The Post & Courier reported today that the median home price for the Charleston Metro Area declined by 2.3% in November to $200,000, and sales volume was 19% lower than November 2006.

This is not surprising given the high inventory levels that we have in most areas. Sellers still had 2005 price levels in mind for the last 12 months, and were "holding off" on price reduction, hoping to sell during the Summer season. These sellers are now convinced that they need to adjust their prices to the current market reality.

It is interesting to note that different areas of the city behave differently: On Daniel Island there is about 2 years' worth of available inventory, while in Goose Creek there is only 4-5 months' inventory. And it follows that price decreases are directly related to the amount of inventory and the absorption of each area. Daniel Island and other high-priced areas have seen the largest price declines in the last 12 months. However, one has to keep in mind that these same areas were the ones that experienced the largest price increases in the preceding boom market!

It is hard to give timing advice to buyers who are waiting for the market to settle. Similarly to picking the bottom of the stock market, it is hard to predict the bottom of the propety market. I tell my clients that, as long as they have a long horizon in mind, real estate is still a safe investment, with the added benefits of getting the use and the tax deductions.

Speculation and flipping are better left to professionals who do that for a living (many of them got burned in the last year)...in the end this market correction will make housing more affordable for first-home buyers, which are the foundation of the buying chain.

I read this article published in Realtor Magazine that has some interesting turnoffs for buyers:

Daily Real Estate News | December 4, 2007

Homes Features That Are Big Buyer Turnoffs
Old homes can be quaint, but there's a difference between old and outdated. Unless home owners periodically invest in upgrades, their homes will fall so far below the standards of current buyers that they become obsolete and hard to sell.

What's obsolete? Here's a list of relics, many of them courtesy of Nick Kuhn, an associate with McEnearney Associates in Washington DC.

• A house with only one full bathroom. Even a house with one full bath and a toilet/sink powder room is going to turn buyers off.
• A house without air conditioning.
• Electrical systems protected by a fuse box instead of a circuit breaker.
• Spiral staircases. They're relatively rare, and for good reason - they're often unsafe.
• Basements with only an outside entrance. Home owners expect convenient access to that valuable space.
• Ceilings that look like they've been stuccoed, dropped ceilings with fluorescent lights, and dark beams cutting across the ceiling.
• The split-level floor plan. Want to go from kitchen to family room? Go down half a flight of stairs. From living room to bedroom? Up half a flight. Most folks would rather not.

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In addition to these, I can add a few, based on my own experience:

• Blown ceilings (at least in Charleston every buyer wants smooth ceilings)
• Dark wood paneling
• Shag carpet
• Garden gnomes
• Small windows (that are usually painted shut)

Don't get me wrong, there are REAL BARGAINS out there (just recently a 2,600 sq. ft. brand new home in Summerville was being offered for $72 per square foot - you probably could not BUILD it for that price, without even counting the cost of the land!