Yesterday we attended the 2018 Year End Market Review hosted by the Charleston Trident Association of Realtors at Trident Technical College. The event was well attended hosting over 850 Realtors. The events main speaker, Dr Joseph Von Nessen, an economist with the University of South Carolina, spoke about an “economic tug of war” that existed at the end of 2018 and continues into the beginning of 2019. The tug of war is between the positive indicators of wages and job growth with the negative impacts associated with the government shutdown, a global slowdown, and a trade war with China. The outcome of this tug of war—especially the expected outcome in early March of the trade agreement with China—will be a determining factor for our state economy that relies heavily on manufacturing and exports. The South Carolina unemployment rate is currently at 3.3% which is less than the national average of 3.9%.
The recent economic uncertainty also had an impact on national pending home sales causing them to decline in December of 2018. Lawrence Yun, the chief economist of the National Association of Realtors in a statement online yesterday said: “The stock market correction hurt consumer confidence, record high home prices cut into affordability, and mortgage rates were higher in October and November for consumers signing contracts in December.” *1
Dr. Von Nessen pointed to this data as potentially temporary economic indicators. He noted that we are currently in the 10th year of the longest economic expansion since World War II. If we continue along our current trendline, Dr Von Nessen predicts that the Dow jones industrial average will reach 30,000 by 2023. Dr Von Nessen and Lawrence Yun have encouraged their audience to look at economic data over the long run, instead of focusing on short term volatility.
Despite the uncertainty on the national level, 2018 was still a strong year for the Charleston real estate market. We’re sharing with you below all the important info and stats from this previous year.
In 2018, the Charleston Trident MLS saw 18,159 closed sales. This number is down by 1.4% from 2017’s 18,410 closed transactions. The top 5 areas in 2018 that showed the most positive change in number of closings from 2017 were: Sullivan’s Island, Johns Island, Seabrook Island, Dorchester Road Corridor and the Edisto area. The bottom 5 areas showing negative change from 2017 are: Isle of Palms, Folly Beach, Greater North Charleston, Hollywood/Ravenel/Meggett area, and lower Mount Pleasant.
Inventory has been the biggest concern in the Charleston market for several years. Since 2014, the inventory has been decreasing each year, making Charleston a sellers market, all while the number of closed sales has been trending upwards. We ended 2018 with a total of 5,109 homes for sale, that is down 5% from 2017’s year-end inventory of 5,376 homes for sale. The top area for inventory change in 2018 was Hanahan, up by 28.8%, followed closely by Kiawah Island, Wando/Cainhoy, Upper Charleston Peninsula and West Ashley.
Average Sales Price
2018 reached the highest average sales price seen by the Charleston tri-county area at $360,210. 2018’s average sales price number is up by 5.9% from 2017. The top area for change in average sales price from 2017 was Kiawah Island, which increased by 21.7%. The median sales price for 2018 was $266,500, which is an increase of 6% from 2017.
Days on Market
The average number of days on market (DOM) for a home until a sale in 2018 was down by 5.5% in 2018, making it 52 DOM. In 2017 the average DOM until sale was 5.2%. The largest change in the number of DOM in the last 4 years was seen when 2014’s average was 80, and decreased by 25% in 2016 to just 60 DOM. The area that had the greatest change in DOM was Daniel Island, which increased by 45.9%. Isle of Palms had the greatest decrease in DOM, decreasing by 22% from 2017.
Percentage of Original List Price Received
When a homeowner lists their home for sale they hope it’ll sell for the number they have chosen to list their house for. However, sometimes home sellers will have to reduce their price during the course of the listing. The percentage of original list price received statistic refers to the original price the home was listed at, and not what it was reduced to. On average, in 2018, home sellers received 96.6% of the original list price, this is a .1% increase from 2017’s 96.5%.
At one point in time the market had many distressed sales (foreclosures, short sales, bank owned, etc.), and each year the number of distressed properties has slowly tapered off. There are still a handful of short sales and foreclosures though that do hit the MLS, although not as many as there was one point in time. In 2018 only 4.9% of closed sales were distressed property sales, that number is down 14% from 2017. The top area for distressed market share in 2018 was Folly Beach (27.8%), followed by Hollywood/Ravenel/Meggett (10.2%), and James Island (7.5%).
****PLEASE NOTE: A property is counted as Distressed when the SPECIAL field in CTARMLS is marked as "Lender Owned," "Corp Owned" or "Possible Short Sale,", or if the POTENTIAL SHORT SALE field is marked "yes," or if the REMARKS or AGENT NOTES fields contain a phrase that 10k Research has determined will very likely mark a distressed property.
The peak of new construction was in October of 2017, at the end of 2018 there were 3.9 months supply of new construction product on the market in the Charleston tri-county area. In new construction, 99.5% of the original price was received when a new home closed. The top 3 areas for new construction market share in 2018 were Johns Island (45.2%), Goose Creek/Moncks Corner (35.9%) and Wando/Cainhoy (30.1%).
We’ll breakdown each specific area in separate reports over the course of the next several weeks, but to start we wanted to give you a thousand foot view of the three counties that make up the Charleston tri-county area.
Charleston County had 8,990 closed sales in 2018, down by 4.9% from 2017. Of those, 17.5% were new construction, 24.6% were condos and townhomes. The average days of market was 56, with 95.9% of original list price received when a home closed.
Berkeley County had 4,800 closed sales, down 1.4% from 2017. 21.1% were new construction, 17.8% were condos and townhomes. The average days on market was 44 and 97.9% of original list price was received.
Dorchester County had 3,579 home sales, an increase of 3% from 2017. 20.2% were new construction, 10.5% were condos and townhomes. The average days on market was also 44, and 97.6% of original list price was received.
The Charleston area as a whole had 18,159 closed sales, down 1.4% from 2017. 21.1% were new construction, 17.8% were condos/townhomes and the average days on market was 52, with 96.6% of original list price received.
Areas with the Most Sales
The area with the highest number of closed sales was Goose Creek/Moncks Corner. Goose Creek/ Moncks Corner had 3,324 closed sales, down 2.2% though from 2017, with 36.4% being new construction sales and just 10% being condos/townhomes.
The second highest number of sales was recorded in the Greater Summerville area with 2,302 closed sales, up 3.4% from 2017. 19.1% were new construction, and 7% were condo/townhome sales.
The area with the third highest number of sales was the West Ashley area with 1,774 closed sales, down 5.4% from 2017. 13.1% were new construction sales, and 24.2% were condo/townhomes.
In 2017 these were also the 3 areas showing the most sales (in the same order).
Areas with the Least Amount of Sales
Sullivan’s Island had the least sales in the Charleston Trident MLS in 2018. Sullivan’s Island had only 64 sales, which was up 8.5% from 2017. The average days on market for this area was 77, and 93.7% of original list price was received.
The second area with the least amount of sales was St. George/ Rural Dorchester County. This area showed 69 closed sales in 2018, which is down 2.8% from 2017. Average number of days on market in this area was 74, with 93.9% of original list price received.
And lastly, the third area with the least number of sales was Kiawah Island with just 72 MLS sales. This however is a 10.8% increase from 2017. The average number of days on market was 176 and only 89.9% of original list price was received.
Much like the numbers above in the areas with the most sales, this category has the same 3 areas from 2017. The difference in 2018 however, is that Kiawah and St. George/ Rural Dorchester County switched spots, with Kiawah showing an increase in sales.