Home prices hit in most areas by downturn
Updated 11:23 a.m., January 26, 2009
The Post and Courier
North Charleston neighborhoods located inside Interstate 526 saw the only sizeable gain in median sale price last year. Local real estate agents attributed the jump to the city's revitalization efforts and more expensive newly built homes in the area.
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Slippery slope (flash)
What goes up, in most cases, must come down.
For the local housing industry, Newton's law of physics caught up with the residential real estate market in 2008, pushing down the median price of Lowcountry homes to slightly more affordable levels.
Homes last year sold at prices that were about 3 percent lower than in 2007, marking the first year-over-year price decline in median sales price in recent memory.
The Charleston Trident Association of Realtors said the median sales price for residences sold through its Multiple Listing Service was $203,270, down from $209,742 in 2007.
Mark Kearns, a Mount Pleasant real estate appraiser, estimated that most homes are now worth 5 percent to 10 percent less than what they would have fetched when the market peaked roughly three years ago. He said the falling prices come after an extended period of too much supply, too few buyers, economic uncertainty and rising unemployment.
But true to the old industry mantra — "all real estate is local" — some locations are holding their value better than others. Luxury beachside homes have seen double-digit declines in value, while buyers lately have sought out deals in modestly priced neighborhoods, keeping prices in those areas relatively stable. Properties that are in prime spots and located a comfortable distance from new developments also have held their value better.
"Money's like water. It seeks the lowest level," said Fudgy Brabham, broker-in-charge of Mount Pleasant-based Harbourtowne Real Estate.
To varying degrees
Association data show that throughout 2008, no part of the Charleston region was immune from the real estate recession.
But the decline in prices between 2007 and 2008 varied among the 38 individual submarkets designated by the association. Prices slipped by sizable margins in West Ashley, Mount Pleasant, Summerville and Goose Creek, while they held steady in Hanahan, North Charleston, downtown Charleston and on Johns Island.
In some areas, the declines seemed to follow basic demand-based economics.
Neighborhoods along Clements Ferry Road near Daniel Island, for example, didn't see a huge drop in sales volume last year, perhaps because prices quickly fell to match the new market realities. The price of the typical home there went from $259,000 to $218,950 — or 15 percent — over the course of 2008.
On James Island, prices declined a modest 4.6 percent to $248,000 last year. While 699 homes changed hands there in 2007, 444 sold in 2008.
On Daniel Island, home sale values actually edged up by 3 percent to a median of $445,200, which Kearns the appraiser chalked up to the fact that sellers there already had absorbed a deep hit. Between 2006 and 2007, the median price crumbled to $431,495 from $569,000.
Overall price declines in Mount Pleasant were in line with parts of Summerville and West Ashley on a percentage basis. But because homes, on average, cost more in the East Cooper suburbs, the overall drop seemed more dramatic in terms of dollars. The median price skidded about 7 percent, to $345,000 from $370,000, inside U.S. Highway 41, and about 5 percent to $314,165 from $300,00 beyond that point.
Bright spot
The one area that saw a significant double-digit uptick in its median home price last year was in North Charleston, inside U.S. Interstate 526, where prices jumped 32 percent to $156,250. That bump was likely tied to revitalization efforts, relatively modest prices and a centralized location, said Billy Simons of Trident Real Estate.
"You're 15 minutes away from anything," said Simons, who lives in Cameron Terrace. "People are realizing how convenient this location is."
Simons stressed that the 32 percent increase doesn't necessarily mean a home that was worth $100,000 in 2007 in that area could now fetch $132,000. The jump is more likely tied to the pricier, newly built homes that were sold in that part of the city, which hasn't seen much new residential construction until recently.
Established neighborhoods that are near new housing developments were more likely to see home prices fall in 2008. One reason: The bigger builders have the advantage of being able to cut prices and offer incentives to move inventory, while individual sellers are often only able to lower their asking prices to attract buyers.
Sellers also are going up against a growing stock of foreclosed properties, which lenders are eager to unload.
Bill Hall, a Summerville-based agent with AgentOwned Realty, realized just how tough the competition had become while sifting through sales data last fall for a client. When looking at the 10 Dorchester County homes that sold in November for between $155,000 and $165,000, he found that six were newly built and that two had been in foreclosure.
"That's who you have to compete against if you're an individual homeowner," Hall said.
The buyer's market also extends to some of the area's expensive island communities, where double-digit price declines were commonplace as the market retrenched last year. Folly Beach sale prices fell 19 percent, Sullivan's Island saw a 26 percent fall and Isle of Palms, excluding Wild Dunes, recorded a 12 percent drop.
"They're waiting for foreclosure pricing," said Ron Davis, a real estate agent based on the Isle of Palms. Davis said he expects prices for luxury homes to come down even more off their peak values.
But at least one zone in the high end of the market held its ground: the area of downtown Charleston below the Crosstown. While sales volume in that part of the peninsula fell 36 percent, prices remained level at $570,000.
Ruthie Smythe, broker-in-charge of Lane & Smythe Real Estate, speculated that was partly because of continued interest in expensive and historic properties among well-heeled second-home buyers. Purchasers of primary homes also helped maintain the status quo.
"I think we have enough primary homebuyers," Smythe said. "That covered us."
Reach Katy Stech at 937-5549 or kstech@postandcourier.com.
Editor's note: Due to incorrect information provided to The Post and Courier, earlier versions of this story contained incorrect sales figures for James Island for 2008.
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Comments
tbird (anonymous) says...
The author quoted:
"But at least one zone in the high end of the market held its ground: the area of downtown Charleston below the Crosstown. While sales volume in that part of the peninsula fell 36 percent, prices remained level at $570,000".
36% fewer sales @ a median price of $570K...Does not take a genius to realize that sellers were not cognizant of the fact that we are now in a new paradigm in '08 and reduce their asking price. 2009 will definitely see price reductions on the peninsula in Area 51...and yes I am a Realtor and Investor ( just not in real estate). BTW, where does Ruthie Smythe think these buyers will come from? These second home buyers are the hedge fund folks who got cleaned in '08 with more pain to come in '09...
January 23, 2009 at 9:04 p.m. ( permalink | suggest removal )
whome (anonymous) says...
$417 is the new black. Without the exotic, non-conventional mortgages, the upper end market is going to get crushed.
January 23, 2009 at 9:59 p.m. ( permalink | suggest removal )
moonpie (anonymous) says...
tbird, I agree. Ths is not a sign that things are getting better. Just once again the realtors trying to spin the damage report. People do your own investigations if your buying. There are short sells in most nighborhoods that you won't hear about unless you have someone in the know...
January 26, 2009 at 6:41 a.m. ( permalink | suggest removal )
Oceanlover (anonymous) says...
How exactly is it a bright spot when volume is down 36 percent? Again - median price skews the upper end. The lower end down below the crosstown is substantially lower. Don't believe it? Have a look around the vicinity at end of Wentworth close to the Ashley. Homes have been sitting and sitting and sitting. Whome - agreed with your point about the above 417k sales. Ain't gonna happen when your average moron can't get a no-doc, no money down loan anymore. Do your research people.
January 26, 2009 at 7:03 a.m. ( permalink | suggest removal )
nappyd (anonymous) says...
The Realtor association with Lawrence Yun has been trying to spin the national data positive since late '06 when the real estate market nationwide first started hitting problems in CA, AZ, and FL. Since then it's been a bunch of bs. Granted a 3% drop in prices isn't too bad compared to those states, but still.
Unfortunately there isn't a stat for the # of people who have taken their homes off the market b/c they can't get what they want for it, etc. Add in those, foreclosures, etc. and the prices could be a lot lower than they are in the area.
Thankfully, Charleston has these great property tax rules in place though (by the way that's sarcasm).
And this year is supposed to be the one the commercial real estate market takes a dive due to the economic downturn and also, no surprise, overbuilding in it as well.
January 26, 2009 at 9:40 a.m. ( permalink | suggest removal )
wjhamilton3 (anonymous) says...
Charleston can't live off real estate sales and construction. We've never adjusted to the fact that the Navy Base has gone and attracted the number of high paying, quality jobs we need. With the cheap land gone and the islands and waterfront property nearly built out, we're now trying to sell big houses on inland lots without deep water access and fairly high prices. What does our area have to offer to support these prices that allows it to compete in a national real estate market? You get to drive to the beach, to crowded boat ramps or to shopping which looks exactly like Atlanta.
I love the Lowcountry, but I can hardly find it any longer. The easy access to open water, the beaches and a lot of our quality of life doesn't seem to be the same.
We took a rocket ride from cheap land to where we are, but the rocket is out of fuel. Without the constant refis, cash is running out for a lot of families as well.
Somebody here needs to figure out how to make something the world wants to buy. Tourism and the Port aren't going to take care of us.
January 26, 2009 at 12:20 p.m. ( permalink | suggest removal )
tallblonde (anonymous) says...
This article has to be in error - haven't we always been told by local realtors that Charleston real estate is "recession-proof" ????? ;)
Shame on you, P&C for printing such an erroneous article!
;)
January 26, 2009 at 12:30 p.m. ( permalink | suggest removal )
coolfreaknbeans (anonymous) says...
I can fully relate to the portion discussing old vs new construction. I always thought I wanted to live in an older, established neighborhood. My wallet helped to change my mind. When I was house hunting a year ago fall, I was shocked. Old beat up, near fixer uppers were tens of thousands more in price. Some of them were as much as $40,000 more for homes with less sq footage, bedrooms and bathrooms. People were acting as if they were selling the Taj Mahal. I went to a new home community, built a beautiful home, got to pick out my options at a design center, all while saving a boat load of money. My home was assessed for nearly 60 grand over what I paid in under a year.
January 26, 2009 at 1:11 p.m. ( permalink | suggest removal )
GG (anonymous) says...
I'd sure like to find those lower prices in MP. HA!
This article is ridiculous. They are getting this info from realtors?!? Now those are good sources, right?
I lump realtors with used car salesmen nowadays, Can't trust the lot. This article is just another example of how the realtors want to put a positive spin on things.
There are six houses on my street alone in MP that have been on the market for 6 or more months. They are still priced too high to sell. One of them finally reduced its price by 35K and had 10 people look at it over the last week. "Things that make you go hmmmm...."
January 26, 2009 at 1:55 p.m. ( permalink | suggest removal )
yird (anonymous) says...
wjhamilton3 I love the Lowcountry, but I can hardly find it any longer. The easy access to open water, the beaches and a lot of our quality of life doesn't seem to be the same.
_____________________________________________________________
My sentiments exactly.
January 26, 2009 at 4:29 p.m. ( permalink | suggest removal )
mp123 (anonymous) says...
If you are buying or selling a house, the most important number is the SALES PRICE, not the SALES VOLUME. Obviously volume is down everywhere, as mortgage money is tighter, speculators and flippers have left the market, and most people are waiting for the market to hit a low.... which btw is impossible to predict. While the naysayers can speculate about prices and the health of the downtown market, the fact is, average sales prices haven't made a significant drop.
January 26, 2009 at 4:44 p.m. ( permalink | suggest removal )
walleyedwoman1215 (anonymous) says...
What is a short sell?
January 26, 2009 at 5:30 p.m. ( permalink | suggest removal )
coolfreaknbeans (anonymous) says...
From what I understand, thats when they sell the home at a low price to avoid foreclosure, with the owner not making a profit- only the lender. Like a last ditch effort.
January 26, 2009 at 9:08 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
Prices are just getting back to where they should have been. All the easy money credit made people sell and buy for over the actual value of these homes. This is just called a market correction, and people who didn't do stupid things during the bubble have a good opportunity to make good deals off of the other peoples stupidity. That's how it works. If the government quits dumping printed money into the market it will get back to normal soon, if they keep it up it's gonna totally screw the entire economy.
January 26, 2009 at 11:27 p.m. ( permalink | suggest removal )
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