The local real estate industry is beset by the glut of homes on the market. A five- to seven-month inventory is considered a healthy neutral market. The inventory now: 15 months.
At the end of 2007, it was about 10 months’ worth.
With 10,005 homes to choose from in the tri-county region, it is an extreme buyer’s market. The problem is that buyers aren’t making many moves, anticipating a further fall to the bottom. Still others might have trouble accessing lines of credit.
“Would people buy with access to credit? As an economist, I’ll have the answer for you in 10 years,” Hefner said.
A bright spot, inventory is down somewhat from a few months ago, when it peaked at 11,191 homes in November. Because so little turnover has occurred, people presumably are making other decisions about what to do with their homes. The two big options: live in them or rent them out.
“Most people can’t take a loss. That’s why you see rental numbers going up,” said Gettys Glaze, general manager of Coldwell Banker Real Estate and president of the Charleston Trident Association of Realtors multiple listing service.
Despite the sales slump, home prices remained relatively steady in 2008.
The median price of a home sold in 2008 was $203,270, down 3% from the previous year’s $209,742.
Meanwhile, median home prices are up almost 7% from 2005, when home sales were 45% higher than 2008 numbers.
“The current inventory level remains more than double its level on the first day of 2006,” Vince Graham, president of I’On Group, said in a recent 2008 market review. “Prices have not fallen sufficiently to allow the market to begin to clear.” [emphasis added]