The Secret’s Out
It’s no secret, not anymore. Not even 10 years ago Charleston was just emerging as a desirable place to live. Before the revitalization of upper King Street and investments by big employers like Boeing and Volvo, Charleston was a little known city with a deep history hidden away in the South East corner of the nation.
After numerous Top 10 awards from publications like Forbes, USA Today and Condé Nast Traveler combined with the proliferation of social media, Charleston was put on the map as a historical, charming and beautiful southern city. The ante was upped again when TV shows like Southern Charm, Top Chef, and Move-In Ready made a home in Charleston. Ultimately, this secured our place on the national stage as an amazing place to live, work and play.
In turn, the real estate market in Charleston responded. After the 2006-2007 recession the market was a little sluggish, but slowly regained lost ground. By 2015 Charleston real estate activity records were shattered as demand continued to rise rapidly. One statistic came out from the Charleston Metro Chamber of Commerce last year that calculated that on average, 43 people are moving to Charleston every day.
Despite the records that were broken last year, demand remains higher than ever. 2015 represented the 3rd busiest year in Charleston real estate history, yet we are on pace to eclipse that mark this year. Comparing the last 8 weeks of real estate activity (measured by properties under contract) we can see that we are even busier compared to the record year we had in 2015.
Why Its A Seller’s Market
As Boeing expands and the Volvo manufacturing plant is completed thousands of jobs will be created and the economic outlook is positive which means people are moving here for multiple reasons including work, retirement and education. This has created a demand for a broad range of homes in Charleston.
Demand is so high that it is depleting our housing inventory (or supply). When demand is higher than supply, prices tend to increase. When looking at housing inventory, generally 6 months of inventory (MOI) is considered to be a balanced market. However, more than half of the areas in Charleston have less than 6 months of inventory. In fact, around 60% of the MLS areas in Charleston have less than 4 months of inventory. James Island in particular, has the lowest inventory in all of Charleston with around 1.7 MOI.
When there is a limited supply of homes as there is in Charleston, buyers are forced to compete with each other which raises the value of the properties for sale. Many homeowners who were on the fence about selling in the past have recouped everything they lost in the 2006-2007 recession and can comfortably sell their home at or above market price. It is an exciting time for sellers in these conditions.
Off Market Home Sales
Another popular option that we have seen homeowners taking lately is selling their home off-market. This means that they are not listing their home in the MLS, but instead selling their home privately to off-market buyers. In a hot market like Charleston, why would you want to 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.
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.
We have seen a marked increase in off-market sales in the Charleston area. In 2015, 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.
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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