Home sales are scarcer, but they haven't dried up

In step with a devastating national real estate slump, the Charleston area market has posted double digit declines in the number of homes sold each month for more than two years. Problems stemming from a lack of available credit worsened when consumer confidence shrank after the country's economic crisis turned global.

But despite the gloom, some local residents have found that — for them — now is the perfect time to buy a home. Some investors, for example, are able to buy distressed properties at low prices. And many first-time buyers are able to get an $8,000 federal tax credit that, unlike an earlier $7,500 tax credit, doesn't need to be repaid.

Here's now some buyers made the ailing real estate market work for them.

The Young Professionals

For Shauna and Will Morris, the timing behind their first home purchase was less about a recession and more about their relationship.

The young couple have been married for three years, which Shauna describes as a "comfortable" length of time, and they both felt well-enough established at their jobs at the same North Charleston defense contractor.

"We're both in a good place," she said. "It was time to take the next step."

Armed with patience, the two began looking for a newly built home, knowing they'd have the upper hand when negotiating with builders eager to unload inventory.

At first, the floor plans they looked at didn't offer the expansive square footage that they wanted. But the terms of the deals gradually improved and in October they heard about a two-story, 2,300-square foot Centex home in Goose Creek's Cane Bay neighborhood.

They picked out a lot on a street checkered with new houses and roped-off home sites. The couple paid $191,000 after upgrading to hardwood floors, granite countertops and a gas fireplace.

Being able to pick and choose those decorative details was the key reason the couple looked exclusively at new homes instead of resales, which they might have had to renovate themselves.

"I don't think there's anything in here that I'd change," Shauna, 29, said from her large kitchen.

Job security has become an obstacle for the real estate industry and some young professionals such as the Morrises. Fears of sudden unemployment have scared away some would-be buyers from the closing table or even looking at homes.

But defense contracting work has held up reasonably well, Shauna said. And the couple's employer secured a large contract shortly before they bought the home Feb. 9, easing some of their anxiety.

The purchase meant moving out of their smaller West Ashley apartment complex, where the management tried to get the Morrises to stay by offering to lower their monthly rent. They declined, much to the relief of their dogs: Lily, Patches and 7-month old German shepherd Jake.

"We had already decided to wanted to buy a house at that point," Shauna said. "We needed something bigger. Three dogs and an apartment don't work too well."

The Investor

The modest, 1,200-square-foot house in Summerville's quiet Evergreen subdivision originally was listed at $60,000.

But 46-year-old investor Leroy Godfrey Jr. drove a hard bargain, all the way down to the closing price of $37,165.

The home isn't perfect. It has uneven floors. Some doors don't close right. And the wiring to the broken air-conditioning system was rigged to look as though it worked properly, which helped reduce the sale price.

Still, Godfrey knew the neighborhood was safe enough to draw a family in need of a home. He rents out a similar residence two doors down for $750 a month.

"God isn't making more land, and people are always going to have to rent. So why not buy it and rent it out to somebody?" he said, surveying the property's expansive yard. In his hand, he held the sales information for another possible investment: a four-bedroom home in Hollywood listed for only $20,000.

Even in this depressed real estate market, some of the properties that Godfrey has looked at have spawned bidding wars. Savvy investors, he explained, know a good price when they see one.

Investors in the rental market are likely to have a tougher time finding qualified tenants as big apartment complexes offer several months of free rent and cash-strapped renters move in with family members. And having money on hand also can be a problem for those who sank money into properties that are now upside-down or are hard to sell with so many other homes on the market.

But Godfrey has found an unusual way to generate extra cash flow. For several hours almost every day, he scavenges the deep-discount aisles at big retailers such as Home Depot, buying items priced at $1 or $2 and reselling them online at a higher price.

The income from his Web business helped him amass a $23,000 down payment on his Evergreen property, with the seller financing the rest of the closing amount.

Godfrey's rental venture started in 2000 with the purchase of a $50,000 home that was in foreclosure. After fixing it up, it appraised for $86,000, and he has since rented it out.

He now owns seven properties scattered between Moncks Corner and Beaufort. Most were bought as foreclosures, and each cost less than $100,000.

Though he makes money from renting, Godfrey says he strongly believes in the benefits of homeownership. And he says he asks all rental applicants why they haven't considered buying instead.

Godfrey has little patience for excuses, noting he overcame a personal bankruptcy to buy several cars and secure mortgages for his properties.

"Don't tell me it can't be done," he said.

The Retiree

Carol Hallman doesn't know what it's like to feel the pang of anxiety before checking her retirement portfolio.

The 61-year-old retired public school administrator from Ohio receives a guaranteed pension from a statewide teacher fund. Her balance doesn't fluctuate with the ups and downs of the stock market.

The Charleston region's retiree influx has slowed as more older workers decide to stay on the job to offset the losses in their accounts. But Hallman's financial security allowed her to recently buy a 2,500-square-foot home in Mount Pleasant's Park West subdivision.

"Educators don't make a lot of money, but at least we know what we've got," said Hallman, who plans to move to Charleston from a Cincinnati suburb in April.

Relief, she hopes, will follow her move South. Her sister, who relocated to Charleston last year, will be able to help Hallman care for their 89-year-old mother, who has dementia and needs full-time attention. Both siblings did a thorough evaluation of the local medical-services community before determining that their mother would receive top treatment.

Hallman needed an open floor plan to accommodate her mother's wheelchair, a requirement that removed from consideration some of the lower-priced homes she toured over a four-day marathon. She ended up paying $310,000, about $9,000 less than the list price.

Hallman said if she had more time to look and if she could have been more flexible, she almost certainly could have found a cheaper place to buy.

"There are deals out there to be had, for sure, especially if you're not limited by the floor plan," she said.

But aside from family and her mother's medical needs, Hallman says she was drawn to the Lowcountry for the oft-cited reasons: history, natural beauty and cultural events.

She taught history to high school students for years, so she figures it'll be easy for her to appreciate downtown Charleston's rich past. And she's confident she'll be able to develop a vibrant social life with other like-minded retirees.

"I've never attended anything at Spoleto, but that's an annual draw that I'm looking forward to taking part in," she said.