Mike's Montage Message

As another month closes and a new one begins I wanted to quickly follow up as I seek to stay in touch and provide an update on the metro Charleston real estate market.

In brief home-buyers continue to turn out in force despite a serious inventory shortage in key price points. Last week saw more than 500 properties go under contract yet again. There have only been three weeks ever in our local market where more than 500 properties have gone under contract, and the last three weeks comprise all of that total.In seeking to provide cliff note thoughts here are the main points  I would like to  communicate as follows:.

(1)  The last seven weeks are the best seven weeks our market has ever seen in terms of ratified contracts. The bottom of the market aka the curve appears to have been about 12 weeks ago.

(2) The rate of increase in year over year sales continues to remain very high. It takes a second to grasp what this means...yes the last seven weeks have been record weeks...and the degree to which each week this year is outpacing the same week last year has increased and held steady for three weeks. In other words...the market like the weather is hot...and strengthening.

(3) The Charleston Trident Multiple Listing Service (CTMLS) is now "up" year over year in ratified contracts.

The CTMLS is now UP 4.2% year to date versus last year in ratified contracts - and last year was one of the best years ever in the CTMLS. This is amazing given all that has happened this year.

(4) Inventory shortage continues to prove challenging. there is a need for more than 3,600 additional listings market wide to achieve a balanced market (6 months of inventory). The gap between the number of listings available for sale and the number of listings needed to maintain a balanced market is growing each month. 

If you are a prospective seller debating whether or not this is a good time to put your home on the market, I believe the answer is "yes" because demand is at sustained (so far) all time high and supply is well below where it needs to be to meet the current demand. This doesn't mean you can be detached from reality with pricing - the price/value must be compelling to a prospective buyer.

This conversation is always highly dependent on the part of town and price range being discussed, but there is absolutely a need for more inventory based on current activity levels. Generally speaking, the closer the price point is to "entry level", the greater the need for inventory and as the price point increases, the need for more inventory becomes much less.

There is no question in my mind that whilst we are seeing record levels of activity this would be even greater if there were a few thousand more listings in the entry level and "first move up" price points were also available for sale!

(5) The fall through rate of ratified contracts has returned to a normal range*. It appears the elevated fall-through numbers that we saw in April and early May has now passed. *FYI the normal range for this number is between 12% and 18%.

(6) New construction represents roughly 37% of all pending contracts in the MLS. This is a very high number. Normally this number is around 25%. Again if thinking of selling then keep this in mind namely new construction is your competition. I have proven marketing strategies that will position you to market with a better than new message to prospective buyers! 

(7) Keeping an eye on the future factors to consider:Unemployment remains extremely high and this may eventually come home to roost - although the jobs report a few weeks was extremely encouraging - along with May retail sales numbers!The process of easing restrictions has paused and there appears to be a movement to re-tighten restrictions as cases have predictably spiked after the economy has been partially opened back up locally. Many businesses and households that were hobbled by the first shutdown would be finished off by a second one.

There are large numbers of mortgages that are delinquent nationwide. I do not have good data locally. With very generous "no proof of hardship required" forbearance measures in place, it is hard to know how many of those delinquent folks are simply gaming the system and how many have a legitimate need. It is also impossible to know how many of those with a legitimate need will regain employment before forbearance ends. I suspect that while the number of delinquencies is very high, the "cure rate" of those delinquencies will also be very high.

Time will tell but the upside is already seeing individuals leave the big cities to explore a better lifestyle that already exists here in the tri-county area! In role as a community connector how can I be of best help in offering solutions thereby enabling you to fulfill your real estate goals.Adopting an holistic approach based on forging closer work relations how can I help? 

Email or call me on my personal cell at 843 -906-9969 at anytime except of course when I'm taking new listings showing properties or negotiating contracts whilst securing best terms for my clients aka my raving fans-lol

Gaelic cheers!

MC aka US SCOT