Think of the metro Charleston real estate market as a marathoner.
After breezing through a stretch where everything seemed a snap (housing boom into early 2007), the once-lithe brokerage and builder industries hit the wall, straining and grunting along a painfully tough patch with little progress (’07-’10).
They would endure another spell of rough conditions but somehow survived in good spirits (2011). Suddenly, the finish line (housing recovery) didn’t seem so far away. They built momentum (early this year) and prepared to tackle the next stage (2013) with gusto. One worry, there may be some big hills on these miles (the possibility of another string of foreclosures).
“Across the board, we see the market certainly improving,” says Herb Koger, agent with Carolina One Real Estate and 2012 president of the Charleston Trident Association of Realtors.
David Dix, sales associate with Ryland Homes in Ladson’s Bellwood neighborhood, says the builder is “expecting to see a 10-15 percent increase in our audience (the Charleston area).” Plans call for hiring more agents, too. “It’s going to be exciting stuff,” he says.
According to figures from the local Realtors association, sales rose 5.5 percent to 9,238 transactions closed last year. At the same time, home prices ended 2011 off 2.7 percent from a year earlier. “At $182,000, prices have come down roughly 12 percent from their bubbly apex in 2007,” the report says.
Too, Berkeley, Dorchester and Charleston counties’ relatively strong housing economy may not reflect a countrywide rebound.
“You look at nationally, it’s not as strong as here,” Koger says. “Ours is a more stable market.”
Whatever the case, the secure local housing picture has brightened the mood for thousands of agents, dozens of builders, scores of local property buyers and — for the first time in awhile — numerous sellers.
Observers don’t expect to see go-go times like the early- and mid-2000s; those days may be gone for a long time. “I would say we are in a transition. We are not going to burst out at the seams,” Dix says.
But the outlook is indeed brightening. “The emotion is positive, the data is starting to be positive,” he says.
“By the end of the year, the first part of 2013 (things look) to be clicking on six of eight cylinders,” Koger says. He sees housing totals climbing in the winter months, which is unusual even in a robust year. “Normally, this is the slow part of the year. Personally, our business (Carolina One) has picked up.”
What boosts greater Charleston is its quality of life: generally warm weather, coastal beauty, decent employment prospects.
“We are in the fortunate position that people are moving here,” Koger says. “We are seeing a mixed market. Older business people want to retire here.” Meanwhile, companies such as Boeing are providing positions to “younger folks looking for jobs. That’s what is really helping our market,” he says.
“We are very, very lucky here in Charleston to have captured Boeing,” Dix says.
While the home-buying market remains in rebound mode, the rental trade has fully bounced back.
According to the year-end Charleston Rental Market snapshot, new listings in the area’s Multiple Listing Service rose 5 percent from 2010 to a record 5,874 units. The median rental rate was $1,200 a month, the report notes. Carolina One Real Estate director-broker Eric Wetherington, who oversees the company’s property management, maintenance and closing services division, compiles the snapshot.
Unlike most places around the country, the Charleston area benefits from recent job growth, the report finds.
“With the addition of major employers like Boeing and the pending Clemson University turbine research facility there are many folks moving here to take advantage of these new jobs,” he says.
At the same time, a sizable share of residents lost their homes in a short sale or foreclosure, making them legally unable to qualify to buy another house for several years.
“They often make great tenants as they are used to taking care of a home and they desire to live in a similar neighborhood to the one they left behind,” he says.
Another factor: the Y generation “is more care-free and longs to be more
mobile. They don’t want to be tied down to a house, job or community until
later in life,” he says. That’s increased demand for high-end rentals in the Charleston area and elsewhere.
Wetherington believes the median rent will increase in early summer— as in 2011 — as supply tightens during the peak months and demand continues to rise.
“We expect 2012 to be another strong year for the Charleston rental market,” he says.
Dix, for one, contends the surging rental market is actually a boon to home shoppers, since leases are winding up pricier than mortgage payments for comparably sized properties.
A few signs that the real estate market is healing have already started to show up. For instance, the Charleston area’s home inventory, which is the volume of properties for sale at any given time, was 9,000 in 2009. It has tumbled since then to about 6,000 houses today. One reason for the decline: “A lot more short sales and foreclosures were cleaned out,” Koger says. “With that all said, it could be worse.”
Even so, foreclosures — which account for one in four sales in the Charleston area — remain a thorny problem. They can drag down prices throughout a community. “It’s hurting comps (comparable sales prices in neighborhoods),” he says. “Unfortunately, appraisers have to use some of these.”
Another fly in the ointment is the oft-heard rumor that another wave of foreclosures will threatenl the market, Koger says, noting that he’s been unable to validate it.
“If we just look at (housing) statistics, the market improving, yeah it really looks good. If we get foreclosures dumped on us, it will slow down things.”
A doubtful Dix says, “They’ve been talking about this (second surge in foreclosures) since last year. Really? Are they (coming)?” he questioned.
Koger says home sellers and buyers still are having trouble coming to grips with the startlingly low prices proffered today as opposed to 2007-08.
“It’s hard to get clients to understand, property is not worth the same as four years ago,” he says.
“If you are buying, now is the time to buy if you’ve got the money,” he says. Yet bargain-hunters should be careful. Young people see a foreclosed property and figure the price will be $50,000 to $60,000 less, he says. But the process from contract to closing can be very drawn out, he says.