The 2009 Mount Pleasant real estate market continued to be a challenge for sellers and it represented value opportunities for buyers. We are clearly still in a buyer’s market as there is much more inventory than the demand currently supports. More on that later. First, let’s review some of the numbers for 2009:
Mount Pleasant Home Sales Decline Again in 2009
Since peaking in 2005 with 3,144 sales, the number of homes sold in Mt. Pleasant has been steadily decreasing. In 2009, there were 1,161 homes sold in Mt. Pleasant (see the chart below). While this seems low compared to the 2005 peak, it was only a 13% decrease from the number of homes sold in 2008. This was the lowest percentage decrease since the market started to favor buyers in late 2005 to early 2006.
Inventory of Homes For Sale in Mount Pleasant Still High
While the inventory of Mount Pleasant homes for sale is trending downward, it hasn’t fallen enough to have any positive impact on pricing. For example, at the peak of the market in 2005, the number of homes for sale in Mount Pleasant was below 500. At the end of December, there were 1,448 homes for sale in Mount Pleasant. Based on the pace of sales for the 2nd half of 2009, that inventory level represents 13 months of available inventory. So what does that really mean?
More Than 6 Months of Inventory = Buyer’s Market
A buyer’s market generally occurs when there is more than 6 months of available inventory. This means that the buyers generally have more leverage in contract negotiations because they have much more inventory to choose from. This puts pressure on pricing, particularly for those sellers who must sell quickly. Buyers are looking for the right home, but they are also looking for value. As long as competition for buyers remains high, sellers will continue to reduce their prices in order to attract buyers.
Less Than 6 Months of Inventory = Seller’s Market
When there is less than 6 months of available inventory, the seller will generally have more leverage in contract negotiations. Since there are fewer options for buyers to choose from, there is much less pressure on pricing. In fact, prices may even be on the rise in some segments of the market.
Breaking Down the Current Mount Pleasant Real Estate Market
Certain market segments will fare better in a buyer’s market than others. For example, in Mount Pleasant, the market for homes priced above $1M is not faring nearly as well as less expensive homes. Currently, there are 158 homes for sale above $1M. Based on the rate of sales activity for the past 6 months, this represents 63 months of available inventory!! On the other hand, there are only 8.5 months of available inventory for homes priced below $300,000. While still a buyer’s market, this price segment is faring much better! The chart below shows the months of available inventory for all Mount Pleasant homes for sale.
What’s In Store for Mt. Pleasant Real Estate in 2010?
Many of the “experts” in the press are predicting a turnaround in the national real estate market in 2010. I think in most cases, they believe that we will find a “bottom” in 2010. Once that happens, they expect that we will start to see a recovery in pricing. Both of those scenarios are possible, but not necessarily likely. The big question is “What will happen in our market in 2010”? Let’s break it down…
Balanced Market Possible in 2nd Half Homes Below $500,000
I believe it is possible that we could move into a “balanced” real estate market (6 month of inventory) in Mount Pleasant this year for certain price ranges, specifically for the market below $500,000. There is currently about 9 months of available inventory for homes in this price range. If we see a significant increase in demand during the spring, that number could fall to 6 months, or even lower. If this happens, we could see prices in this range start to stabilize, but it’s not likely that we will see prices start to trend upward.
For homes priced above $500,000, it is unlikely that we will see a balanced market in 2010. There is just too much inventory to burn through. So, sellers will continue to feel price pressure for homes above $500,000 throughout the year.
Please stay tuned to this site for regular updates on the Mount Pleasant real estate market as we move through 2010. In the meantime, if I can help you in any way with your real estate needs, please contact me.