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Declining home sales in Charleston??? Is this possible?

Field conditions - what is happening with declining sales?

 So, what’s happening with home sales? Are we really in a strong market?


Absolutely. At least from a seller’s perspective, we are in a very strong market in the Charleston region and in much of the country.
Here’s what is so confusing. While we continue to talk about rising home prices, home sales are FALLING. For the past two months, we’ve seen consecutive declines in existing home sales. That’s right. Home sales are falling not rising. The most recent report by the National Association of Realtors indicates a drop of 3.2% year-over-year for the month of January nationwide with a 1.3% decline across the South. Furthermore, homes are now remaining on the market longer and are taking more showings to sell.
What’s going on?
The explanation is simple. The store shelves are getting bare.
We do not have enough homes to satisfy everyone who is out shopping.  Buyers are in the marketplace looking for their perfect place to call home but, more and more often, that perfect place is elusive. So, they wait - and wait. And the heavy bulk of buyers is pushing home prices northward, complicating the problem even more, as buyers are forced to adjust their pricing expectations.
Overall, is the US housing market is becoming less affordable? Yes.
The median existing-home price for all home types across the US is now $240,500 which is up 5.8% from this time last year.  January is on record for being the 71st month in a row for year-over-year price increases nationwide. The actual inventory available for buyers is now down a whopping 9.5% below where it was just one year ago. And, just one year ago, inventories were already restricted.
Why do we have a housing shortage?
One reason this is happening now is the hangover from builders’ reluctance to build in the recent past. Over the past decade, during a period when the housing industry experienced soft patches, most builders held back on production. Builders today are trying hard to catch up with demand but have a long way to go. Lack of new homes available for sale drives more into the resale market, tightening the resale supply.
Who does this impact the most?
The tight inventory and rising prices are having a clear impact on first-time homebuyers hoping to enter the market. First-time homebuyers now make up a mere 29% of sales. That number may continue to fall as this segment is disproportionately impacted by rising prices due to their lack of real estate equity.
What should we expect as we move forward?
Action by the Federal Reserve Bank is beginning to edge up interest rates. The Fed has taken this action in anticipation of rising inflation, such as the inflation we are now witnessing in the housing market. Ultimately, we will see the Fed actions begin to slow demand marginally while helping to tap the brakes ever so lightly on rising prices.
One piece of good news is that the uptick in wage growth over recent months should help buyers seeking to purchase who have benefited from rising wages.
Over the next year, expect conditions to mirror current conditions. We do not expect any dramatic changes. Inventories will fluctuate slightly, probably expanding somewhat, but not enough to offset demand. Additionally, it is unlikely that changes in interest rates will curb the current strong demand noticeably during the next 12 months.
If you plan to purchase a home soon, be prepared to be aggressive, be informed, and be prepared to act quickly by being prequalified and ready to go. The most desirable homes move quickly. Hire a buyers’ agent to help you in this challenging market. You will be glad that you did.
 If you plan to sell in the next few months, you will have excellent pricing power. To maximize your return, you need to prepare your home, market it well and price it correctly. For your highest probability of maximum return, hire an agent.
If you have any questions about the current market, or any other real estate concerns, call me. The best time to reach me is between 2 PM and 6 PM Monday through Friday.
Happy house hunting - and home selling!
Sincerely
Chris DeLoach
Your Charleston Realtor

843-270-1272

www.primelocationrealestate.com


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Location: Charleston, SC, USA

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