmas.'

Slumping sales and the subsequent media reports haven't helped, he acknowledged, but he noted that the industry is slipping from a lofty perch - the huge appreciations of 2004 and 2005.

'I would love to think that press was wholly to blame for this, but it's not that easy,' Ravenel said. 'It will take a while to recover. People are skittish. Nobody wants to be foolish.'

Reach Kyle Stock at 937-5763 or kstock@postandcourier.com. Reach

Warren Wise at 745-5850 or wwise@postandcourier.com.