Market Turning a Little

We have made an incredible recovery over just the last 2 months. 2 months ago we were off 35% in the number of transactions; now we are only off 25%. 2 months ago, price was down 15%; now we are only off 11%. The numbers are even better if you just look at SFD only.

Activity remains very high. The number of contingents on the hot sheet each week is easily beating numbers from last year. By the end of 2009, I feel very sure in predicting that there will be more contingents in 2009 than in 2008. If we keep up at this pace, closed sales may not be down that much from 2008. The large gap between contingents and closed sales is due to fall throughs from unsuccessful short sale attempts and appraisals. Contract fall outs in some areas are pushing 30% where historically fall outs were 18%. 21% of current contingents are either short sales or lender owned. Appraisals are also causing fall throughs. Even more reason to price a listing correctly to begin with.

Housing Market Stats

There are some very small signs that make the real estate market here in Charleston appear to be headed toward a recovery. However, I think they are too small to really make a difference. There is a lot of buying activity out there right now. A lot of that is due to the $8000 tax credit for first time home buyers, the lower prices, the low interest rates, and the large selection. Sadly, the $8000 tax credit will come to an end on November 30, 2009 and interest rates are probably going to head upwards for quite some time(maybe several years.) Proof of the buying activity, as always, is in the numbers. The Charleston MLS is only off 8% in the number of properties going under contract(contingents) versus the same period in 2008. In fact, the numbers for Sept-Dec ember of 2008 were so dismal, that I’m quite certain that 2009 contingent numbers will surpass those of 2008. It’s amazing, but the Charleston market will actually have more ratified deals in 2009 than in 2008. Yet, 2009 closed sales are 30% down versus the same period in 2008. The reasons that there is such a discrepancy between contracts ratified this year and the number of closed sales comes down to 2 things, appraisals and short sales. Appraisers are coming in much lower than the agreed upon purchase price and causing deals to fall through. Also, short sales and foreclosures are now above 20% of the deals being ratified and they can be a nightmare to close. We just had a short sale that we thought was only a couple of weeks from closing after a 3 month wait, only to get a call from Chase saying that they had lost all the paperwork and we would have to resubmit everything. Many short sales may never close. So, while there are plenty of buyers out there willing to purchase, many of the deals are falling through. Ultimately, I still feel that it will be at least 2 more years before this bottoms out and another 2 years before prices are just back to where they are now. Sellers should sell as quickly as possible to get the most for their home and buyers shouldn’t wait for prices to go lower since interest rates will be going up.