Are We at the Bottom?

In my last post, I noted that inventory was finally moving in the right direction to help the market correct. But, we have a ways to go. Our biggest problem is too much supply and a lot of it is overpriced. If we could just remove all the overpriced listings from the market, it would correct itself in a hurry. However, just because there are a lot of overpriced listings doesn't mean that buyers shouldn't be buying. There are also lots of well priced and undervalued listings. It's a tremendous time for buyers to get into the market. Buyers just need help from their realtor more than ever to sift through the chaff.

Here's the proof that there are still a lot of overpriced listings: The median price of single family solds in 2007 in Charleston was $217,000. Listings are always priced a little higher than they will sell for. Generally, we sell homes at an average of about 95% of their list price. Let's be generous and use 90%. This would mean that current listings should be priced at a median price of $241,000 so that 90% would be the $217,000 from last year. Well, here's the shocker. Our current median price of single family listings in Charleston is $315,000!! That's around 30% too high.

Having said that, the median price of new listings in February was only $269,000, so, we are moving in the right direction. We simply need to remove all of those overpriced listings from last year.