Now that 2009 is officially over it's time to look at what happened and prepare to take advantage of Charleston real estate opportunities in 2010.
2009: What Happened?
The 2009 Charleston, SC real estate market saw the fewest real estate transactions locally of any year since 1998 and the lowest median values since 2004. According to the Charleston MLS 6,452 single family homes sold in 2009 for a median value of $192,500.
Why did the number of homes sold last year dramatically decline? Several factors played a part in this outcome but tight credit, high unemployment and general economic instability weighed heavily on the minds of many consumers and kept them out of the marketplace.
Why did the value of homes decrease in 2009? Record high inventory of homes for sale in Charleston coupled with decreased buyer demand to create a supply and demand imbalance that forced prices down significantly. Motivated sellers were forced to lower prices to attract buyers. Additionally, short sales and foreclosures flooded Charleston with inventory priced well below what would have otherwise been market value for the home.
Government interference in the market has helped to bolster the lower end of the market. Artificially low mortgage interest rates created through the Fed purchasing enormous quantities of mortgage backed securities combined with the First-Time Homebuyer Tax Credit to help entice low end buyers into the market. As a result, lower priced homes maintained their values better. The Federal government did not provide tax incentives for high end home buyers until December 1st and sales of Charleston properties priced above $500,000 remained slow throughout 2009 as a result.
The market strengthened significantly as the year wore on. Last year, homes sales steadily increased every month as homebuyers in all price ranges bought bargain-priced properties. In other words, the widespread price declines did their job by drawing more and more buyers into the market as prices crept lower and lower.
With home sale volume rising and prices declining, Charleston's housing market showed signs of a Recovery Market as 2009 came to an end.