While homes sales dropped -38.8% from 1QT-2008 to 1QT-2009, the reduction in Median sold price was only -11.2% during the same period. The Median sold price increased by 2.5% between first quarters from 2005 and 2009.
The question that everyone is asking is when the market will reach the bottom. There have been some positive indications in recent weeks. CNN reported this week that the a few economists were predicting the economy to bottom within 3 months. Moody’s Economy.com predicts the housing market will bottom out by year end. Other good news from the Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended April 3 increased 4.7% to 1,250.6.
Let's take a look at the first quarter 2009 for the Charleston area market.
Figure 1: 10-Year Monthly Home Sales
The past decade had a 4 year period of stability, 4 years of rapid growth and 3 years of accelerated decline. 2009 first quarter home sales dropped to a 10 year low. First quarter home sales fell below the 1516 units reported in 1998 to 1376 in 2009. Figure 2: 5-Year Homes Sales Quarterly
Over the past five years the first quarter of each year had the lowest home sales followed by the second quarters highest units sold. The 2009 second quarter growth will be an indicator of weather the bottom is in sight. Figure 3: Comparison 1St Qt Home Sales 2005-2009
Home sales fell from 3869 to 1376 (-64%) between 1st Qt 2005 to 1st Qt 2009.Figure 4: 5-Year Volume Sales per Quarter
Volume sales dropped from $978,652,565 in first quarter 2005 to $354,941,995 first quarter of 2009. Figure 5: Comparison 1St Qt Volume Sales 2005-2009
Volume sales dropped -47.6% between first quarter of 2008 and 2009.Figure 6: 5-Year Average List, Average Sold and Median Price
List price, average sold price and median sold price all declined in the first quarters of 2008 and 2009.Figure 7: Comparison 1St Qt 2005-2009 Average List, Sold and Median Prices
From the first quarter 2008 to 2009 the list price dropped -12.7%, average sale price dropped -14.4% and the median price declined -11.5%. Figure 8: Comparison 1St Qt 2005-2009 average sales price as a percent of list price
The percent sold to list price declined in the first quarters of 2008 and 2009 by 0.7% and -2% respectively. The decrease between 2005 and 2009 was -4.3% from .982 to .939.Figure 9:1QT Days on Market Comparision 2005-2009
First Quarter days on market reached 118 in 2009.Figure 10: Comparison 1St Qt 2005-2009 Current Inventory
For the last 8 quarters there has been an inventory of between 11,000-12,000 homes.Figure 11: Comparison 1St Qt 2005-2009 Months Inventory
In the first quarter 2009 there was a 24 month home inventory.In summary the first quarter of 2009 reported the worst start in 10 years, the volume was $354,941,995 down -47%, averages sold price dropped -14.7% to $257,531, the sold to listing ratio dropped -2%to 93.9%, days on the market reached 118 up from 104 in 2008, the current inventory is around 11,000 units and there is a 24 month supply of homes at the current demand.
Overall it is the best buyers market in the last decade offering interest rates below 5% for 30 year fixed mortgages, tax incentives for first time buyers, low average sale and median sold prices, high inventory of new construction, an abundance of foreclosures in all price ranges, and 11,000 sellers motivated to sell their homes.
There have been some positive signs in the housing market recently but I think the housing market will not bottom out until the first quarter of 2010.
