As anticipated, the homebuyer tax credit is having a profound impact on the National Market, both in a good way and bad way.

First, there were upwards of 900 sales in the Charleston Tri-County MLS closed in May, up from about 800 in April, the biggest two months in more than three years.  However, inventory has climbed back to 10,100 units (and now holding stable at that amount for the past three weeks), pendings have declined by 15% in the month of May.  What this latter number tells me is that the market added more homes than the consumption rate in May.  Better stated, we only wrote 493 NET-new contracts in May, as a Tri-County Market.  This means, we'll see a stable June, in terms of closings (due to the final expiration of the tax credit closing deadline), but July is looking very bleak. 

The economists and real estate pundits, throughout the Nation are predicting anything from slight declines in real estate prices to stability.  Almost none see any short-term appreciation.  My belief is that Charleston will see more modest price declines over the coming six months as we adjust to lack of federal support in our real estate market.

Foreclosure activity seems to be at a peak, however not significantly declining.  The level of new foreclosure activity is slightly down from recent months but still at higher levels than the same measurement periods in 2009. 

Bottom line?  Given the international crisis at hand, the volatile stock market, high rates of foreclosures and general anemic buyer interest, any source stating that a recovery of real estate is underway is mere propaganda. 

It's a very price driven market, and besides strong marketing reach on the internet (which we are providing), the insurance for sales success is in pricing.  The properties that are selling are the best priced ones in the neighborhood.

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