Lately the news media has indicated we may be at or near the bottom of the housing market crisis nationally. Since all real estate is local, why don't we take a look at what's happening in Crowfield Plantation, Goose Creek, SC, as we head into the fall of 2009.
Most agree that the height of the market was at the end of 2005 (I bought my first house in December 0f 2005, how's that for timing?). We saw a leveling off in 2006, and 2007 marked the beginning of what we now know as a spike in inventory and drop off in prices.
In the summer of 2005 in Crowfield Plantation there were 107 homes sold. The median price of a single family residence was $229,000, and homes were on the market an average of 30 days. Jim Reese, our company manager, says back then if you put a sign in a yard it would sell.
Fast-forward now to our current summer, 2009. Forty homes sold with a median price of $212,900. Homes were on the market an average of 113 days. This represents a 60% decline in volume compared with the summer of 2005 and about a 7% decrease in the median price, with an increase of 83 days on the market. Essentially there are fewer homes selling for less money in more time.
These numbers shouldn't be any surprise. We already know the market's been challenging over the past few years. The big question now is are we starting to come out of it?
Let's take a look at last summer's numbers to see how this year compares.
In 2008 there were 29 homes sold with a median price of $245,000. Homes were on the market an average of 109 days. Notice that from last year to this year sales were up nearly 140% in volume. Good news, right? Sounds like it, but look at the median sales price. It came down from $245,000 to $212,900, which is a 13% decrease in price. Days on the market have increased slightly; it took four days longer to sell this summer than it did last summer.
I believe there are several reasons for Crowfield's decrease in median sales price and increase in sales volume. Last summer move-up buyers came into the market to take advantage of competitive pricing, large inventory and great rates, while first-time home buyers avoided the market because prices had fallen so quickly in such a short amount of time. This year the $8000 tax incentive lured first-time home buyers into the market. Those buyers became the majority of the market, which reduced the median sales price and increased the number of overall sales.
My theory is supported by the fact that actual pricing hasn't changed that much in Crowfield Plantation from last year to this year. Last year we were averaging $106/square foot; this year it's closer to $104/square foot—hardly a 13% decrease in price.
So the question remains: are we at the bottom of this? If we simply look at the inventory trend from the last few years, we see that it peaked in November of 2007 with 145 listings, whereas the highest inventory month in 2009 was August, with 125 listings. Obviously we can't predict the future, but this shows us that inventory has decreased overall, activity has picked up, and as we all learned in grade school, supply and demand drive prices. If the inventory trend continues to go down and sales continue to increase and all else remains the same, prices will stabilize and then start to rise... so it's looking like the answer is a very quiet yes.