Charleston-area home sales slipped slightly in July for a second consecutive month as a lack of inventory and rising prices thwarted some buyers.
Residential real estate transactions edged down 0.5 percent last month from a year earlier, according to preliminary data Friday from the Charleston Trident Association of Realtors.
The dip follows a 3.8 percent slide in June. Home sales have been see-sawing for much of this year, and the back-to-back declines come after record-breaking sales in 2017.
The president of the association said the market is likely becoming more balanced rather than trending down.
“Without an increase in inventory, it was not surprising that the typically busy summer season sales have been pretty even," Kimberly Lease said. "We also continue to be challenged by affordability issues in our region, which is making our market inaccessible for many buyers.“
Lease also noted that some experts believe the national summer slowdown is an initial indicator of a housing bubble because prices continue to escalate. She doesn't think that's the case locally.
"In our market, I think it is more likely that we are moving toward a market balancing — sales growth and price growth will continue to even out, as we’ve seen over the last few months, and the result will be a more balanced market,” Lease said.
She pointed to sound lending practices, a strong local economy and a healthy demand for homes in the region.
"I don’t believe an evening of the market will have negative consequences for us in Charleston," Lease said.
Last month, 1,685 homes changed hands throughout the region. The median price rose almost 4 percent, or $9,648, from a year ago to $268,583.
Through the first seven months of the year, 11,052 homes have sold at a median price of $265,000, up 6.0 percent. Volume is up 0.3 percent for January through July, a sign of a pretty flat market so far this year.
The number of homes on the market across the region continues to be low, with 5,275 residential listings as "active" for sale in the Charleston Trident Multiple Listing Service as of July 31. That's down 13 percent from a year earlier.
A healthier number of available homes in the region to keep prices in check is about 6,500, the local Realtors group has said previously.
While the cost to own a home is on the rise, mortgage rates, up from last year at this time, edged down this week. Financier Freddie Mac said the rate on a 30-year mortgage slipped slightly to 4.59 percent while the rate on a 15-year loan nudged down to 4.05 percent.
Sam Khater, Freddie Mac’s chief economist, says mortgage rates have mostly drifted sideways this summer.
“This stability is much needed for home sales, which have crested because of the multi-year run up in prices, tight affordable inventory and this year’s higher rates,” he said. “Going forward, the strong economy will support the housing market, but with affordability pressures mounting, further spikes in mortgage rates will lead to continued softening in home price growth.”
Job growth has been steady, but wage increases have not kept pace with inflation.
"With home prices still climbing and (long-term) mortgage rates up from 3.90 percent a year ago, some prospective buyers are definitely feeling an affordability crunch,” Khater said.
Property information service CoreLogic expects home prices nationwide to jump 5.1 percent through next June, further putting a pinch on prospective buyers.
“With home prices rising quickly over the past few years and supplies low, first-time home buyers face ever-growing challenges to find and buy affordable entry-level homes," said Frank Martell, president and CEO of CoreLogic. "More needs to be done to help our first-time buyers join the homeownership class.”
Nationally, home prices climbed 6.8 percent over the past 12 months through June, according to the property information provider.
The local Realtors group also adjusted June's sales figures slightly higher in the region to show 1,932 home transactions at the same median price of $270,000.