Brace Your Buyers for Higher Home Prices

Home prices throughout the Charleston, SC metro area are on the rise, some at the fastest pace ever. Home buyers need to move in quickly while there is still a decent supply of affordable homes and interest rates are still historically low.
West Ashley Avondale Point sign Jim Bobo
If buyers haven’t already purchased in the iconic Avondale District, they will definitely be paying more – a lot more. Prices in some of the District’s neighborhoods are above their 2007 peak average selling price. Yes, above the peak. And this is trending just about everywhere close-in to Downtown Charleston.  The closer to Downtown Charleston, the faster prices are trending upwards.

June 2013 median home sale prices on James Island are up only 6.4% year over year.  And there is still a supply of affordable homes.

June 2013 median home sale prices on James Island are up only 6.4% year over year. And there is still a supply of affordable homes.

James Island is beginning to see some solid recovery of prices, too, but not nearly as wild as in Avondale.  One home in Stiles Point is set to close and set a new record sales price for any home on the street since the neighborhood was originally built in the 60′s.  Looks like Stiles Point has been rediscovered. Road improvements following the new Stiles Point Elementary School building, plus the additional traffic while Harbor View Elementary occupies the old Stiles Point building, have certainly drawn more attention to this neighborhood where you can walk your children to one of the best elementary schools in the State and still get a good deal on a 3 bedroom, 2 bath ranch home on a 1/2 acre lot – if you’re willing to deal with the updating that many older homes need but that most buyers today simply don’t want to tackle themselves.

You can read the Charleston Trident Association of Realtor’s update by clicking here.

Below is a National report about home prices and affordability from DAILY REAL ESTATE NEWS | MONDAY, JULY 29, 2013

Home prices are rising across the country and the prices for new homes in particular may increase significantly in the near future. Economist Bradley Hunter with Metrostudy told The Chicago Tribune that he predicts newly-built homes could see a 9 percent increase in price by the end of the year.

“Here’s what’s happening: Land values are going up very fast right now in prime locations, what we call the ‘A’ locations,” Hunter explains. “In the best A (and B) markets, we expect prices to rise by 11 percent to 15 percent. Builders are desperate to buy lots, which in some cases are 30 percent to 50 percent higher than last year.” The “A” and “B” locations, as Hunter refers to them, tend to be closer to the center city—near jobs, retail, and services.

Hunter does see some relief for those looking to buy in the coming year, however.
“I think the builders are going to have to come to grips with a new affordability mentality,” Hunter says. “They’re going to have to reckon with these forces — rising mortgage interest rates, mainly — that are going to limit how much they can raise prices. That’s why 10 percent to 15 percent price increases will become 3 to 6 percent pretty soon — in six to 12 months. It depends on when mortgage rates move higher. If they go up, say, by 2 percent or 3 percent, it will have a noticeable impact on what people can afford and therefore on what builders are offering.”

Source: “Builders navigating complex housing market,” The Chicago Tribune (July 26, 2013)

Jim Bobo Real Estate can help you find that great deal – give us a call!

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
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