Stephanie Davis

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.

OVERVIEW
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.

THE FACTS
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.

THEORY
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.

CONCLUSION
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.

One way to make your listing stand out from the crowd in this market is to offer incentives to prospective buyers. It’s become standard here in the Lowcountry for sellers to give buyers a free home warranty at closing or pay their closing costs. Always the market leader, Carolina One Real Estate has unveiled a new program to help its sellers up the ante in buyer incentives and stand out even more: six months of paid mortgage payments for buyers in the event of job loss.

Carolina One has partnered with The Rainy Day Foundation and Creative Alliances to offer HELP, a mortgage payment protection program. When a qualified home buyer purchases a Carolina One listing where the seller has agreed to participate in the program, the buyer will be covered by the program for a period of two years after closing. During that time, up to six monthly mortgage payments (no more than $1800 per month) will be paid on behalf of the buyer should the buyer become involuntarily unemployed and is eligible for unemployment benefits.

This is just one more reason to buy and sell with Carolina One, Charleston’s real estate market leader. For more information on this program, please call me at 843.574.3193.

Used to be – and I say that with all my two years of real estate experience – use to be that once a buyer and seller agreed on price and terms, closing would follow about 30 days later. However, now that short sales, foreclosures, government assistance programs, and bad credit have become more the norm than the exception, closing dates are getting pushed further and further out. In my own business, for example, three closings scheduled for early June have all been postponed to later in the month.

One of my client couples, more than qualified to purchase the home they found, struggled to get financing for the home because we couldn’t find a bank that offered a loan product to match the timing of their occupancy (18 months after closing). Once we found a lender with the right loan product, the inspection revealed a laundry list of repairs that had to be made on the property. Buyer and seller agreed to extend the closing date four days to accommodate the repair list. This may not sound like a big deal – four days – but when you’ve got everyone making arrangements to meet a specific date and then the date gets changed, it causes a chain reaction that affects just about every aspect of the move for both the buyer and the seller…

Someone’s gotta check with the lender to be sure the rate lock won’t expire, which could cost the buyer a boatload of money they don’t have. Gotta check to make sure the termite letter hasn’t expired, which lasts only 45 days. Gotta call and rearrange the movers, and cross fingers their schedule lines up with the new moving day. Gotta get the attorney’s schedule and make sure they have a time available to close on the new date that also matches up with the buyer’s schedule, the seller’s schedule, the bank’s schedule, and the schedule of two real estate agents. Gotta call the utility companies – again – to reschedule the on and off dates, which may or may not carry a fee. Gotta alert the home owner’s insurance companies on both sides that there’s been a delay. Gotta make sure the seller’s employer – and the seller of the house they’re buying – will wait. Gotta make sure the buyer’s buyer will wait if they had a house to sell, since they too will have to rearrange a million things on their side. Gotta extend leases, extend POD contracts, reschedule friends who said they’d help unload the truck. And on and on.

Contract to closing on that house: 4/15/09 to 6/5/09, or 51 days.

Another closing that’s been delayed is a short sale. (Big surprise.) These typically take some time, so we allowed for that in the purchase contract. Contract date was 4/22/09, original closing date was 6/8/09. Buyer and seller were happy as clams about the deal, they moved forward with inpsections and repairs and the loan, etc. Meanwhile I hired a short sale specialist to negotiate with the bank since I know it takes just about all the energy a person has to harrass them enough to get a response, much less approval on a short sale. I also helped my seller complete his hardship package, and launched an endless campaign of market reports, data analysis, showing trends, solds comparisons, neighborhood traffic, and more to convince the bank the offer we presented was the best they could hope to get. We received approval from the bank last week, which didn’t give the buyer’s lender enough time to complete the loan for closing on the 8th. We are now set to close on June 16. Not bad for a short sale, but we still had to really hold the buyer’s hand to keep him from shopping for another house since his family is out of state and his apartment lease is set to expire next week with the original contract. Here again, moving closing 8 days doesn’t sound like much, but it was.

Contract to closing on that one: 4/22/09 to 6/16/09, or 55 days.

The third closing I’ve managed to hold together involves a foreclosure (so a bank), a first-time home buyer, and a state housing assistance program. The buyer’s budget was low and she was looking for a great deal (who isn’t?). We found a nice house owned by Citigroup and made an offer. This bank has been great. They replaced all the carpet for us, they painted, tore down wallpaper, serviced the HVAC unit, fixed the hot water heater, etc., etc. Because of the state program we knew when we wrote the contract that the closing date needed to be at least 60 days out. We wrote it on March 31,2009 to close on June 1, 2009. We completed our inspections, the lender moved forward with the loan, we completed the state’s list of paperwork to comply with the grant money procedures, and then we waited. May 6 everything was done on our end, including the lender’s appraisal, and we’re still waiting. Similar to a short sale situation I’ve called the program director, I’ve e-mailed her, I’ve called the lender, the attorney, the buyer is a wreck, and there was NO ANSWER as to when the state could complete their inspection so we could get the grant money and close. Closing date came, and finally we learned the inspection will be Thursday morning. We filed an extension (I’m getting real good at that) with the bank, hoping to get them to hang in there with us just a little bit longer. We’re set now to close June 12, but with no response yet from the bank, we’ll see.

Contract to closing on that one: 3/31/09 to 6/12/09, or 73 days.

Funny thing is, none of these three closings have actually happened yet! They could all get delayed again. Let’s hope not, but they could. Good thing I’m still calling and e-mailing everyone like a mad woman. If there’s one thing I’ve learned about this crazy real estate business, Yogi Berra said it best: “It ain’t over til it’s over.”

There's a new Web site out there to help home buyers organize, share, and discuss their online real estate search. This site provides a central location where users can collect and consilidate all the homes they like from different sites around the Web. They can also share the listings with friends, family, and their real estate professional. Sign up is FREE and truly provides a one-stop control center for home buyers.

Sign up for your free Dwellicious account here: http://dwellicious.com/agentinthecreek/signup

Or click on the tiny little Dwellicious logo:

Happy house hunting!!

Last week I helped my buyer client write an offer on a bank-owned, foreclosed property. We set the expiration of the offer at 5:00 Friday afternoon (last Friday). We wrote the offer on Tuesday (last Tuesday). The bank set the listing price. The bank should know what they are willing to accept for the property, right? This is not a short sale, so there should be MUCH LESS red tape to cut through to get the ball rolling, right?

That was my thinking when we wrote the offer.

Well, here it is, Tuesday, seven days after we made the offer. Two business days after the offer expired. The listing agent/team works exclusively with banks and warned me when I sent the offer that the banks don't look at offer expiration dates but that they (the listing agent/team) would respond to me as quickly as they could get the bank to respond.

Don't look at offer expiration dates?

Now I know the banks have mountains of paperwork these days between foreclosures that need listed, late mortgages that are going to sale, restructures, refinances, short sales, etc., etc., etc. I don't envy them at all. But that doesn't give them a right to make up their own rules as they go along!

My attorney friends tell me the banks don't want the houses - they would prefer to collect the money they loaned for the house instead. Well here is a perfectly good offer on one of the houses they don't want - and they have let the offer expire.

Unfortunately, my buyer really wants the house, so there's little we can do but wait. Withdrawing the offer won't get us the house, making a new offer will start the clock ticking all over again, and walking away won't get us the house. So we wait.

And wait.

And wait.