Charleston SC Real Estate

Home sales up 29%, still boosted by federal tax credit

Residential real estate closings during May rose 29% over last year, benefiting from residual effects of the federal homebuyer tax credit and the seasonal boost that normally comes with spring, the Charleston Trident Association of Realtors said.

A total of 878 home sales closed in May. That’s the highest monthly volume the region has seen since September 2007, the Realtors groups said.

“Low (mortgage interest) rates and an affordable selection of property should continue to support healthy market activity,” said Rob Woodul, president-elect of the group. “This month’s sales show high seasonal activity and the lingering effect of the tax credit, which we anticipate will continue into June and possibly July. We’re optimistic that this is setting the stage for a stable market in the fall and later months.”

The federal tax credit, which provided some first-time buyers with $8,000 and some repeat buyers with $6,500, required contracts to be signed by April 30 and sales to close by June 30.

In the first five months of the year, 3,277 homes have sold in the Charleston region, 28% more than in the same period last year.

Average sales price for the region in May, at $186,497, was about even with the May 2009 median of $187,000. The lowest sales price so far this year came in April, when the median was $180,175, the Realtors said.

“We are pleased to see such high sales volume, but it’s equally important that home prices are continuing to stabilize,” said Jeremy Willits, president of the Realtors group. “So far this year, price fluctuations have been minimal, which is ideal as we see inventory gradually returning to a healthy level.”

At the end of May, 9,867 properties were listed for sale with the Charleston Trident Multiple Listing Service.

County by county
Charleston County home sales totaled 475 during May, a 31% increase over last year. The median sales price was $228,000, up 6% from May 2009.

Sales activity in Charleston County was particularly high in Mount Pleasant south of S.C. Highway 41, where 99 homes sold at a median price of $341,236. Johns Island saw its largest number of home sales since March 2007, the Realtors said. Thirty-two homes sold on the island at a median price of $245,988.

In Berkeley County, sales volume increased 46% to 202 during May. The median price increased 10% to $165,517. Within the county, the majority of sales were in Goose Creek and Moncks Corner from U.S. Highway 52 to the Cooper River. Daniel Island also had a strong month, with 22 home sales at a median price of $540,450.

Sales in Dorchester County rose 10% during May to 170. The median sales price was $168,000, down about 2% from last year. The strongest area of sales was the Summerville/Ridgeville area, the Realtors group said. There, 86 homes sold at a median price of $169,272.

April adjustment
The Charleston Trident Association of Realtors revised its April data to reflect sales completed that month but reported later in May.

Preliminary numbers showed that 784 homes sold during April, an increase of 51% over last year. The median sales price was reported to be $180,175.

Revised numbers raise the total to 844 homes sold at a median price of $181,000.

2010 Charleston Area Home Sales Data

Month January* February* March* April* May

Total Sales 429 541 735 844 878

Median Price $191,100 $179,755 $185,000 $181,000 $186,497

Source: Charleston Trident Association of Realtors

*Numbers adjusted after initial release.

Source: Charleston Regional Business Journal, published June 11, 2010

Housing Starts Maintain Upward Trend in March 2010

By Greg Robb

RISMEDIA, April 20, 2010—(MCT)—Fresh data on new construction of U.S. housing units revealed an upward trend in place since the beginning of the year, with an initial report of February 2010 weakness revised away.

Starts rose 1.6% in March to a seasonally adjusted 626,000 annualized units, the Commerce Department recently reported. This was stronger than the 610,000 pace expected by economists surveyed by MarketWatch.

Even more surprising, February starts were revised higher to a 616,000 pace from the 570,000 previously reported. This was up 1.1% from the prior month. The initial estimate had been a 5.9% drop.

As a result of the revisions, starts have risen for three straight months and are now at their highest level since November 2008. “The bottom line is that there is an upward trend and construction will be moving higher provided that new-home sales improve as well,” said Michelle Meyer, economist at Barclays Capital. Meyer cautioned that one should not get carried away with the improvement as it comes from “an incredibly low level of activity.”

Treasury prices and the dollar added to recent gains after the report. The government cautioned that its monthly housing data are volatile and subject to large sampling and other statistical errors. In most months, the government can’t be sure even whether starts increased or decreased. In March, for instance, the standard error for starts was plus or minus 15.2%. Large revisions are common, but rarely have they been in such a positive direction during this recession.

In March, strength came from multifamily starts. There was a slight decrease in starts of single-family homes. Starts of single-family homes fell 0.9% to a 531,000 rate in March, while starts of multifamily units surged 39.7% to 88,000.

The strength was concentrated in the South; all other regions declined in March.

“This was a modestly positive report. It is nice that construction is improving, but it would be better if the gains were more widespread,” wrote Joel Naroff of Naroff Economic Advisers.

In the past year, starts are down 20.2%. Starts of single-family homes are up 47.1%, while starts of apartments and condominium units have plunged 31.8%.

Building permits rose 7.5% to a seasonally adjusted annual rate of 685,000 in March.

Building permits for single-family homes increased 5.6% to a 543,000 rate—the highest level since August 2008. Many economists consider single-family permits to be the most important number in the government’s release. Permits for apartments rose 15.4% to 142,000.

The National Association of Home Builders recently said its members were more encouraged about their business in April. The builder’s sentiment index rose to 19 in April from 15 in March. “We may be seeing some modest improvement in the fundamentals for new housing construction,” wrote the RDQ economic team in a note to clients.

A tax subsidy for buyers expires at the end of April, and “we will need to see data for May and June before we can put too much weight on this conjecture,” the RDQ note said.

It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 606,000 annualized, up from 594,000 in the four months ending in February.

The industry has slashed production of new homes to work off a massive amount of unsold inventory. The number of homes under construction fell 1.4% to a seasonally adjusted 489,000, the lowest on record, dating back to 1970. “Any pickup in demand,” Meyer said, “will warrant an increase in new construction.”

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.