2015: A Historical Year for Charleston Real Estate
2015 went down as the 3rd busiest year in Charleston real estate history as 15,000 homes were sold. The median home sales price rose 5% to around $235k in 2015, but many areas around Charleston saw a 10% gain in value or more. 2016 looks to be more of the same, albeit at a slightly slower rate of appreciation. A few key interest rates edged higher, but mortgage rates still remain under 4.5% which is a big driver of demand right now.
Demand has kept inventory low, with many areas possessing less than 3 months of inventory, meaning sellers are in the drivers seat. Buyers coming from the Multiple Listing Service are forced to compete with each other when supply is limited which drives the price higher.
Off Market Sales And Investment Properties
However, another route that homeowners took in 2015, particularly in Charleston, was selling to buyers or investors before their homes hit the market. These “secret listings” are considered “off-market” or “pocket listings” meaning they are not listed in any of the Multiple Listing Services. Most of these deals are done through a network of luxury real estate agents that specialize in matching buyers and sellers in these exclusive deals. In 2015, we (Matt Anderson Properties) sold over 20 properties that were off market and 40+ in total sales all around Charleston including the Old Village, historic downtown and the Isle of Palms. These numbers represent a significant jump compared to a year earlier. Off-market deals in hot real estate markets make up 15% of total sales in some cases, which is significantly higher than the past few years.
In A Hot Market Like Charleston, Why Would You Sell Your Home Off Market?
Conventional wisdom suggests that if you want to sell something, you want as many people to see it so that it creates competition and demand among buyers, raising the value of the product. In off-market deals buyers are paying a premium to close a deal without competition and in confidentiality. In some cases the homeowners never intended to sell, but were approached with an enticing enough deal that it made sense financially.
Off-market sales are more popular in the high end, luxury market, but similar deals can be done at all levels. Sellers find it convenient for several reasons. For one, there is no time constraint. Both parties can craft a deal that suits their needs. For example, a buyer could allow for a flexible time table for the seller to find and close on a new home before completing the deal. Or vice versa, the seller could offer as much time as necessary to get any desired home inspections done before the buyer enters into the contract.
Sellers can also take advantage of reduced preparation costs because they avoid expenses related to required home inspections, pest inspections and home repairs. They also avoid the inconvenience of having prospective buyers continuously looking through their home while it is listed on the MLS.
In rare occasions the buyer and seller may know each other and opt to complete the purchase without a real estate agent, however this is not recommended because real estate transactions are complicated and can be risky. Hiring a local real estate agent who knows the market can ensure proper valuation of the deal through a professional market analysis, uncover any flaws in the contract and also bring peace of mind to the whole deal.
Like any purchase, off market transactions are not without risk. You should always consult a real estate professional before entering into any form of real estate contract.
If you are interested in exploring some of the off-market deals in Charleston or are considering selling your home you can contact me anytime. If you just have questions about the buying or selling process, please contact me directly and I would be happy to answer all of your questions.
Email: [email protected]
Phone: (843) 437-8386
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