HOLMES: Local residential real estate market is going gangbusters

By Doug Holmes, contributing editor

Editor’s note: Local Realtor Doug Holmes provides a monthly analysis of the Charleston real estate market that always includes interesting insights. With this issue, he’ll share his thoughts about what’s happening to give you a better perspective on what generally is a family’s largest investment. Welcome, Doug!

JUNE 8, 2015 | Amongst all of the other good news found on this site, I’m here to tell you about how fantastic the residential real estate market is doing. It’s one of the best markets in the U.S. right now. All of the other good news on this site is one of the primary reasons for that. Many people are deciding to move to Charleston and make it their new home. Some are looking for employment. Others are looking for a better lifestyle. And others have decided to retire here.

Let me just give you some numbers to think about. We are currently seeing the strongest buying activity in the history of Charleston’s real estate market. The best way to measure that is to look at the number of properties that go under contract in the tri-county MLS each week.

To give you some perspective, 200 properties going under contract in a week is a good benchmark for a good week in Charleston. In 2008, that only happened 4 times. In 2009, it didn’t happen at all. It happened only nine times in 2010 and eight of them were in March and April when the government was trying to spur on the economy with the $8,000 tax credit for first-time home buyers.   In fact, we set an all-time record at that time during the last week of April with 369 residential properties going under contract in one week.

It got a little better in 2011. And then in 2012, you could tell we were finally coming out of the recession when almost every week had more than 200 homes under contract. In 2013, while most weeks were over 200, we actually had 12 weeks over 300! We hadn’t seen that regularly since the heydays of 2005 to 2007.

Last year (2014) saw 21 weeks over 300 and one week set a new record at 392 homes under contract. Through May of 2015, almost all of the weeks have seen well over 300 homes under contract each week and we’ve had four weeks over 400 for the first time ever. In April, there was a new record of 439 homes under contract. (Sorry to hit you with some many numbers, but I believe it tells quite a story.)

From 2005 to 2007, we sold between 14,000 and 18,000 homes in Charleston each year. Between 2008 and2011, we hardly broke the 9,000 sales mark. I believe that 2015 will see over 14,000 homes sold in Charleston again.

As for prices, we hit an all-time high median sales price for residential properties in 2007 of $210,000. That was well above where we should have been at that time, based on my regression analysis. So during the recession, we saw the median sales prices drop back to $183,000. And actually, the values of our homes dropped even more than that. In 2014, we came all of the way back and attained a new record of $221,000 for a median sales price.

However, dollar-per-square-foot prices in individual areas have not regained the 2005 to 2007 levels. Maybe I’ll explain that in a future article. Many people are now afraid that this seems like the crazy times of 2005 to 20077 when things got out of hand. While those prices were wrong in 2007, it has been a full eight years since then and I’ll explain in a future article why we’re actually undervalued right now.   That’s enough numbers for you to chew on until next time.

Doug Holmes is a local Realtor with Keller Williams. He also provides markets analysis for a fee to several hundred local real estate agents. He has a bachelor’s degree in physics and math from the College of Charleston as well as a master’s degree in math from the college, where he still teaches a couple of statistics classes in the fall. Visit his website here.