Four Things Buyers Want in Charleston SC’s Real Estate Market

Charleston’s real estate market has seen more changes in the past ten years than in the fifty years before that.  From incredible affordability in the early 2000’s, to tripled and quadrupled prices around 2005, to the current drop in prices (some people have compared today’s prices to those in 2003 and 2004), the local real estate trends have changed drastically along with the prices.

In the current Charleston real estate market, most buyers are looking for one of four things (or a combination of these).

1)  Short sales and bank owned properties:  In Charleston, these have been in high demand all year.  However, in the past month or so, we’ve seen a shift away from this as many buyers are getting frustrated with the series of hoops that they have to jump through in order to get the home that they want.  Other markets around the country may not have seen this shift yet, or they may not ever see it.  But in Charleston’s market, this has been one of the most recent changes.  You’ll still find a lot of newer buyers looking specifically for these properties.  But, many of the older buyers who have been waiting for months and months to close are now looking for alternatives, which leads to the second point.

2)  Homes that can close quickly:  This trend in Charleston’s market is coming from two types of buyers.  First, the ones who initially tried the short sale route with no success are now looking for homes that they can actually close on.  Because only a fifth of short sales actually close, and because it can take up to 10 months to close on these homes, we’re seeing a huge fallout of these buyers who are tired of waiting on contracts that were ratified at the beginning of the year (and even the end of last year).  The second group of buyers looking for homes to close quickly are those who had a home to sell before they could buy another.  Whether they’re moving up to a more expensive house or they’re relocating to Charleston, their current home has finally gone under contract and they’re now able to make an offer on their next home – and they need to have the two closings take place within a few days of each other.

3)  Distressed properties:  When I say distressed homes, I don’t necessarily mean a seller’s financial distress – as in short sales.  Instead, many buyers are looking for fixer uppers in areas that have previously been too expensive for them to buy in.  When prices got so high around 2005, many buyers opted for the cities further inland, like Summerville, Goose Creek, Hanahan, North Charleston, and Ladson.  Now that prices have come down, buyers are able to purchase homes in areas that they really want – areas that are more conveniently located to downtown Charleston and the beaches (Mt. Pleasant, James Island, Johns Island, and West Ashley).  Many of these buyers have the mindset that if they can go ahead and buy a home in the city they want to live, they can always make improvements to it later (such as updating a kitchen, getting new flooring, etc.).

4)  Rent to own:  Unless you’ve been living on a remote barrier island for the past year, you’ve heard from multiple sources that it’s a good time to buy real estate right now.  Everyone knows this and wants to take advantage of the good prices, but not all potential buyers can afford to buy right now.  After going through foreclosure, many people need a new place to live but don’t have the credit to buy.  Still, others don’t have enough money saved up for a down payment.  Regardless of the reasons, many people want to buy a home but can’t.  Hoping for a brighter financial outlook in the future, these potential buyers want to go ahead and secure a home once they’ve found one that they like.  Since they can’t afford to buy right now, they enter into rent to own (also called lease to purchase) options.  Most of the buyers who choose this route don’t know that these situations usually benefit the seller – not the buyer.  In the buyer’s market that we’re experiencing, it would be better for these buyers to simply rent for a while until they’re able to purchase.  At that point, they can compare homes that are for sale and find the best deal rather than be obligated to buy a home that has not been priced competitively.