2018 is off to a good start for Simply Lowcountry Real Estate! Our brokerage had it's 1 year anniversary last month, we hosted our Annual Client Appreciation Dinner for all of our past clients and we have grown our team to 6 agents. We also see the market picking up in anticipation of the Spring real estate season- we have several new listings coming on the market in the next few weeks and we have buyers under contract who are excited to close on their new homes. Just as past years, we had the opportunity to attend the 2017 Year in Review Market Update hosted by the Charleston Trident Association of Realtors. The event sold out within days this year, with over 700+ Realtors registering and attending. The Market Review was led by economists Dr. Joseph von Nessen with the USC Moore School of Business and Stephen Slifer with Numbernomics. Slifer spoke most about the national economy and outlook, while Von Nessen focused more on the South Carolina and Charleston area economies.
Since this tends to be one of our most read blog posts of the year, we thought we would share a brief summary and the major takeaways from what Stephen Slifer and Joseph Von Nessen shared in their presentations at the event. Then, we will dive deeper into the Charleston market sharing charts, graphs and statistics on what is happening here locally.
So, lets get to it.
As we mentioned above, Stephen Silfer spoke mostly on the national economy and its future outlook. Here were the major takeaways from Silfer:
- He doesn't expect that we will see another recession until 2022 at the earliest, possibly 2025
- Consumer confidence is at its highest point since the early 2000's, with an 8% increase in net worth and 170,000 new jobs each month.
- The average price per gallon of gasoline in the US was $2.57/gallon
- Home sales are the fastest in a decade, there is 3.2 months of supply (nationally) and the average days on market is 40 days, with half of homes selling in 30 days.
- There is a 7.5% vacancy rate amongst rentals
- Small business confidence is at its highest since 2004.
- Predict a 2.9% GDP growth in 2018, it was 2.7% for 2017.
- 2017 was the first time sine the recession for global growth
- 4.1% unemployment growth. Hourly earrings have increased 2.7%, and there was a 3.5% compensation growth.
- If the economic trends continue, in June of 2019 we will hit the longest expansion of growth on record.
- Predicted 30 year mortgage rate is 4.5% for 2018.
Joseph Von Nessen spoke on a more local level, in particular the economy in both Charleston, and South Carolina. The major takeaways from his presentation were:
- The Dow showed a 25% growth in 2017, and Bitcoin showed a 1,298% growth
- South Carolina hourly wages are becoming steady and we reached full employment
- Charleston employment growth is stabilizing, as well as hourly earnings.
- 2018 MLS sales activity should be steady due to employment growth
- The MLS activity shows the most growth in the $400k + listing categories.
- Average student has $25,000 in student loan debt- however, the growth in the student loan debt has slowed
Alright, now lets dive in to the specifics in our Charleston Tri-County Market
Distressed Properties are fewer and far between from their peak during the recession. In 2017, the percentage of closed properties that were either a short sale or foreclosure decreased by 8.1%, making it a total of 5.7% percent of the market.
There is lots of new construction in the Charleston market. There are tons of new neighborhoods popping up, however there are only 3.8 months of finished product on the market. New construction supply has seen less change however than resale home product.
In 2017 there were a total of 18,381 sales, a 3.1% increase from 2016's 17,826 closed sales. The top 5 areas of change in closed sales from 2016 were: Seabrook Island, Edisto area, Isle of Palms, Johns Island, and Kiawah Island. The bottom 5 areas with a change in closed sales from 2016 to 2017 were West Ashley area, Sullivan's Island, Upper Mount Pleasant, Upper Charleston Peninsula and Hanahan.
Inventory has been a constant issue in the Charleston area, and also a national issue. The inventory continues to decline month over month. At the end of 2017 there were 4,673 homes for sale. This number is down 14% from 2016's year end number of 5,431 homes for sale at the end of 2016. The top area for change in inventory was the Wando/Cainhoy area which is up 53%, and the bottom area for inventory change was the Edisto Area which is down 25.8%.
AVERAGE SALES PRICE
The average sales price for 2016 was $320,703, that was up 4.3% over 2016. The average sales price for 2017 in the Charleston Tri-County area is $340,183, up 6.1% over 2016's average sales price. Since 2013, this number has increased each year. The top 5 areas for change in the average sales price were Kiawah Island, Sullivan's Island, Upper Charleston Peninsula, James Island and the Edisto area. The bottom 5 areas for change in average sales price from 2016 were Hollywood/Ravenel/Meggett, Wando/Cainhoy, Lower Mount Pleasant, Daniel Island and Isle of Palms.
DAYS ON MARKET
The average number of days on market (DOM) for 2017 was 55 days, a decrease of 5.2% from 2016 where the average number of DOM was 58.
PERCENTAGE OF ORIGINAL LIST PRICE RECEIVED
The percentage of original list price received on listings in the Charleston tri-county area stayed the same from 2016 to 2017. The percent of original list price in which a listing received was 96.5% for two years in a row. The number changed from 2015 to 2016 however by .6% when it went from 95.9% (2015) to 96.5% (2016 and 2017). The top areas for change in percentage of original list price received from 2016 were Seabrook Island, Edisto area, Isle of Palms, Sullivan's Island and Wando/Cainhoy. The bottom 5 areas were Lower Mount Pleasant, Downtown Charleston, Kiawah, Upper Mount Pleasant and Daniel Island.
We touched briefly on distressed property sales at the top of this 2017 Market Review. In 2013, 18% of sales were distress sales, and now in 2017 only 5.7% of sales are distress sales (short sales and foreclosures). To compare 2016 to 2017, 2016 saw 6.2% of sales as distress sales, which means from 2016 to 2017 there was a 8.1% decrease in distress sales. The top 5 areas with distressed market share in 2017 were: Folly Beach, Hollywood/Ravenel/Meggett, James Island, Greater Summerville and Greater North Charleston.
**PLEASE NOTE: A property is counted as Distressed when the SPECIAL field in CTARMLS is marked as "Lender Owned," "Corp Owned" or "Possible Short Sale,", or if the POTENTIAL SHORT SALE field is marked "yes," or if the REMARKS or AGENT NOTES fields contain a phrase that 10k Research has determined will very likely mark a distressed property.
We also touched briefly on new construction at the top of this report, but wanted to note the top areas for new construction market share in 2017 in the Charleston Tri-County area. The percentage of original list price received for new construction in 2017 was 100.1%. The peak of new construction inventory was in April of 2017 and at years end of 2017 there was a total of 3.8 months of new construction inventory supply, compared to 2.8 months of previously owned inventory.
The top areas for New Construction Market Share in 2017 were Johns Island, Goose Creek/Moncks Corners, Hollywood/Ravenel/Meggett, Upper Mount Pleasant and the Dorchester Road Corridor.
We aren’t going to break down each MLS area separately, however we did want to note the number of closed sales in Charleston, Dorchester and Berkley County’s.
Charleston County had a total of 9,438 closed sales, up 2.1% from 2016. The median price in Charleston County was $251,333, a 4.7% change from 2016. 18.5% were new construction, 24.6% were condo/townhouse sales, and 95.9% was average percentage of original list price received, with 59 DOM average.
Berkley County had 4,817 closed sales, up 7.8% from 2016. The median price in Berkley County was $220,115, up 4.8% from 2016. 31.2% were new construction sales, 18.5% were townhouse/condo sales and 96.5% was the percentage of original list price received, with 46 DOM average.
Dorchester County saw 3,473 closed sales, up 1% from 2016. The median sales price was $215,000, up 7% from 2016. 20.4% were new construction sales and 10.9% were condo/townhouse sales. 97.6% was the average of percentage of original list price received, and 45 DOM average.
AREAS WITH THE MOST SALES
The highest number of sales were recorded in the Goose Creek/ Moncks Corner area with a total of 3,388 sales, a 9.7% increase from 2016.
The second highest amount of sales were recorded in the Greater Summerville area. There were 2,225 closed sales, a .9% increase from 2016.
The third highest number of recorded sales was the West Ashley area with 1,874 sales, however this is a 2.2% decrease from 2016.
AREAS WITH THE LEAST AMOUNT OF SALES
Sullivan's Island had the least amount of recorded sales this year with 59 homes sold. That is a 4.8% decrease over 2016. It's important to note that Sullivan's Island is a much smaller area than say the Goose Creek/Moncks Corner, the area with the highest number of sales in 2017. Sullivan's Island also does not offer new construction neighborhoods (in the traditional sense). The median sales price in this area was $1,700,000, a 25.9% increase from 2016.
The area with the second lowest number of closed sales was Kiawah Island, with a total of 65 MLS sales. This number is up 14% though over 2016. The median sales price for this area was $725,000, a 17.9% increase over 2016.
The third area with the lowest number of closed sales is St. George and the Rural Dorchester County area with 71 sales, up 18.3% over 2016. The median sales price for this area was $127,500, a 1.4% increase from 2016.
WHAT TO EXPECT IN 2018?
We expect that we will still see a strong sellers market because of the inventory shortage, not just locally, but nationally as well. As for buyers, the market will still be competitive, so it's important to start putting plans into action if your goal is to buy a home in 2018. We do expect to see prices rising at a slower trend though.
** ALL DATA AND CHARTS/GRAPHS ARE FROM THE CHARLESTON TRIDENT MULTIPLE LISTING SERVICE. SIMPLY LOWCOUNTRY REAL ESTATE, LLC DOES NOT GUARANTEE THIS INFORMATION.