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Charleston Market Close to the Edge of Collapsing

09/14/2024 by billbyrd

Is the Charleston Market Close to the Edge of Collapsing? In this September 2024 Charleston Real Estate Market Update we are going to investigate the national numbers. (Charts with Black Background) Then take a look at the local numbers affecting the market. (Charts with a White Background)

Micro-Market

It’s important to understand that the Charleston Real Estate Market is what is considered a micro-market. A micro-market is one of many markets that make up a much larger market within the real estate market. And, with that said, each neighborhood has its own market dynamics that affect the sales in that area. However, you will notice is that the local numbers in the Charleston area look similar to the national numbers. So, let’s take a look and see if the Charleston market is close to the edge of collapsing!


Charleston Home Search

Inflation

First let’s look at the Bureau of Economic Analysis recently published numbers on inflation. Some of this may be surprising to you and some of it may not be.

Since the Fed began its process of raising rates, they have effectively lowered inflation. However, some of the impacts of this are still lingering in our everyday world of personal consumption. The following charts from the Bureau of Labor Statistics offer an interesting look at some of the impacts we are dealing with.

It’s not all bad news. Some items that have dramatically risen due to inflation. Then have begun to fall in 2024. And, I’m sure we can all agree they are not falling fast enough!

According to the Bureau of Labor Statistics, many of the goods and services we rely on everyday are still rising!

Interest Rates

The general consensus is that the Fed has cooled the economy enough and will soon begin to slowly reduce rates. Below is a chart of the history of our interest rates on mortgages. Still below the historical average between 1972 and 2023.

As we consider whether the Charleston market is close to the edge of collapsing, two things that are important when we look at mortgage interest rates. The rising rates have reduced the amount of home a homebuyer can buy. Second, folks that bought a home when the rates were low, are less interested in trading up their home. Many people are reluctant to give up their current low-interest rate mortgage for a higher rate loan. This dynamic has slowed the number of sales by reducing the number of homes coming to market. This low supply has ultimately caused home prices to continue to rise. So now, home buyers are buying higher priced homes and paying higher mortgage rates too! But rates are still well below the historical average between 1972 and 2023.

Buyer’s that wait for rates to go down may end up paying a higher price for a home. Thus, possibly negating any perceived savings by waiting for lower rates.

So, is Charleston Market Close to the Edge of Collapsing? There is more to the story!


Affordability

It is currently more expensive for a homebuyer to buy a home now than it was before the housing crisis.

Unlike the events that led up to the housing crisis, 76% of all households now have more than 50% in Home Equity! During the housing crisis many homebuyers were over leveraged into adjustable rate mortgages with very little equity. So, when their rates adjusted upward they had little equity to absorb the loss in value when market turned down. Many homeowners had to sell at a loss, selling “short”. Sellers either lost their homes to foreclosure or had to sell as a “short sale”. So, is the Charleston Market Close to the Edge of Collapsing today?

According to the experts, rates are going to come down a little!

Many experts don’t expect a return to low 3% interest rates, but they do expect some easing. Maybe into the 5% range. Knowing that rates will soon come down somewhat, a buyer can always buy now and refinance later.

An important reason to buy now before rates start dropping, is that as more buyers come back into the market, the supply of homes will likely decrease. This reduction of inventory and increased demand will drive home prices up! Couple that with local development constraints, builders won’t be able to build enough homes as demand comes back. So, a buyer that waits for rates to go down may end up paying a higher price for a home. Thus, negating any saving in interest by waiting for a lower interest rate.



National Home Prices – Charleston Market Close to the Edge of Collapsing

In the following chart, you can see if you bought and held long term, buying a home has been a great investment! Even if you bought at the absolute top of the market before the 2007-2009 housing crisis, your property still has dramatically appreciated!

Looking at recent home sales in the following chart, the number of home sales have been trending down since 2022.

Between 2022 and 2023 the numbers of sales nationally dropped significantly. In 2024 the projections are that the market will improve slightly, but only minimally.

Looking at both the chart above and below, you can see that the national market and the local Charleston market look similar! However, the local number of sales have not pulled back as far as the national numbers. As you see the national numbers have pulled back to the markets bottom after the housing crisis. Localy, we’ve only pulled back to the pre-covid era levels. During the pre-covid era the real estate market in Charleston was a very balanced market. A balanced market is one where supply and demand are roughly equal.

Local Home Sales and Inventory – Charleston Market Close to the Edge of Collapsing

Get Your Home Value Here

Locally sales have tapered off since the height of the covid era “great migration” in early 2021 until now. It’s important to note, the covid era migration patterns were an anomaly. As well as the market they created for home sellers. Many experts feel that this unique series of events created an abnormal market of dramatically rising prices. A market that is now beginning to slow down some what.

sales have tapered off since the height of the covid era "great migration" is the Charleston real estate market on the verge of collapsing?

Evidence of this winding down can be seen in the increasing number of homes on the market. And a slowing of the rate at which they are selling.

Homes inventory is increasing. Is this a sign that the Charleston real estate market is collapsing?

In Conclusion – Charleston Market Close to the Edge of Collapsing

In conclusion, I don’t see our market crashing and prices dropping dramatically however, we are currently tapering off somewhat. As rates come down, we will see more buyer demand. Depending on how many homes get listed for sale, we may see prices continue to push higher.

What Could Derail the Market?

The Election

I’ll leave this subject to others! However, just like to Wall Street, I think real estate prefers divided government too!

War

In my opinion, I believe the real estate market here locally will continue to stabilize into a more normal market. I also feel we can expect reasonable price appreciation per year. However, if a wide world conflict starts all bets are off!

The Economy

An improvement in the economy will always help real estate, less regulation and lower taxes will help consumer sentiment. When people aren’t confident in their personal financial lives, they tend to put off major decisions like home purchases. It’s well known that real estate sales are a leading indicator of the economy. A robust real estate market will drive sales in other industries. A healthy real estate market will lead to a healthy national economy.

So, no the Charleston Market is not Close to the Edge of Collapsing! We are simply in a transition into a more balanced and normal market. One where the best-looking homes that are priced right will still sell to the motivated buyers in the market. Some areas and price ranges will do better than others. For the best results, its always important to hire an experienced agent to help you market and sell your home.


Disclaimer of Sources – Charts with the black backgrounds in this post were taken from the Keller Williams Realty 2024 Vision Speech and from the 2024 KW Mega Camp Market Update. Data was compilied from numerous sources by the Keller Williams Realty Economic Research Department. Including: Bureau of Economic Analysis, Bureau of Labor Statistics, National Association of Realtors, Robert Shiller, US Census, Freddie Mac and Core Logic. Charts with the white backgrounds in this post were provided by the Charleston Trident Association of Realtors MLS.

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Copyright 2023 All Rights Reserved – It is unlawful to reproduce without permission.

Filed Under: Area Information, Home Buying Information, Home Seller Information Tagged With: Charleston, Market Report

Top 5 Reasons to Sell Your Home Before the New Year

11/17/2022 by billbyrd

Why go through the hassle of selling your home during the holidays? Here we will dive in to the Top 5 Reasons to sell your home before the new year! Every year in the late fall we have the same conversation with folks considering selling their homes. Typically, it always comes down to the question: when is the best time to put the home on the market?

Top 5 Reasons to Sell Your Home Before the New Year

Top 5 Reasons to Sell Your Home Before the New Year!

#1 You’ll Make More Money!

Sold in 1 Day During the Holiday Season - Top 5 Reasons to Sell Your Home Before the New Year

It’s a fact, most people don’t want to put their home on the market during the holidays. However, when you do, you will have less competition from other sellers in the neighborhood! Less competition from other motivated sellers means buyers will pay you more for your home!

#2 You’ll Attact The Highest Quality of Buyers!

The highest quality buyers look for homes during the holidays. Experienced agents know you’ll have fewer looky-loo’s and neighbors pretending to be buyers during the holidays! Only the motivated look at homes during this time of year.

#3 You’ll Save Money On Your Next Home!

90% of all home sellers during this time of year will put off listing there home until after the holidays. I can’t tell you how many times in my career I’ve heard, “we are going to wait until after the holidays to list”!

So, after the holidays, every year, the market is flooded with new listings. All of which compete for the same pool of buyers!

So, if you sell your home before the new year, you’ll have first pick of all of the new inventory hitting the market in January! Being a non-contingent buyer, puts you in a great position to be aggressive with your offers.

Fewer people will have sold their newly listed homes in January and will have to write contingency contracts on the sale of their newly listed homes! Which you won’t have to do, giving you a competative edge!

#4 Homes Show Better During The Holidays!

Homes typically show better and look great in photos when decorated for the holidays and have festive feel! The atmosphere of giving and joy, makes folks a little more nice and generous during the holidays.

Wouldn’t a full price contract on your home make the holiday just a little nicer?

#5 Market Trends Are Deteriorating!

The current interest rate forecast is for rates to move higher. While home prices are forecast to move lower! It is projected that rising interest rates will continue to put downward pressure on prices, the sooner you sell, the more you will get!

Keep in mind that for every 1% increase in the interest rate, a homebuyers loses 10% in buying power! Ouch!

Experience Drives the Best Decisions

Having sold homes since the 1980’s I have discovered these Top 5 Reasons to Sell Your Home Before the New Year! Of course, there are several other good reasons, but I wanted to give you the best top 5 Reasons to Sell Your Home Before the New Year!

The goal is to share some great ideas to help you make the best decision for you in your current situation. And we are certainly available to answer any of your questions or concerns about the market and how it could affect your bottom-line!


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The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Filed Under: All About Real Estate, Home Seller Information Tagged With: selling, Selling during the holidays, Selling my home, Selling my house

The Crossroads of Two Markets

08/04/2022 by billbyrd

Here we are in August 2022 standing at the crossroads of two markets! After two years of runaway home prices, historical low rates, the great migration and first-time homebuyer demand, things seem to be slowing down a little. Frankly, a move to a more normal market would be a healthy change. Much like a downturn in the stock market that gives stocks some breathe to regain momentum to go higher.

Inflation and it's affect on the crossroads of two markets.

Thanks to inflation and the fed, our market seems to be pivoting in real time as I am writing this post. When inflation started creeping into our market last year many folks were in denial, using words like transitory to calm fears. But as you can see from the chart below inflation has been anything but transitory.

Now, in order to “tame the beast” the Federal Reserve Board has been very agreesive raising rates. This action could prove to slow things down but like most economic data they are a lagging indicators. So we most likely won’t know what’s happened until it’s already happened!

However, eventhough the data is lagging, often we can draw lots on conlusions based on this lagging information. Though as for where we are right now, we still haven’t had enough time yet to completely determine if the market is truely shifting. Or, if we are just simply moving to a more normalized market? Time will tell, and it’s a little too early to make those claims in my opinion.

Crossroads of Two Markets – The Evidence

First let me say, the market is NOT crashing!

Mortgage Rates Rising

The feds rate hikes have reduced home buyers buying power by approximately 25%. For each 1% of and interest rate increase, a home buyers loses 10% of their buying power. So as an example, a buyer that could afford a $400k home in February can now only afford a $300k home. That’s a lot of lost value!

Have interest rates put us at the crossroads of two markets. Check out this historical interest rate chart.

Prices Trending Down

The average sale price has been stabilizing since April. Histoically this is the busiest time of the year when home prices normally are trending up! From the charts above you can see that interest rates started going up in late March and the home prices started stabilizing in April. Could this be the main force that is putting us at the crossroads of two markets.

If we are truely at the crossroads of two markets we will be able to look back at the rising interest rates as the main cause. With that said, if demand from the great migration continues and younger home buyers keep joining the ranks of homeowners, the Charleston market may just be normalizing?

Number of Homes For Sale

In January the Charleston MLS had around 1,000 single family homes on the market. On August 1st the MLS showed that number had doubled.

Number of Homes Under Contract

We are no longer selling more homes than we are listing.

Supply of Homes

What is a Normal Market?

In a normal market, where supply and demand are equal, you typically will see a 3-6 month supply of homes. Since the beginning of the year we have moved from a supply of homes that was less than a month to over 1.5 months of supply. It’s still a sellers market if homes a priced right but it’s not as exteme as it was before interest rates moved higher.

The Crossroads of Two Markets – Conclusion

The market statistics show we may be and the precipice of change. The indicators are there, the only question remains is, will this continue and how far will this go? So, are we actually at the crossroads of two markets? Or, could this be a headfake and next month the fed changes course, the crisis in the Ukraine resolves, inflation and rates go down and the market is off to the races again! Who really knows and thats what keeps this exciting.


Check Out This Video!


What I do know is that the only thing that remains consistent in real estate is that people always need to buy homes. And…people always need to sell homes! People don’t buy or sell because of the market, they buy and sell to fullfill a need. If that’s you, we are here to help!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Filed Under: Area Information, Financing Information, Home Buying Information, Home Seller Information, Real Estate Investing

Spring Charleston Market Update

04/21/2022 by billbyrd

This year the Spring Charleston Market Update is being written at what may turn out as one of the most unique periods in real estate history. We are right in the middle of a whirlwind of economic changes that could change our market significantly!

I’d like to look back at our Fall Market Report. In the Fall Market Report we mentioned 7 Key Indicators to watch that could impact our market. Interestingly enough a few of those indicators have come to life!


Fall Market Key Indicator Recap

Inflation Risk

Well, the risk of inflation certainly came to life in a big way! Everyone is feeling the reality of higher prices everywhere we turn. From the grocery store to the gas pump we are all paying a lot more than we were before. Below is a recent CPI Chart from FRED (Federal Reserve Economic Data) based on the Consumer Price Index pulled from Inflationdata.com


Interest Rate Chart Spring Charleston Market Update

As of the Spring Charleston Real Estate Market Update, the numbers haven’t yet significantly impacted our market. Yes, the prices of homes in Charleston have increased, but these increases haven’t slowed down the demand for homes yet.

Interest Rate Risk

Balancing Home Prices and Interest Rates Spring Charleston Market Update

Similar to inflation, the rise in interest rates has reduced the amount of home a buyer can buy. For every 1% the interest rate goes up a buyer loses roughly 10% in buying power. Thus, a 1% rate increase will knock someone qualified to buy a $500,000 home down to approximately $450,000. That is a sizable reduction in purchase power.

So far, it hasn’t reduced the demand for our unpressedentedly low inventory.

Fed Policy Risk

Fed Monetary Policy Charleston Spring Market Update

The Federal Reserve Bank’s main function is to control monetary policy. The goals of monetary policy are to promote maximum employment, stable prices, and moderate long-term interest rates. To do this they have a few tools at their disposal.

In an over heated inflationary market their goal is to slow things down by tightening the money supply. As we speak, the Fed has been making it’s moves and beginning the process of Quantitative Tightening (QT) to combat what has become 4 decade high inflation. This “QT” is a combination of the Fed reducing it’s balance sheet of securities and raising interest rates.

Again, just like the 2 previous indicators, we haven’t seen the impact yet from these Fed Policy moves. So you’ll want to keep and eye on the Fed moving forward, because they have just started making their changes in the last few months.

Major International Incident or Conflict Risk

I have to admit the Russian Invasion of Ukraine was not on my radar when I wrote the Fall Market Update. This is exactly why I mentioned that an international incident could affect our market. We never know what is going to happen around the world and the significance of these types on incidents can have a huge impact on our real estate market.

Whether it ends up having a significant impact on our real estate market or not, this event has caused turmoil in the stock market and politics. Keep an eye on Ukraine to see if this becomes a bigger global conflict than it already is.

Creative Financing Risk

As rates go up, lenders get creative. As of the Charleston Spring Market Update, we have seen lenders starting to offer ARM’s (Adjustable Rate Mortgage) again. They do this to temporarily bridge the affordability gap for borrowers. This isn’t always a bad thing and for some it can be a great tool. If you are in the market and considering an ARM, do your homework and know what you are signing up for.


Find Out What Your Is Home Worth?

Spring Charleston Market Update Numbers

To put this into perspective the numbers below are taken from the MLS Reports as of March 31, 2022

Listing Inventory Still At Record Lows

From the spring of 2019 to the spring of 2022, we’ve seen the local supply of homes for sale go down from 6,309 as of March 2019 to 1,259 as of March 2022. As I write this on April 21, 2022, the MLS shows 1,162 active homes for sale on the market!

Days On The Market Still Low

As of the end of March, our MLS shows an unbelievable median of 3 days on the market for a home to sell!

Home Prices Still Increasing Into The Spring Market

Home prices in the Charleston Spring Market have been steadily rising during the first quarter of 2022. With the median sales price increasing from $350,000 on January 1, 2022 to $361,194 by the end of March.


View Charleston Homes For Sale!

Spring Charleston Market Update Summary

The market may be changing right before our eyes! With so many different things influencing our economic, political, and financial worlds, where we end up no one knows. What I do know, is housing is a primary need for most people.

Back in the 1980’s when I started in real estate, we sold lots of homes when the rates were very high. This was because people needed a place to live and raise their families. They made it work because they had a need.

Here in Charleston we are still benifiting from the “Great Migration”. People coming here have a need! And when someone wants to move, they have to do what they have to, to get where they want to be!

Spring Charleston Market Update – What To Watch!

Key Indicators to Watch Moving Forward

  • Keep watching interest rates. Rising rates may slow down the current high demand for homes.
  • Rising interest rates will make the existing lower rate assumable mortgages very attractive!
  • Keep watching the Fed. What they do in the next few months may determine the outcome for the next few years.
  • Pay attention to what the the folks in Washington either do or don’t do. It all matters on the big stage.
  • Watch the inventory of homes for sale. If inventories increase, prices could either stall of drop.
  • Watch to see if Hedge Funds start to sell their rental inventories. Hedge Funds have been accumulating properties since 2012 and have built up massive inventories of rental homes. Hedge Funds are opportunistic and typically buy their assets low and sell them high. If our prices start to fall, we could see hedge funds begin to sell off their portfolios! In turn, this could exacerbate a decline in home prices.
  • Watch to see if new construction sales slow. Right now that doesn’t seem possible, but things can change.
  • Watch Ukraine. The outcome here is very important to the global supply chain – specifically, food and minerals.
  • Watch China and Taiwan for the impacts of potential conflict.

In The Path Of An Unpredictable Storm

Throw out the data from the first quarter and forget about last year! Storm force winds are coming ashore. Will the storm veer off back into the ocean or will we take it head on? We’ve got a lot to pay attention to!

I hope you’ve enjoyed my Spring Charleston Market Update. Every time I prepare a Market Update, I discover a few things I didn’t expect to learn.

Thanks for taking the time to read this, if you’ve gotten this far, I am flattered and humbled. Cheers!


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The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill


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Filed Under: Area Information, Home Buying Information, Home Seller Information

Fall Charleston Market Update

09/17/2021 by billbyrd

Fall 2021 Charleston Real Estate Market Update

Fall Charleston Market Update

In this edition of our 2021 Fall Charleston Market Update, we will be looking at national and local historical data. This will help us understand as to what we can expect from the current trends. Which consequentially will help us to make better choices in the future.

What You’ll Discover in This Fall Charleston Market Update

  • We are on pace for this to the 5th best year on record at a national level.
  • Home Prices are back up to the old trend line!
  • Waiting for more homes to hit the market may not be the best strategy!
  • Mortgage Rates – Still very, very low…for now!
  • Unemployment & Consumer Confidence – The good, bad and the ugly!
  • Inflation – The Dragon that needs to be slain.
  • The gap between wages and home prices has never been wider!
  • Will Mortgage Forbearance impact our market?
  • How is the Remote Worker affecting the market?
  • Why “this time, is not like last time”!

Data Sources & Charts Used in The Fall Charleston Market Update

Most of the data, charts and graphs that follow are from Gary Keller’s recent 2021 Market Update presented at the Keller Williams Realty International Convention in August.

One of the brightest minds in real estate today, Gary Keller is known for his accurate market forecasts and vast knowledge of how current economic activity affects the real estate market.


Fall Charleston Market Update – Sales and Prices

National Home Sales

National Annual Home Sales Fall Charleston Market Update

Let’s jump right into our Fall Charleston Market Update and look at National Home Sales.

First, notice that we are on pace for the 5th best year for real estate sales ever! Who would have expected this at the beginning of the pandemic!

Moving forward, most experts agree that we will not be falling off a cliff as we did in 2006. Many believe we will have a flattening of the market. This be caused by more homes coming on the market and demand slowing somewhat.


Local Sales

Local Annual Sales in the Charleston Market Fall 2021

Looking at Local Sales, you can see in our Fall Charleston Market Update, home sales have been a little more aggressive to the upside in our area than the national numbers. In my opinion, this is due to the recent migration of folks leaving the colder climates and dense cities.

Seasonally, we typically see a slowdown in the fall through to Christmas. However, right now the demand for homes is still high and inventory still selling fast. Which may keep the market from slowing down this year. However, when I talk with other folks in our local industry, some say they are feeling things slow down somewhat. Which is something we will have to keep an eye on this as we move forward.


One of the Most Important Charts

National Annual Price Increase

The yellow line represents the Long-Term Average of Home Price Appreciation. As you can see, we are now back above that trend line. After the housing crash, Gary Keller explained to us that many felt that this trend line was reset down 16%. Consequently, when we look at the homes prices on the chart for 2021, we see that prices are now back above this trend line. So what does this mean?

To this point we had 7 years above the trend line during the housing bubble from 01-08. What this means is, we could very well see prices remain above this trend line for a few years. It’s something to watch.


Local Home Prices

Charleston Market Home Prices 2021

The above chart shows the increase of local home prices. Be aware that this chart is somewhat condensed from left to right. Which makes the upward sloop look a little more extreme! However, it also reflects the greater demand for homes in our area than other parts of the country.

“If you are unaware of what’s happening right now in our local real estate market, let’s talk about the kind of wealth you’ve built in your home. This is a unique time in our real estate history.” G. Keller

Time Heals All!

“I’m just going to wait for the market to come down.”

At this point, every homeowner in Charleston should not be underwater! Even if you bought a home at the highest point of the previous housing bubble in 2006! The lesson here is that you can buy a home at the worst time possible and eventually be ok!

Since most people live in their homes for 7-10 years before they move again, time will correct any timing issues. Also, with the low interest rates making the cost of owning lower there is an offset there too.

It’s Always a Great Time To Buy A Home!

So, if you are planning on living in the home you purchase for a long time, and you have other good reasons for wanting to own a home, then go ahead and buy one! Staying in a home for a long time with these low rates, is a great combination. Focusing on the short term may keep you from experiencing all the benefits of owning a home today! Plus, prices may keep climbing and interest rates will eventually rise!


Fall Charleston Market Update – Housing Supply

National Home Supply

Supply Of Homes Fall Charleston Market Update

The lack of inventory on the market should not be a surprise to most people at this point. Again, based on the number of actual sales, it has not a shortage of homes, it’s been a massive increase in demand.


Local Home Supply

Charleston Market Local Months Supply 2021

Historically we have never seen homes selling so fast in our market!


Number Of New Listings Nationally – Trending on Average!

New Listings Fall Charleston Market Update

This chart is a little different. This shows the seasonality of new listings coming on the market. Each line represents a different year, except the blue line which represents 5 years combined.

You’ll notice these lines are very similar except during the spring of 2020. This was when the country was locked down. So again, this chart confirms that the massive increase in demand. We don’t have a housing shortage; homes are simply selling very fast!

Seasonality Of When New Listings Locally Come On The Market

Seasonal Cycle of Local New Listings in the Charleston Market

Here our local chart shows the seasonality of when homes come on the market each year. This chart doesn’t actually show the months on it but it’s the same every year. New lisitngs start coming on the market in January to July and fewer homes are listed between July and December.

Most of the population believes that the best time to sell or buy a home is in the spring. For a variety of reasons, for many people it is. However, for many other reasons, selling or buying a home in the fall and winter, might be just as good? If not a better time!


Fall Charleston Market Update – The Economy

Mortgage Rates

This chart says it all! Rates have never been lower…EVER! Nothing more to say. Interest rates have been trending down from 16 – 18% since 1981.

Rates have never been lower…EVER!


Our Gross Domestic Product Output

The data above comes frome the US Bureau of Economic Analysis.

The Gross Domestic Product is the value of all goods and services produced in a country during a specific period. So, without getting to technical, any number above 2% is good! In 2021 we are now at 6.5% which is a little too good!

When we look back in 2020, the Pandemic and the lock downs threw us off the cliff. However, now we are back! Currently this is a goods driven economy at this point because the service sector is still lagging. 6.5% may seem great…but inflation has been starting to show up for a couple months now. Inflation and it’s affects on what we pay for goods and services directly impacts our quality of life.


Consumer Confidence – Has Never Been This Low

Consumer Confidence Fall Charleston Market Update

So, with the economy roaring why is consumer confidence so low? And…it has never been this low! Unlike interest rates, this is not a good thing. This has been caused by the uncertainty. When people wake up each day and they are not able to predict what the world will bring, it’s uncomfortable!

So how does this impact real estate. My thoughts are that it impacts it in a big way. I believe that this is one of the driving factors for the migration we are seeing across the country. People are simply looking for a better life and making a change in where they live is the first step.


Unemployment In Check!

Annual National Unemployment Fall Charleston Market Update

Another surprise area in this Fall Charleston Market Update is unemployment. After being hit hard at the beginning of the pandemic, unemployment is now projected to be at 4.8% by the end of the year. Which is a great number! The government typically like to see unemployment under 6%

Unemployment Comparison Fall Charleston Market Update

Now let’s look at the unemployment rates during the Great Recession and the current Pandemic. Here you see the speed in which the economy and employment has come back.

During the Great Recession to took us a lot longer to get us back to anywhere near 6% unemployment. And during Covid, it has only taken us 2 years to get back to under 6%. What this means is that the underlying economy going into the pandemic at the end of 2019 was extremely strong.

According to Gary Keller, this has been a health crisis that has turned into and economic crisis. The Great Recession was a pure economic crisis that took longer to unwind.

National Unemployment and Job Openings Fall Charleston Market Update

This is a very interesting chart. The yellow line shows the unemployment rate as of June. The blue bars show the number of available jobs near all-time highs. This surprised me very much! Many experts believe that this dynamic will cause wage inflation in the US. This means that income will increase in America and so will inflation!


The Dragon That Needs to Be Slain

Inflation Fall Charleston Market Update

The Federal Reserve Board has for a very long time used 2% as their target rate of inflation. As this chart shows, the inflation rate is heading into territory we haven’t seen since the early 1990’s.

Everyone is feeling it. In my opinion, this has been caused by the shortages that have precipitated from the lock downs and shutdowns of our factories, mills and other businesses. In additiona, our supply chain has been handcuffed by workers that have had to stay home.

What Can Be Done?

The one tool in the governments toolbox to cool inflation is to regulate “the cost of money”! Yes, that means raising interest rates.


Fall Charleston Market Update – New Homes

New Homes Nationally

New Construction Fall Charleston Market Update

The historical average for single family home starts per year is 1 million. We are finally back up to that benchmark as builders work to keep up with demand. What’s remarkable about this, especially this year is that builders have been wrestling with a variety of headwinds.

Builders have been slowed down by local regulations, the slow approval and permitting processes and anti-growth sentiment in some areas. Additionally they have faced supply shortages, labor shortages and the rising costs of materials like lumber have all had an impact on housing.

And…the big one! Not enough developed lots to build on. Which I believe was the initial catalyst that drove prices up early in the Housing Crisis in the early 2000’s. It’s something to watch moving forward!


New Homes Locally

Local New Const Fall Charleston Market Update

Local housing starts seems to mirror the national numbers. Locally builders have been selling everything they build and raising prices. This has been to offset the rising costs of construction materials and labor. However, this hasn’t discouraged home buyers, they keep on buying!


Affordability – The scary number!

Affordability Fall Charleston Market Update

For years I have used this chart to tell the story of the Housing Crisis Bubble of the Great Recession. The Blue Line shows the Median Household Income in the US, and the Gold Line shows the Median Home Price.

The Gap Between Median Household Income and Median Home Prices Has Never Been Wider!

Up until 2001, these lines ran pretty much in “lock step” with one another. Then the run up began, and the divergence became greater and greater. Home prices became a lot higher than the Medium Income only to come back down during after the Great Recession.

Since the market bottom in 2010, we’ve been off to the races again! Now, we are seeing the greatest disparity between Household Income and the Price of a Home in recorded history.

This divergence is what forced lenders to get very creative with financing during the housing crisis. They had to find a way to bridge this affordability gap for home buyers, and unfortunately they did.

Now we are in a similar situation with the gap between income and prices having never been wider. For now, the rules put in place after the housing crisis have been very effective. The credit quality of borrowers has been kept strong and we have a higher savings rate. These are a couple of the reasons that should keep us from having another housing crisis.

Fall Charleston Market Update – A Prediction

So, what’s going on? What Gary Keller believes, is that incomes in the US have lagged and that low interest rates have bridged this affordability gap. Moving forward with an abundance of jobs available and the potential for wage expansion, higher wages could bring these lines closer together as well!


Mortgage Forbearance – Nothing Like During The Housing Crisis!

Mortgage Forebearance Fall Charleston Market Update

The bottonline here is that Mortgage Forbearances will not negatively effect housing. And there are many reasons. The biggest reason is below:

  • These homes are not underwater. Prices have risen and people have equity in their homes.
  • This gives folks options they didn’t have during the housing crisis.

An additional fear many have had is that as people exit Forbearance, it will flood the market with inventory. This simply won’t be the case, there are just not that many homes in forbearance now. The impact will be minimal.


Is Remote Work Really Driving Our Market?

Remote Work Fall Charleston Market Update

As we are working through the pandemic, we are actually seeing many folks go back to work. As we have discovered over the last few months many jobs are well suited for remote work. Yes, some people have more flexibility now and they are definitely taking advantage of this new feedom to live were they want!


Carly Tripp – “This is Not a Housing Bubble”

Nuveen Real Estate Global CIO and Head of Investments – Sept. 1, 2021

In the video from CNBA Carly outlines several reasons why she believes this is not a housing bubble! All of which makes perfect sense to me!

  • Low Rates!
  • Low Inventory!
  • Construction Delays!
  • Mortgage Debt is less than 50% of GDP vs 70% in 2007!
  • Heavy Migration to the Sun Belt States!
  • Young Homebuyers coming into the market!
  • Home Supply will not catch up to demand for a long time!

Conclusion – Fall Charleston Market Update

Yes, I know this is a lot of information! So, let’s look at what we just went over, and the key points discussed.

  • We are not having a housing shortage; we are having a housing boom!
  • If Home Prices are back on the historical trend line, maybe things aren’t that out of whack?
  • The inventory issue may not be solved anytime soon if the pace of demand continues.
  • Low Mortgage Rates – Are helping bridge the affordability gap.
  • Low Unemployment and the large number of available jobs could cause wages to rise. This would certainly help fill the gap between incomes and home prices.
  • We need to pay attention to inflation.
  • Mortgage Forbearance will have minimal impact on our market.
  • Migration and Remote Work have been fueling demand in the Charleston Market.
  • This time is not like last time”!

Based on my research, I believe we are not in a bubble. However, that doesn’t mean we don’t want to keep a watchful eye on a few key indicators.

Fall Charleston Market Update – Key Indicators to Watch

  1. Watch inflation, it may trigger the Fed to act to cool down the economy.
  2. If the Fed does act, pay close attention to what they do to slow the economy down and tame inflation.
  3. Watch interest rates. Raising rates is the Fed’s tool to control the money supply.
  4. Watch for more major international incidents or conflicts. These types of events will affect our already low consumer confidence.
  5. Watch for increased local regulations on housing construction and development. Attempts to slow down building and development with further limit the amount of supply of homes. This will cause prices to continue to move higher.
  6. Watch for banks to offer more creative financing. If wages don’t increase and rates rise, banks may develop risker financing options to bridge the gap between income prices. Which was a major catalyst for the housing crisis.
  7. Watch what our government does with Covid-19 protocol moving forward. Certain decisions could trigger more downward pressure on consumer confidence.

Standing At the Crossroads

We find ourselves in a challenging time! I would say we are near a crossroad in our economy. From inflation and strong demand to Covid-19, employment, wages and more, we’ve go a lot to pay attention to!

I hope you’ve enjoyed my Fall Charleston Market Update. Every time I prepare a Market Update, I discover a few things I didn’t expect to learn.

Thanks for taking the time to read this, if you’ve gotten this far, I am flattered and humbled. Cheers!


The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Contact Us at 843-972-7670

Filed Under: All About Real Estate, Area Information, Home Buying Information, Home Seller Information Tagged With: Charleston Real Estate, Forbearance, Market Report, Market Statistics, Market Update, Real Estate Trends

June Charleston Market Update

06/02/2021 by billbyrd

So, the data is in on last month’s real estate market here in June Charleston Market Update! There have been some small changes, so let’s go over a couple key take always from last month’s MLS results.

May MLS Activity

The first thing that jumps off the page in the June Charleston Market Update, is that in the price range under $600k. In this price range the market is contracting somewhat. Meaning more homes are selling than coming on the market. However above $600k, it’s the opposite. Even though this is not yet a significant trend or a number large enough to have a big impact but it is worth watching.

Market Statistics for the June Charleston Market Update

Second…is our List Price to Sale Price Ratio. Which is now for the entire MLS is now over 100%. Simply amazing! And the Medium Days On The Market in the June Charleston Market Update is still at 3 days!

Incredible.

June Charleston Market Update Conclusion

Right now, when you look at the numbers in the June Charleston Market Update, our market does not seem to be showing any signs of slowing down. If you’re a buyer in this market you understand this first hand. Many buyers are making offers and the successful ones are going for it and making it happen!

You just have to have some perserverance and you have to go after it agressively!

Reason to buy in this market.

Here are a few key points to think about when buying a home in this market!

June Charleston Real Estate Update, chart showing 20% appreciation year over year.
  1. Interest rates are still historically low, however inflation is here and prices on goods and services are rising and inflation will cause rates to rise! Anyone that goes to the gas pump, the lumber store or the grocery store can see it!
  2. Keep in mind, when you look at the comps for a property you are looking into the past. In a rising market every home is going to look overpriced!
  3. Every sale when it closes becomes the next comp. So whatever price you pay, your sale becomes the new benchmark for the neighborhood!
  4. Your lender requires and appraisal. The appraisal is designed to protect the lender form giving someone a loan that has overpaid! The bank does not want to “over lend” you money, just in case they have to take it back from you! Which in turn protects you from overpaying.
  5. Year over year homes have gone up in Charleston 20.8% according to the MLS. On a $400,000 house that’s $83,200.!
  6. So if this continues, which it could, that $400k house from last year, next year may cost close to $600k! And interest rates will be higher! So waiting to pull the trigger could end up hitting you hard twice!
  7. If the market does go down, keep in mind in real estate time heals any buying mistake as long as you have a normal loan. Using the 2009 housing crisis as an example, we are currently well above the highs of that market!
  8. If your focus is long term and you want to eventually turn the home into a rental…it’s much easier to cash flow a home with a low mortgage payment than a home you have to buy at a higher interest rate and monthly payment!
  9. Higher prices mean a bigger down payment requirements and higher interest rates mean less buying power and more money going out for housing expense each month!

Find Your Next Home Here!

Benefits of Owning a Home

  1. It’s forced savings.
  2. You get a tax benefit in your interest deduction or your mortgage. Which could mean a tax refund at the end of the year as opposed to writing a check to Uncle Sam.
  3. Properties appreciate, you will be growing your net worth and wealth over time.
  4. Every month you’re paying down your mortgage.
  5. You have pride in the fact that you own a home. It’s yours to improve unlike in a rental.
  6. As a homeowner now you are a vested part of the community.
  7. When you rent you are throwing your money away and paying the landlords mortgage off.
  8. No more pet deposits and pet fees?
  9. Low rates mean more purchasing power.
  10. Buying in a low interest rate environment means that you are paying historically more towards paying down your principal loan amount each month than in any other time in history.
  11. Should you choose to, you could turn the home into a rental property, further growing your wealth.

June Charleston Market Update Forcasting

Prices seem high right now if you’re in the market but look at any major city in the US that has seen the kind of demand we are now seeing! Southern California in the 60’s and 70’s, Austin Tx, South Florida, Northern Virginia and more!

Well, being that I am typically fairly conservative I’m not willing to make any predictions, but maybe, just maybe, this could be Charleston’s time!

Stay tuned we will keep watching it!

Filed Under: All About Real Estate, Home Buying Information, Home Seller Information Tagged With: Market Statistics, Market Update, Stats

1031 Tax Deferred Exchange Basics

05/31/2021 by billbyrd

Intro to 1031 Tax Deferred Exchange of Like Kind Properties used to defer Capital Gains

Let’s explore 1031 Tax Deferred Exchange Basics and how you can defer your capital gains when exchanging “like kind” investments. To begin I’d like to share that during my career I’ve worked with numerous investors, invested in many properties myself. I have built custom homes, developed land, taught real estate law and pre-licensing at the College of Charleston and more. I participated in my first 1031 Tax Deferred Exchange in 1992 and have been involved in many others since then. More about Bill

Covering The Basics of a 1031 Tax Deferred Exchange

What we will cover!

  1. What a 1031 Tax Deferred Exchange is?
  2. Why now is a great time to take advantage of a 1031 Tax Deferred Exchange?
  3. Why do a 1031?
  4. What are the 4 levels of Capital Gains Tax?
  5. What is a “like kind” property?
  6. The Exchange Equation, how capital gains are deferred.
  7. The Delayed Exchange and Time Requirements.
  8. Property Identification Rules and Parking Arrangements.
  9. Section 1031 & 121 of the IRS Code.
  10. Third Party Intermediaries.

To start, it’s important for each investor, to review your specific situation with your tax and legal advisors. And…ideally…have these conversations well before you list and negotiate the sale of the property you’ll be using in the exchange.

In this overview of 1031 Tax Deferred Exchange Basics, I’m going to pack in a lot of information. Also, I’m not going to go into great detail on any one particular topic. But, for those of you that are new to 1031 exchanges, you’ll get a good introduction. We will look at the time deadlines and the process involved. And, you’ll discover how you can use section 1031 to defer the capital gains on your investment properties!

Potentially Different 4 Levels of Tax

1031 exchanges are a vital part of the tax code. IRC section 1031 is the section of the code that provides the guidance for this capital gains tax deferral strategy. The IRC Section 1031 gives investors the ability to defer capital gains taxes on the sale of any real property. But it has to be property that is held for productive use in business or for investment. The code allows taxpayers and business owners to potentially defer up to four levels of taxation on a sale of investment property. That is, if the investor did not sell and exchange a property under the guidelines of a 1031 exchange.

Since 1921

Section 1031 has been part of the tax code since 1921. With a 1031, the rationale behind the capital gains tax deferral is that there is a continuity of investment liquidity when a taxpayer sells a piece of real property, that they’ve been holding for investment or using it for a business, and then reinvests into…another, “like kind” property. So, in a 1031 the investor is not actually receiving the cash proceeds, the cash or equity is just going from one investment property to another investment property. The deferral of these capital gains taxes makes the 1031 a very powerful strategy for business owners and real estate investors looking to improve their investment returns.

The Perfect Storm For 1031 Tax Deferred Exchanges

We have what we call right now the perfect storm for 1031 Tax Deferred Exchanges. This perfect storm is being driven by a couple of factors. One is that the current administration is looking to increase capital gains taxes significantly. And over the years certain groups have tried to remove section 1031 from the code! So maybe, it might be a good idea to take advantage of a section of the code!

Additionally, a new tax was recently added in the mix, the “net investment income tax”. This tax is added on to the capital gains taxes of certain higher earners. So, with the possibility of higher capital gains tax rates on the way for real estate investors, the 1031 exchange may become more popular and useful in the next few years.

Strong Markets

Now, coupled with that, we’ve got very strong financial and real estate markets. From the stock market to real estate, we’ve seen several good years. In fact, right now even in the wake of the Covid-19 Pandemic, the markets have been doing incredibly well. Residentially, commercially, nationally, we’ve seen very strong markets in just about every area of the country. So, what that means is that investors have seen significant appreciation in the values of their real estate assets. And when they go to sell these assets the capital gains tax could be significant.

Click here to discover what homes are selling for in your neighborhood!

So, the bottom line is we have taxpayers that own investment properties that have increased dramatically in value. These investors can now use the 1031 as a way to potentially defer paying taxes on their gains. Effectively pushing that tax liability into the future.

Why a 1031 Tax Deferred Exchange?

There are a lot of reasons why people consider an exchange and I’m going to go through a few of the motives.

Creating Leverage with the 1031 Tax Deferred Exchange

One is obtaining more leverage. If a taxpayer has significant equity in a property, they may not be getting the best return on investment. Taxpayer’s that have a lot of equity in a property, may want to exchange out of it and acquire other property with a better rate of return.

Diversification

Some taxpayers use a 1031 exchange for diversification purposes, and there are really two ways to do that
One, a taxpayer can diversify geographically. If a taxpayer has a lot of properties in one marketplace, they may want to exchange out to another marketplace. They might do this to take advantage of different economic conditions in a different area and create more diversification.

Sometimes investors look to diversify by asset class. A single-family home investor may want to exchange into a multifamily property or maybe an industrial or commercial property. So, you can diversify both geographically and by asset class.

Consolidation

Consolidation is a very popular strategy. There are many real estate investors nationwide that started investing in single family homes. After aquiring a large portfolio of several single-family homes, they may consider consolidating that equity that into one larger investment. Investments like an apartment, a multifamily building or an office building may simplify management responsibilities.

Cash Flow

Cash Flow is another powerful motivator. Plenty of people here in our area own land with a lot of equity, but it’s not producing cashflow. A land owner/investor may exchange out of raw land, into income producing property and pay no capital gains. Now can create an income stream where there was once no cash flow! And, if done right can create a legacy for their heirs for generations!

Management Relief

Management relief is another motivating factor. A investor might decide to exchange out of several properties, and exchange them into a larger multi-family or office building. Some investors want to increase their upside appreciation and depreciation opportunities. A taxpayer can go up in value, acquire a larger building, and then get some additional depreciation as well as appreciation. Remember a percentage of a bigger number is always a much bigger number!

Estate Planning Using the 1031 Tax Deferred Exchange

And then finally, estate planning. Many older taxpayers may have a lot of their equity in one large property. Proper estate planning can help them take advantage of 1031 exchange. Some taxpayers will sell a property and acquire several smaller properties selected by their heirs. They do this as a way to allow family members to basically pre-select their inheritance while the taxpayer is still alive. This is a way of deferring tax gains and reducing inheritance taxes at the same time.

4 Levels of Taxation

Let’s take a look at capital gain taxation. This is critically important to understand. Taxpayers face potentially four different levels of taxes.

Depreciation Recapture

Taxes are first assessed on any depreciation recapture and depreciation recapture is taxed at a higher rate of 25%. If a taxpayer owned a property for several years, they’ve probably taken some depreciation. So when they sell, they’re going to have to pay taxes on that recapture that depreciation.

Federal Taxes

Then on the remaining economic gain, the investor will be taxed at the federal level. Which could be either 15% or 20%, depending on what the tax rate the individual investor’s tax rate is.

Net Investment Income Tax

Net investment income tax is a tax that affects many higher income earners. This is a 3.8% tax that is assessed on investors that meet the following criteria.
Single filers with over $200,000 of net investment income. Married taxpayers filing jointly with over 250,000 of net investment income.

State Caital Gains Tax

And then finally, is the applicable state capial gains tax rate of 7% in South Carolina.

It’s important to keep in mind, you could potentially face all four levels of taxes.

And when you do the math, you may be paying significantly higher capital gains taxes than you expected! Meaning, the taxes are going to eat into the projected profit that you thought you’d have. And that’s why investors use the 1031 exchange. It’s a tool to improve the rate of return and to really push that tax liability into the future.

Real Estate Investment Stratigies

Buy and Hold

Now, as a real estate investor, you really just have three strategies with your real estate. One is to buy and hold. Many taxpayers will do that. Buy a property, hold it for the long-term and pay down the mortgage, while slowly bumping up rents.

Buy and Sell

The second strategy is to buy and sell a property. So, you sell the property and pay all of the taxes owed. In this scenerio you could potentially you pay all four levels of taxation. Now you’ll have the after-tax equity that you can invest into things outside of real estate. Stocks, bonds, mutual funds, energy, commodities, and any other type of investments. There are many investors that do this as part of a long-term strategy to diversify out of real estate.

ROI

One aspect that I’d like to point out is that it’s very difficult to obtain the same rate of return, the same ROI with after tax dollars that are invested outside of an investment real estate. The real benifit of the 1031 Tax Deferred Exchange is the aspect of leveraging all of you equity into another property or properties. Basically keeping all of the gross equity and redeploying that into another investment property. It simply makes more sense that it you have more dollars to spend you can buy more! So purely from a return-on-investment standpoint, there might be a little bit of an economic hit when you don’t use the 1031 exchange and buy other investments with after tax dollars.

Again, many investors may want to diversify out of real estate in the future, and by using a 1031 they’ll be postponing that tax liability and pushing that into the future. However, there will be a point in time when they want to go ahead and liquidate some real estate pay the taxes owed, if that’s part of their long-term strategy.

Using The 1031 Tax Deferred Exchange

And then finally, with 1031 Tax Deferred Exchange real estate investors can do a fully deferred exchange. That’s where they pay no capital gains taxes and defer all of the capital gains tax.

However, some investors may opt for what we call partial tax deferral. They may sell property and buy one or two replacement properties but receive some cash out of the transaction. That’s cash is called cash boot. Any cash pulled out of a transaction is taxable. If that taxpayer also has a reduction in their mortgage owed, that is called mortgage boot, and mortgage boot is also taxable. With that said, many investors will still proceed with a partially deferred exchange and take advantage of what a section 1031 exchange offers and be happy paying some taxes on that boot. That’s just another strategy that’s available.

IRC Section 1031: The Code

Let’s just take a quick look at the actual tax code itself. The tax code says this:

No gain or loss shall be recognized on the exchange of real property held for productive use in the trade or business or for investment. If such real property is exchanged solely for real property of “like kind”, which has to be held either for productive use and a trade or business or for investment.

Some key takeaways looking at the code; number one, looking at the first line, this is what we call “non-recognition treatment”. Meaning, the cash, or tax liability, follows the taxpayer from the relinquish property, and that basis gets rolled over into the replacement property. Keep in mind, the taxes don’t go away. Sometimes you’ll hear people incorrectly call a 1031, a tax-free exchange. When in fact it’s not, it’s tax deferred. We’re just pushing the tax liability into the future. It’s called non-recognition treatment.

A 1031 Tax Deferred Exchange is More Flexible Than Most Expect

Now the types of property that qualify are very broad. It could be an investment property for an investment property. You could exchange a business property for another business property. Or exchange an investment property for a business property or a business property for an investment property. As you can see, there are a lot of options.

And when we look at the whole concept of “like kind” property, which we’ll look at shortly, “like kind” property is very, very broad. So, it’s only real property. Real property is real estate. Personal property does not qualify for a 1031 Tax Deferred Exchange.

Exclusions from the 1031 Tax Deferred Exchange

Now there are some investment properties that are excluded from the code. The first is, Stock in Trade or other property held primarily for sale. Stock and trade is typically going to be inventory held in the ordinary course of business for sale to customers. An example would be a home builder or home flipper. Someone that’s holding inventory to sell it. In other words, if the intent of the taxpayer is to hold a property for sale, and not a long-term investment it will not qualify for a 1031 Tax Deferred Exchange. Typically when we are talking about a long-term investment, we are generally referring to income producing properties, unless it’s bare land.

“Like Kind” Property and the 1031 Tax Deferred Exchange

The image below shows all the different types of “like kind” real property. You see on the upper row, a farm, a single-family home, an office building. And then as you go down, you’ll see all sorts of other types of properties, a rental vacation home, bare land, an office building retail, industrial, multifamily, and the list goes on and on. Any real property held for investment, can be exchanged for any other real property held for investment.

Pictures of Like Kind Properties used in 1031 Tax Deferred Exchanges

So the key thing to remember here is that the term “like kind” property as defined by the code can be fairly expansive and broad!
Some people have misconceptions about what “like kind” truely means. Some folks think that if it’s bare land, you have to acquire bare land and that’s not true. You can actually sell out of bare land and buy into an income property. You can go from a single-family rental into an office, industrial or retail property. They’re all considered “like kind” properties.

Other “Like Kind” Considerations

Now let’s take another look at some “like kind” property issues. First off, the house that a taxpayer lives in, their principal residence, generally does not qualify as “like kind” property because the taxpayer lives in it. Number two, as we mentioned before, any property held for sale would not qualify.

So, what’s important is if the intent of the property is to be held for sale, not long-term investment, that property is also excluded. Sometimes you hear that referred to as dealer property. Any other real property that is held for productive use in a trade or business, or for investment can be exchanged for any other real property held for productive use in a trade or business or for investment. So there really are a lot of “like kind” alternatives available to investors.

Intent

Alot of people will ask, how long do I need to hold a property before it’s considered held for investment? And the answer is that it’s more than just the time period. It really comes down to what is the intent of the taxpayer and is their intent to hold for investment or not. So the intent is very internal, right? It’s subjective. So we find that the IRS and the tax authorities, they’re going to look at objective and provable facts. Facts that either support the intent to hold for investment or contradict yet. So either way, they’re going to look at each taxpayer’s unique situation and their unique facts and circumstances regarding their property.

So is the time period important? Of course it is, but there is no set time period that you have to hold a property. It’s really just one of many factors. So in a perfect world, it would be ideal to have many factors and attributes showing that the intent is to hold the property for investment versus another intent. And, to the extent that you have a lot of contradictory factors, the IRS might conclude the property was really not held for investment.

The 1031 Tax Deferral Exchange Equation

In order to realize a full tax deferral on the sale of a property, a taxpayer just needs to meet two requirements. One, they need to re-invest all of the net exchange proceeds of the relinquished property. And two, acquire a “like kind” property with the same or greater amount of debt. Those are the two basic rules.

What is “Boot” in a 1031 Tax Deferred Exchange

Another way of saying this is to spend all of the cash equity and buy at the same net sales price or greater. So, again if the taxpayer receives any cash out, that is called cash boot, and if they have a reduction in the mortgage liabilities, that’s called mortgage boot.

Full Tax Deferral

In the diagram below the taxpayer sells a relinquished property for $900,000., the debt or the loan payoff is $300,000., the cost of sale is approximately $60,000. Cost of sale would include things like real estate commissions, recording fees, fees to prepare the settlement statements, preparing the deeds etc. So when we subtract the debt and cost of sale from the value we are left with net proceeds of $540,000

The Exchange Equation

In the next example, the buyer is buying a more expensive property. They buy a replacement property for $1.2 million. Their debt goes from $300,000 to $660,000. and there’s no mortgage boot because they went up in debt. They also reinvested all of their net equity/proceeds of $540,000 that was held in escrow by the qualified intermediary. Since all of the equity is reinvested in the replacement property and the investor never touches the cash the exchange qualifies for a full tax deferral.

The Exchange of Like Kind Properties used to defer Capital Gains

So, there is no mortgage boot and no cash boot. And there is a full tax deferral. Keep in mind the investor could have exchanged into multiple replacement properties rather than if they had chosen to do so!

Cash Boot and Mortgage Boot

In the next example, the taxpayer sells a property for the same amount, but they buy a replacement property for only $700,000. So they’ve lowered the value of their investment.
The debt goes from $300,000 to $260,000. which creates $40,000 of mortgage boot. Additionally, they only reinvest $440k of their net proceeds. And this creates an additional $100k of cash boot.

An exchange with mortgage and cash boot.

Now you add those two together and this exchange will result in a total boot of $140,000. Creating a $140k tax liability.

Mortgage Boot

And then finally, one last example. In this example the taxpayer buys a property for 800,000 and they reduce their debt by $40,000. But they reinvest all their cash in the new property.

Mortgage Boot

This creates $40,000 of mortgage boot. Most investors know intuitively if you receive cash, it’s going to be taxable, but it’s important that you look at both the cash and the debt. If you have less mortgage on the replacement property than the relinquished property, you’ll also pay taxes on the mortgage boot as well.

So again, to summarize for full tax deferral, you want to reinvest all of the net exchange proceeds. Number two, you want to acquire property with the same or a greater amount of debt.

The 1031 Tax Deferral Delayed Exchange

Now, let’s take a look at the delayed exchange process and the time deadline requirements. The delayed exchange is the most common exchange formats. What’s critically important is that you set up a 1031 exchange prior to closing on the sale of the relinquished property, the one you’re exchanging. If you’ve already closed, it’s too late to set up a 1031 Tax Deferred Exchange.

The Delayed Exchange the most popular 1031 Tax Deferred Exchange of Like Kind Properties used to defer Capital Gains

So, in a proper sequence you and your agent connect with a closing attorney and a qualified intermediary in advance of the sale. Your agent will make sure the right language is in the listing and the sales contract. While the closing attorney and the qualified intermediary will prepare the necessary paperwork and documents to process the exchange.

Once the property is sold, through an assignment of the contract the Qualified Intermediary becomes the seller in the first part of the exchange. At closing the buyer pays for the property and the money is held in escrow by the qualified intermediary. The qualified intermediary then instructs the closing attorney to directly deed the property from the taxpayer to the buyer. The qualified intermediary will then hold the proceeds of the sale in escrow until the replacement property is purchased.

Timing of The Delayed Exchange

The date the closing of the relinquished property becomes day zero of the identification period in the delayed exchange. The taxpayer then has up to 45 calendar days to identify a replacement property or properties. Additionally, they will have another 135 days, for a maximum of 180 days to acquire the replacement property.

Once the taxpayer selects or identifies the replacement property or properties, they then assignment of the contract to the qualified intermediary. At that time the qualified intermediary will then act as the buyer of the replacement property. When closing occurs, the proceeds from the sale of the relinquished property will then be used to purchase the replacement property. At which time the qualified intermediary will instruct the closing attorney to directly deed the replacement property to the taxpayer

So you see the taxpayer does not actually sell the relinquished property, the qualified intermediary sells it to the buyer, and the qualified intermediary purchases the replacement property from the seller. The taxpayer is merely giving up a relinquish property and receiving back a replacement property. And that’s how they’re able to have a 1031 Tax Deferred Exchange. They’re just giving up a property, held for investment and then receiving another property, a like kind property also to be held for investment

Delayed Exchange Timing Deadlines

Time Frames for identifying and closing on a replacement property in a 1031 Tax Deferred Exchange of Like Kind Properties used to defer Capital Gains

To reiterate, during the Identification Period the taxpayer has until midnight of the 45th day after closing on the relinquished property to identify a replacement property or properties. Then the exchange period is 135 days from the end of the identification period for a maximum of 180 calendar days. And when I say calendar days, remember these are going to go through weekends and holidays.

Another wrinkle in the dealines revolves around when the taxpayer file their tax return for the year that the relinquished property was sold in. What this means is that you have to close on the replacement property within 180 days or before you file your taxes. This is another reason why you’ll want to plan this out and counsel with your tax and legal advisors well before putting a property on the market.

Rules For Identifying Property For Your 1031 Tax Deferred Exchange

Now there’s a few rules for identifying a replacement property or properties in a 1031 Tax Deferred Exchange.

The 3 Property Rule

The first is called the three-property rule. Here a taxpayer can identify three “like kind” replacement properties of any fair market value. As an example, they sell a property for a million dollars, then they identify one at a 1 million, one at 1.8 million and one at 2.4 million. The value doesn’t matter, but you’re limited to three properties under the three property rule.

The 200% Rule

Second, there’s the 200% rule under this rule. With this rule the taxpayer can identify an unlimited number of “like kind” properties, however the total fair market value or aggregate value of all the replacement properties identified cannot exceed 200% of the fair market value of the relinquished property. So in this example, if I sell a property for $1 million dollars, the taxpayer can identify as many replacement properties as they want, but they can’t go over $2 million in value, which is 200%. So with the three property rule, you’re limited on the number of properties, but unlimited value. With the 200% rule it’s really the opposite of that. It’s an unlimited number of properties, but now you’re limited on the value to no more than 200% of what you sold.

The 95% Rule

And finally, the third rule is called the 95% rule. This is used by a taxpayer that wants to identify more than three “like kind” properties and more than 200% of the value of the relinquished property. With the 95% rule they can do that. However, they must then actually close on or acquire 95% of the value of all properties identified. So as an example, if I identify 10 properties, I would need to buy all 10 of them presuming they were all the same value. If I only bought nine, that would be 90% not qualifying under the 95% rule. So most taxpayers will typically use the three property rule or 200% rule, but there’s the 95% rule to offer a little extra flexibility.

Find Your Replacement Property Below

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Parking Arrangements in a 1031 Tax Deferred Exchange

Now we are going to look at some other more complex variations of the 1031. These are what are called parking arrangement transactions.

The Reverse Exchange

This is where the taxpayer is going to close on the purchase of the replacement property before closing on the sale of their relinquished property. So, they buy a new property and close on it, and then have up to 180 calendar days to sell the relinquished property

The Improvement Exchange

The improvement exchange is where a taxpayer buys a new property to be built. Or it could be one that needs improvements and refurbishments. Again, just like the Revese Exchange there’s only 180 days to build or make the property improvements. So you are working with a very limited timeframe.

The Reverse Improvement Exchange

And then finally, there’s a parking arrangement known as a reverse improvement exchange. This is where the taxpayer is going to acquire the replacement property and then begin construction on that property and then have up to 180 days to close on the sale of the relinquished property.

Even though we are not going into a lot of detail here, this is to show you that the 1031 Tax Deferred Exchange has more flexibility than most people realize.

IRC Section 121 and Section 1031

Many people are already familiar with Section 121 of the tax code. These are the rules for tax exclusion on the sale of a principal residence. And I wanted to review them here now and show you how it can apply in an investment scenario. Section 1031 provides the rules used for tax deferral on any property held for investment or used in trade or business.

Section 121 provides tax exclusion up to certain threshold amounts. To qualify, the home has to have been your personal residence for 2 out of the last 5 years. And, if you’re a single filer you can exclude $250,000 of gain. If you’re a married couple filing jointly, you can exclude up to $500,000. of capital gain.

How Section 121 and Section 1031 Can Work Together

Now when it comes to IRC Section 1031, there are a few ways it can work together with section 121. Here are a few more ideas to consider.

Split Treatment

There’s what we know as split treatment. This is where somebody can sell a property that is a partial rental property and partially a residence. An example would be a duplex or fourplex where somebody that lives in one unit and rents out the others.

Convert A Rental Into A Residence

Additionally, a taxpayer can convert a rental property acquired in a 1031 exchange into a residence down the road. That would be converting a 1031 property into 121 property.

Convert A Residence Into A Rental

And then finally, taxpayers can convert a personal residence, a section 121 property, into a rental, section 1031 property.

What you’ve learned!

  1. We’ve discovered what a 1031 Tax Exchange is.
  2. Why now is a great time to take advantage of a 1031 exchange.
  3. Why would you want to do a 1031.
  4. What the 4 levels of Capital Gains Tax are.
  5. What “like kind” property means.
  6. We have reviewed the Exchange Equation.
  7. We’ve reviewed the Delayed Exchange and it’s Time Requirements.
  8. The importance of Identification Rules and Parking Arrangements.
  9. We’ve discussed Section 1031 & 121 of the IRS Code.
  10. Third Party Intermediaries.

Conclusion

I hope this presentation has given you a greater understanding of the 1031 Tax Deferred Exchange. As always, I encourage you to do your research and counsel with your tax, legal and financial advisors. You’ll want to determine if a 1031 exchange is right for your particular investment situation. And, if you’d like to discuss your real estate strategies with me, I’ll be happy to help. I can provide you with a free performance and market analysis of any investment property you own. My goal is to help people make wise decisions with their real estate and help them build generational wealth for their families through smart real estate investing.

Thank you for reading this post and I hope to hear from you soon!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill


Contact Us at 843-972-7670

Filed Under: All About Real Estate, Home Seller Information, Real Estate Investing Tagged With: 1031, Exchange, investing, real estate investing, Section 1031, Section 121, tax deferral, Tax Exchange

Short Term Apartment Rentals In Charleston

04/08/2021 by billbyrd

Below we’ve compiled a list of Short Term Apartment Rentals In Charleston. Many of our clients over the years whether moving into the area or selling a home have had a need for a short term rental solution. The following list of Apartment Rentals includes both Short Term and Long Term Apartment Rentals in Charleston. Here you’ll find apartment rentals in several locations throughout the Tri-County area. So we are confident that anyone will be able to find a location convient for their needs from the list below.

What’s not included in our list of Short Term and Long Term Apartment Rentals in Charleston are Air BnB’s…those can be found at either of these links https://www.airbnb.com/charleston-sc/stays or https://www.vrbo.com/vacation-rentals/usa/south-carolina/charleston-area/charleston

Just like shopping for a home, we would suggest visiting the properties for a tour and comparing features and amenities before making any decisions. Here in Charleston you’ll find a wide variety of choices, pricing and locations.

We hope you find our list of Short Term Apartment Rentals In Charleston helpful and as always call us if we can be of service. 843-972-7670


John’s Island/James Island/West Ashley Apartments

Short and Long Term Apartment Rentals In Charleston

The Avalon Apartment Complex Pool

The Avalon at James Island: 202 Promenade Vista St, Charleston, SC 29412

(844) 519- 7286

  • For one bed apts, it starts at $1,525+, two bed is $2,015+, three runs from $3,250-$3,310
  • Call for flexible lease terms
  • Unfurnished
  • https://www.avalonjamesisland.com
  • https://www.avalonjamesisland.com/photogallery.aspx
The Standard at James Island Apartment Complex

The Standard at James Island: 215 Promenade Vista St, Charleston, SC 29412

(866) 761- 8514

  • The Standard at James Island: 215 Promenade Vista St, Charleston, SC 29412
  • (866) 761- 8514
  • One bed one bath ranges from $1,380-$2,080, Two bed two bath start at $1,965, (said prices cannot be determined until 60 days prior to the move-in date)
  • Lease terms range from 2-12 months but terms shorter than 12 may have premium fees
  • •Unfurnished 
  • https://www.thestandardincharleston.com
  • https://www.thestandardincharleston.com/charleston/the-standard/photos/
35 Folly in West Ashley Apartment Rental Complex

35 Folly in West Ashley:  35 Folly Rd Blvd, Charleston, SC 29407

(843) 632- 5543

  • 35 Folly Rd Blvd, Charleston, SC 29407
  • One bed apts range from $1,305-$1,453, two bed ranges from $1,753-$2,083
  • Lease terms range from 3-15 months 
  • Unfurnished
  • https://www.35folly.com
  • https://www.35folly.com/gallery
1000 West Ashley Apartment Complex

1000 West at West Ashley: 1000 Bonieta Harrold Dr Charleston, SC  29414

(843) 632- 5543

  • 1000 West at West Ashley: 1000 Bonieta Harrold Dr Charleston,  SC  29414
  • (843) 396-1084
  • One bed prices range from $1,085 – $1,290, Two bed two bath price ranges from $1,315 – $1,420, Three bed two bath is priced at $1,520
  • Lease terms range from 3-18 months 
  • Unfurnished
  • https://www.1000westapts.com
  • https://www.1000westapts.com/charleston-sc-apartments/1000-west/photos/
Spyglass Seaside Apartment at James Island Complex Kitchen

Spyglass Seaside Apartment Rentals in James Island: 1674 Folly Road, Charleston, SC 29412

(843) 410- 4888

  • Spyglass Seaside Apartments in James Island: 1674 Folly Road   Charleston, SC 29412
  • (843) 410- 4888
  • One bed apts range from $1,495 – $1,554, two bed two bath $1,915-$1,983, three bed 2 bath price at $2,138
  • Lease terms range from 8-14 months
  • Unfurnished
  • https://www.spyglassseaside.com
  • https://www.spyglassseaside.com/photogallery.aspx
Aspire Apartment Complex at James Island Gym

Aspire at James Island Apartment Rentals: 1743 Central Park Road Charleston, SC 29412

(844) 800-8027

  • Aspire at James Island:1743 Central Park Road Charleston, SC 29412
  • (844) 800-8027
  • One bed range from $1,325 – $1,540, two bed two bath price at $2,300
  • Lease terms range from 6-15; anything shorter requires a $200 premium 
  • Unfinished but partners with a furniture company 
  • https://aspirejamesisland.com
  • https://aspirejamesisland.com/gallery/
The Apartments at Shade Tree in Johns Island  Rental Complex Short TermLiving Room

The Apartment Rentals at Shade Tree in Johns Island: 2030 Wildts Battery Blvd, Johns Island, SC 29455

(843) 588-5509

  • The Apartments at Shade Tree in Johns Island: 2030 Wildts Battery Blvd, Johns Island, SC 29455
  • (843) 588-5509
  • One bed ranges from $1,233 – $1,290, Two bed two bath available is priced at $1,454, Three bed two bath priced at $1,502
  • Lease terms range from 3-16 months
  • Unfurnished
  • https://www.rentshadetree.com
  • https://www.rentshadetree.com/johns-island/the-apartments-at-shade-tree/photos/
The Charthouse Apartment  Rental Complex Short Term Bathroom at James Island:

The Charthouse at James Island: 1559 Folly Rd, Charleston, SC 29412

(843) 795-1232

  • The Charthouse at James Island: 1559 Folly Rd, Charleston, SC 29412
  • (843) 795-1232
  • One bed is priced at $1,295, Two bed two bath price ranges from $1,350-$1,495, Three bed two bath priced at $1,695
  • Unfurnished
  • https://www.charthouseapts.com

Not Sure You Want To Rent? Check Out What’s For Sale!

  • For Homes For Sale in James Island
  • For Homes For Sale in Johns Island
  • For Homes For Sale in West Ashley

Mount Pleasant/Daniel Island

Short and Long Term Apartment Rentals In Charleston

The Watch Apartment  Rental Complex Short Term Pool Deck at Mount Pleasant

The Watch at Mount Pleasant: 997 Johnnie Dodds Blvd. Mt. Pleasant, SC 29464

(844) 506-9154

  • The Watch at Mount Pleasant: 997 Johnnie Dodds Blvd. Mt. Pleasant, SC 29464
  • (844) 506-9154
  • 1 bed range from $1,150-$1,740, two bed one bath range from $1,425-$1,813, two bed two bath range from $1,668 +
  • Lease terms range from 3-15 month
  • Unfurnished but partners with furniture companies 
  • https://www.thewatchapts.com
  • https://www.thewatchapts.com/photogallery
Bridgeside Apartment  Rental Complex Short Term Living Room at Patriots Point

Brideside at Patriots Point: 175 Harbor Bridge Lane, Mount Pleasant, SC 29464

(855) 864-1521

  • Brideside at Patriots Point: 175 Harbor Bridge Lane, Mount Pleasant, SC 29464
  • (855) 864-1521
  • 1 bed range from $1,270-$2,319, two bed two bath range from $2,299 – $2,676
  • Lease terms range from 3-15 months 
  • Unfurnished but partners with furniture companies 
  • https://livebridgeside.com
  • https://livebridgeside.com/gallery/ 
Oyster Park Apartment  Rental Complex Short Term Kitchen at Mount Pleasant

Oyster Park at Mount Pleasant: 1421 Shucker Cir, Mt Pleasant, SC 29464

(833) 629-3644

  • Oyster Park at Mount Pleasant: 1421 Shucker Cir, Mt Pleasant, SC 29464
  • (833) 629-3644
  • Studio apartments range from $1,164-$2,713, One bed ranges from $1,393-$3,052, Two bed two bath range from $1,916 – $3,798
  • Lease terms range from 6-15 months 
  • Unfurnished
  • https://experienceoysterpark.com
  • https://experienceoysterpark.com/gallery/
1201 Midtown Apartment  Rental Complex Short Term Dog Park at Mount Pleasant

1201 Midtown at Mount Pleasant:1201 Central Haven Dr, Mt Pleasant, SC 29464

(843) 606-4417

  • 1201 Midtown at Mount Pleasant: 1201 Central Haven Dr, Mt Pleasant, SC 29464
  • (843) 606-4417
  • Studio apartments start at $1,333(only availability), One bed ranges from $1,361- $1,723, Two bed two bath range from $1,703 to $1,983
  • Lease Terms range from 3-14 months 
  • Unfurnished but works with furniture companies 
  • https://www.maac.com/south-carolina/charleston/1201-midtown/
River Walk Apartment  Rental Complex Short Term Pool at Mount Pleasant

River Walk at Mount Pleasant: 301 Seaport Ln, Mt Pleasant, SC 29464

(833) 799-8821

  • River Walk at Mount Pleasant: 301 Seaport Ln, Mt Pleasant, SC 29464
  • (833) 799-8821
  • Studio prices range from $1,243- $1,343, One bed ranges from $1,265 – $1,510, Two bed two bath range from $1,635 – $1,680
  • Lease Terms range from 6-12 months
  • Unfurnished
  • https://www.maac.com/south-carolina/charleston/rivers-walk/
Wharf7 Apartment Complex Common Room

Wharf7 at Daniel Island: 515 Robert Daniel Drive Charleston, SC 29492

(843) 216-1300

  • Wharf7 at Daniel Island: 515 Robert Daniel Drive Charleston, SC 29492
  • (843) 216-1300
  • Studio Deluxe is priced at $1,195, One bed is listed at $1,290 for the available models, Two bed two bath is ranges from $1,620 – $1,810 
  • Lease Terms range from 2 -12 months
  • Unfurnished 
  • https://www.wharf7charleston.com
  • https://www.wharf7charleston.com/charleston/wharf-7/photos/
Central Island Square Apartment  Rental Complex Short Term Gym at Daniel Island

Central Island Square at Daniel Island: 50 Central Island St. Daniel Island, SC 29492

 (843) 654-1867

  • Central Island Square at Daniel Island: 50 Central Island St. Daniel Island, SC 29492
  • (843) 654-1867
  • Studio prices range from $1,307 – $1,369, One bed one bath ranges from $1,389 – $1,715, One bed 1.5 bath ranges from $1,818 – $2,246, Two bed one bath priced at $1,857, Two bed two bath range from $1,814 – $2,567, Three bed 2 bath range from $2,464 – $3,300, Three bed 2.5 bath price at $3,608, Three bed three bath price at $3,140
  • Lease terms set at 12 months 
  • Unfurnished
  • https://www.cr-centralislandsquareapts.com
  • https://www.cr-centralislandsquareapts.com/photogallery.aspx
The Sage at 1240 Apartment  Rental Complex Short Term exterior at Mount Pleasant

The Sage at 1240 at Mount Pleasant: 1240 Winnowing Way, Mt Pleasant, SC 29466

(843) 548-8478

  • The Sage at 1240 at Mount Pleasant: 1240 Winnowing Way, Mt Pleasant, SC 29466
  • (843) 548-8478
  • Studio prices range from $1,310 – $1,610, 1 Bed ranges from $1,290 – $1,590, Two bed two bath price ranges from $1,399 – $1,799, Three bed 2 bath price ranges from $1,785 – $2,085
  • Lease Terms range from 3-18 months
  • 3 month option furnished
  • https://www.thesageat1240.com
  • https://www.thesageat1240.com/gallery/
The Haven at Indigo Square Apartment  Rental Complex Short Term Common Room at Mount Pleasant

The Haven at Indigo Square at Mount Pleasant: 1800 Indigo Market Drive, Mt Pleasant, SC 29464

(843) 806-4558

  • The Haven at Indigo Square at Mount Pleasant: 1800 Indigo Market Drive, Mt Pleasant, SC 29464
  • (843) 806-4558
  • Studio apartments are priced at $1,071, One bed prices range from $1,291-$1,618 and One bed with 1.5 bath is priced at $2,657, Two bed two bath $1,987 – $2,032 and two bed with 2.5 bath is priced at $3,706, Three bed two bath is priced at $2,386 and three bed 2.5 bath is priced at $4,391
  • Lease Terms range from 3-15 months
  • Unfurnished
  • https://www.havenindigosquare.com
  • https://www.havenindigosquare.com/mount-pleasant-mount-pleasant-south-caroline/the-haven-at-indigo-square-the-haven-at-indigo-square/photos/

Not Sure You Want To Rent? Check Out What’s For Sale!

  • Homes For Sale in Mt. Pleasant
  • Homes For Sale in Daniel Island

Downtown

Short Term and Long Term Apartment Rentals in Charleston

Elan Midtown Apartment  Rental Complex Short Term Living Room in Downtown

Elan Midtown in Downtown: 441 Meeting Street, Charleston, SC 29403

(843) 937-8577

  • Elan Midtown in Downtown: 441 Meeting Street, Charleston, SC 29403
  • (843) 937-8577
  • Studio ranges from $1,623 to $2,273, One bed ranges from $1,761 to $2,634, Two bed two bath range from $2,776 to $2,856
  • Lease Terms range from 3-15 months
  • Unfurnished 
  • https://elanmidtown.com
  • https://elanmidtown.com/gallery/
The Guild Apartment  Rental Complex Short Term Kitchen in Downtown

The Guild in Downtown: 128 Columbus Street Charleston, SC 29403

(843) 548-1658

  • The Guild in Downtown: 128 Columbus Street Charleston, SC 29403
  • (843) 548-1658
  • Based on availability, Studio’s range from  $1,771 to $2,375,  One bed one bath price ranges from $2,452 to $3,645, and  Two bed two bath range from $3,000 to $4,500
  • Lease terms range from 6-15 months
  • Furnished option
  • https://livetheguild.com
  • https://livetheguild.com/gallery/
Westedge Apartment  Rental Complex Short Term Kitchen in Downtown Charleston

Westedge in Downtown: 10 WestEdge Street Charleston, SC 29403

(843) 806-3831

  • Westedge in Downtown: 10 WestEdge Street Charleston, SC 29403
  • (843) 806-3831
  • One bed one bath priced at $1,623, Two bed two bath is priced at $2,344, and a two bed two bath with a large living room is priced at $4,600
  • Lease terms range from 12-15 months 
  • Unfurnished
  • https://www.westedgecharleston.com
The Merchant Apartment  Rental Complex Short Term Common Room in Downtown Charleston

The Merchant in Downtown: 102 Sottile St, Charleston, SC 29403

(843) 779-1083

  • The Merchant in Downtown: 102 Sottile St, Charleston, SC 29403
  • (843) 779-1083
  • Studio pricing ranges from $1,550 to $1,645, One bed ranges from $1,475 to $2,175, Two bed two bath range from $1,919 to $2,525
  • Lease terms set at 12 month unless pre-approved by corporate
  • Unfurnished 
  • https://themerchantcharleston.com/?home=true
  • https://themerchantcharleston.com/gallery/
Caroline Luxury Apartment  Rental Complex Short Term Porch in Downtown Charleston

Caroline Luxury Apartment Rentals: 99 Westedge St, Charleston, SC 29403

(843) 350-0559

  • Caroline Luxury Apartments: 99 Westedge St, Charleston, SC 29403
  • (843) 350-0559
  • One bed pricing ranges from $1,425 to $1,850, two bed two bath range from $2,175 to $3,500,
  • Lease terms range from  3-15 months 
  • Unfurnished
  • https://livecaroline.com/?utm_knock=g&doorway=schedule
  • https://livecaroline.com/gallery/
511 Meeting St. Apartment  Rental Complex Short Term Pool at Downtown Charleston

511 Meeting St. at Downtown:  514 King St, Charleston, SC 29403

(843) 258-5196

  • 511 Meeting St. at Downtown:  514 King St, Charleston, SC 29403
  • (843) 258-5196
  • Studio pricing ranges from $1,395 – $1,627, One bed ranges from $1,463 – $1,810, Two bed two bath ranges from $2,311 – $2,842
  • Lease terms range from  6-15 months  
  • Select few that are furnished 
  • https://www.511meeting.com
  • https://www.511meeting.com/apartments/sc/charleston/gallery

Still Not Sure You Want To Rent?

Check Out Homes For Sale Downtown

North Charleston, Hanahan, Goose Creek and Ladson Apartments

Short and Long Term Apartment Rentals

Legends at Charleston Park Apartment  Rental Complex Short Term building at North Charleston

Legends at Charleston Park at North Charleston: 8850 Dorchester Rd, North Charleston, SC 29420

(843) 410-4885

  • Legends at Charleston Park at North Charleston: 8850 Dorchester Rd, North Charleston, SC 29420
  • (843) 410-4885
  • One bed ranges from $1,130 – $1,377, Two bed two bath priced at $1,130, Three bed two bath priced at $1,587
  • Lease terms range from 3-15 months 
  • Unfurnished
  • https://www.legendsatcharlestonpark.com
  • https://www.legendsatcharlestonpark.com/photogallery.aspx
Atlantic on the Avenue  Complex Short Term Living Room at North Charleston

Atlantic on the Avenue at North Charleston: 6880 Rivers Ave, North Charleston, SC 29406

(843) 243-9836

  • Atlantic on the Avenue at North Charleston: 6880 Rivers Ave, North Charleston, SC 29406
  • (843) 243-9836
  • One bed price ranges from $1,075 – $1,325, Two bed two bath ranges from $1,355 – $1,585, Three bed two bath is priced at $1,870
  • Leases shorter than 12 months will have premium fees
  • Unfurnished
  • https://atlanticontheavenue.com
  • https://atlanticontheavenue.com/gallery/
Alta Shores Complex Short Term Entrance Sign at North Charleston

Alta Shores Apartment Rentals at North Charleston: 2605 Elms Plantation Blvd, North Charleston, SC 29406

(843) 797-7277

  • Alta Shores Apartments at North Charleston: 2605 Elms Plantation Blvd, North Charleston, SC 29406
  • (843) 797-7277
  • One bed one bath ranges from $1,058 – $1,689, Two bed two bath range from $1,261 – $1,963
  • Lease terms range from 3-15 months 
  • Unfurnished
  • https://www.liveataltashores.com
  • https://www.liveataltashores.com/gallery.asp
The Channel at Bowen Complex Short Term Pool at Hanahan

The Channel at Bowen Apartment Rentals at Hanahan: 1000 Channel Marker Way, Hanahan, SC 29410

(843) 321-9941

  • The Channel at Bowen Apartments at Hanahan: 1000 Channel Marker Way, Hanahan, SC 29410
  • (843) 321-9941
  • Studio priced at $1,150, One bed one bath ranges from $1,175 – $1,385, Two bed two bath ranges from $1,295-$1,660, Three bed two bath ranges from $1,575-$1,899
  • Unfurnished
  • https://www.thechannelatbowen.com/channel-family-charleston-sc
  • https://www.thechannelatbowen.com/channel-family-charleston-sc/gallery
Coventry Green Complex Short Term at Goose Creek

Coventry Green Apartment Rentals at Goose Creek: 104 Gainsborough Drive Goose Creek, SC  29445

(843) 797-3005

  • Coventry Green Apartments at Goose Creek: 104 Gainsborough Drive Goose Creek, SC  29445
  • (843) 797-3005
  • One bed prices range from $1,072 – $1,202, Two bed two bath prices range from $1,138 – $1,268, Three bed two bath prices range from $1,403 – $1,533
  • Lease terms range from 6-12 months 
  • Unfurnished
  • https://www.coventrygreenapts.com/index.asp
  • https://www.coventrygreenapts.com/photos.asp 
The Mason  Complex Short Term Porch at Ladson

The Mason at Ladson: 1110 Mason Pond Pl, Ladson, SC 29456

(843) 314-4803

  • The Mason at Ladson: 1110 Mason Pond Pl, Ladson, SC 29456
  • (843) 314-4803
  • Studio pricing ranges from $974 – $1,618, One bed ranges from $1,107 – $1,939, Two bed two bath ranges from $1,220 – $1,929, Three bed two bath prices from $1,572 – $2,688
  • Lease terms range from 6-15 months
  • Unfurnished
  • https://themasonsc.com
  • https://themasonsc.com/gallery/

Still Not Sure You Want To Rent?

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Summerville, Moncks Corner, Nexton

Short and Long Term Apartment Rentals

Elevate at Brighton Park  Complex  Kitchen at Summerville

Elevate at Brighton Park at Summerville: 115 Great Lawn Dr, Summerville, SC 29486

(843) 620-0022

  • Elevate at Brighton Park at Summerville: 115 Great Lawn Dr, Summerville, SC 29486
  • (843) 620-0022
  • One bed price ranges from $1,150 – $1,525, Two bed two bath range from $1,305 – $2,085, Three bed three bath range from $2,355 to $3,060
  • Lease terms range from 3-12 months
  • Unfurnished
  • https://www.alapts.com/apartments/sc/summerville/elevate-at-brighton-park/
  • https://www.alapts.com/apartments/sc/summerville/elevate-at-brighton-park/photos
Parks at Nexton Complex  Building at Summerville

Parks at Nexton at Summerville: 2000 Front St, Summerville, SC 29486

(854) 201-3136

  • Parks at Nexton at Summerville: 2000 Front St, Summerville, SC 29486
  • (854) 201-3136
  • One bed prices range from $1,099 – $1,104, Two bed two bath range from $1,436 – $1,736, Three bed two bath is priced at $1,708
  • Lease terms range from 6-12 months 
  • Unfurnished
  • https://www.parksatnexton.com
  • https://www.parksatnexton.com/gallery/
Westbury Mews  Complex  Sign at Summerville

Westbury Mews Apartment Rentals at Summerville: 1425 Old Trolley Road   Summerville,  SC  29485

(843) 461-3707

  • Westbury Mews Apartment at Summerville: 1425 Old Trolley Road   Summerville,  SC  29485
  • (843) 461-3707
  • One bed prices range from $1,050 – $1,080+, Two bed one bath is priced at $1,050, Two bed two bath range from $1,150-$1,275, Three bed two bath is priced at $1,335
  • Lease terms range from 3-12 months
  • Unfurnished
  • https://www.westburymews.com
  • https://www.westburymews.com/gallery/
Legends at Azalea Complex Porch at Summerville

Legends at Azalea at Summerville: 3500 Pinckney Marsh Ln, Summerville, SC 29483

(843) 900- 3390

  • Legends at Azalea at Summerville: 3500 Pinckney Marsh Ln, Summerville, SC 29483
  • (843) 900- 3390
  • One bed prices range from $1,010 – $1,285, Two bed two bath range from $1,305 – $1,330, Three bed two bath range from $1,525 – $1,550
  • Lease terms range from 6-18 months 
  • Unfurnished
  • https://www.legendsatazalea.com
  • https://www.legendsatazalea.com/summerville/legends-at-azalea/photos/
South City Complex Kitchen at Summerville

South City Apartment Rentals at Summerville: 50 Cheryl Lane, Summerville, SC 29486

(843) 396-8348

  • South City Apartments at Summerville: 50 Cheryl Lane, Summerville, SC 29486
  • (843) 396-8348
  • One bed price ranges from $1,175 – $1,325, Two bed two bath range from $1,450 – $1,950, Three bed two bath range from $1,775 – $1,875
  • Lease terms range from 6-13 months 
  • Unfurnished
  • https://southcityapts.com
  • https://southcityapts.com/gallery/

Still Not Sure You Want To Rent?

  • Homes For Sale in Summerville
  • Homes For Sale in Moncks Corner
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Filed Under: All About Real Estate, Area Information, Home Seller Information

Charleston Real Estate Market Update

03/04/2021 by billbyrd

March 2021

Are we in a housing bubble, Charleston Real Estate Market Update
Are We In Another Bubble?

Everyone we encounter these days is asking us about the Charleston Real Estate Market. The simple answer is, it’s “Great”! Pretty shallow I know…but the big question is, are we in another bubble? So, our goal here in our Charleston Real Estate Market Update is to help you answer that question. And hopefully, you’ll find the information helpful and will allow you to make better real estate decisions for you and your family.

When we dove into the dynamics of both the national and local economy, as well as the real estate statistics, we discovered some interesting facts and unique trends! Never has any real estate market in recorded history been like what we are experiencing today here in the Charleston area.

The Charleston Real Estate Market Update

Since the market bottom in 2010 the Charleston Real Estate Market has been steadily rising. We have seen increases in the number of sales and listings each year as well as increases in the average price of homes in the area. As of February 2021, the average sales price in the Charleston Real Estate Market has risen to $445,402.00 This is partly due to the unusually high number of luxury homes that have been selling recently.

Average Sale Price Chart from the MLS Charleston Real Estate Market Update
The Average Sales Price In Charleston

What’s driving this as you can see below, is that the higher wage earners have been less affected by the current unemployment trends. As well as the low interest rates and migration trends that we will discuss below.

Unemployment and Income by Sector

This chart below shows the historical annual home prices going back to 1989 in the US.

Historical National Annual Home Prices
US Home Prices Since 1989

Want to know how much your home has gone up in value? We will be happy to provide you with a complete, full blown market analysis of your home and it’s value. Not a computer generated “guess-timate”!

What Impacts The Charleston Real Estate Market Today?

Migration

One of the contributing factors of our growth has been the migration habits of the population in the US. According to many sources, South Carolina has been one of the top 5 destinations for relocating folks for many years.

Projected Population Growth By Region

According a recent study by North American Moving Services, (North American Van Lines) the top 3 states people are leaving are: New York, California and Illinois. And the top 3 states they are moving to are: Idaho, Arizona and South Carolina.

Top Inbound and Outbound States in the US.
Map of Population Migration in the US

Unprecedented Activity In Charleston Real Estate Market?

Currently we’re seeing record high prices and record low inventories of homes for sale in the Charleston Real Estate Market. When you look at the data, it’s not that people are not putting their homes on the market, homes are simply selling very fast!

Which brings us to a common concern most people have. People are often hesitant to put their home on the market because they are afraid it will sell fast! Not typically a problem, but in this market, finding the next home is the challenge! When homes are selling so fast, it makes the timing of finding and closing on your next home a little more difficult. However, we do have some ideas and solutions you should consider if you have to sell your home before you can buy your next home?

Low interest rates are helping to fuel the demad causing prices to increase.

Low Interest Rates And Home Prices

The low interest rates are also instrumental in keeping housing in one of the more affordable ranges in history. Right now, households are surprisingly only spending 16% of their disposable income on their housing expenses due to the lower rates!

Housing Affordability
Low Rates Are Keeping Homes Affordable

A Look Inside The Numbers

If you look at the chart below, you can see that the number of new listings has come up from a low in December of 1,464 to just under 2,000 in February. Also, if you look at the year over year number between February of 2020 and February 2021, there is only a difference of new listings coming on the market is 174 homes!

Chart showing the number of new listings in the MLS Charleston Real Estate Market Update
Number of New Listings in the Charleston Real Estate Market

And on this chart, you can see that due to high demand, homes in the Charleston Real Estate Market are selling well under the mediam historical days on the market is down to 8 days!

Median Days On The Market of Single Family Homes in the Charleston MLS

In this real estate market update, what is happening, is that homes are hitting the market and due to extreme demand, they are selling fast. The speed of the sale is actually what is causing our inventory number to be at record lows. So if you are considering selling your home or rental property it doesn’t get much better than this!

Talk to us about our Multiple Offer Marketing Strategy, it’s the best way to play this market and maximize your gains! Discover how we can create an auction like environment for your home!

The chart below shows the number of Pending Sales in the Charleston Real Estate Market.

Chart of Pending Sales from the MLS Charleston Real Estate Market Update
Pending Sales in the Charleston Real Estate Market

The chart below shows the number of homes in the Charleston Real Estate Market at the end of February is 1,670. Better hurry before they are all gone! (just kidding!)

Chart showing the number of homes currently for sale Charleston Real Estate Market Update

Headwinds That Could Impact The Charleston Real Estate Market

As we move forward into 2021 the overall sentiment for our market is that we should have another strong year. With that said there are a few indicators that are worth watching. Even though inflation is still under 2% as of 2-28-21, there are some indicators that signal more inflationary pressures may be ahead.

Bond Yields

Recently Bond Yields have been rising, which typically move in the same direction as mortgage interest rates. The key indicator here is the 10 Year Treasury Bill. A rise in mortgage rates could affect the Charleston Real Estate Market by actually curbing the current buying frenzy. This would actually be good for the overall market! Slowing the pace of sales would ease some of the supply constraints we currently have. This would enable home buyers to buy homes without having to voraciously compete against each other!

Bond Yeilds Chart The Charleston Real Estate Market Update
Monthly Chart of Bond Yeilds
Rates and T-Bills
Chart Showing the Historical Correlation Between Interest Rates and Treasury Bills

A Stock Market Reversal

I am certainly not predicting this one, but it is something to keep an eye on. The stock market has been experiencing one of the longest bull runs in history and the experts agree that markets are cyclical. Some Wall Street experts are beginning to fear the “TINA” advantage may be ending. (There Is No Alternative)

So a downturn will eventually come. When? Your guess is as good as mine, but it is something to pay attention to as investor sentiment to have some impact on the Charleston Real Estate Market.

11 Year “Bull Market” Chart of The S&P 500

If investors in the stock market get spooked and begin to take profits it could have a psychological effect on investor sentiment. “The Wealth Effect” Which could lead to a more conservative mindset in the market and slow down real estate sales.

Hedge Funds and REIT’s in Real Estate

Right now, hedge funds are still buying real estate. The problem is they are winning bids with all cash contracts and beating out first time and move up buyers for homes in our local market. This has caused prices to go up. However, it’s something to pay attention to, when they start to sell and take their profits, it could signal a turn in the market. We will keep watch on this in future market updates.

For example, in our market, the California based real estate investment trust American Homes For Rent owns approximately 600 homes in the tri-county area. These are properties they have accumulated since the 2012.

Lumber Prices

Currently lumber prices are approximately 300% higher than they were a few years ago. Hopefully as the economy begins to reopen lumber prices will move back into a more normal range.

Chart of Lumber Prices
Chart of Lumber Prices

The Charleston Real Estate Market Update – Outlook

Could March be a turning point in our market, or will it continue to be business as usual? Well, in my opinion, I believe the future of the Charleston Real Estate Market looks pretty good. Who knows what the future may hold but I can tell that I’m confident in the future of Charleston Real Estate. Sure, at some point it’s going to change, but for now unless things change it looks pretty good!

So, what’s making me so confident? Charleston is!

Contributing Factors To A Positive Outlook

As the economy rebounds,we have fewer unemployed in Charleston. In fact, when the leisure and hospitality industries return, we should be pretty close to pre-covid employment numbers in the low country.

Here is a look at income and employment by sectors below.

Unemployment and Income by Sector
Lesure And Hospitality Has Been Hit The Hardest

The Reopening Begins!

Also, as of 2-27-21 the Governor of SC loosened the rules concerning hours for resturants and public gather restrictions. This should give a boost to the unemployed service sector that has been hit the hardest here in the low country.

Covid Case Going Down!

Yes, Covid cases are going down dramatically! And we now have a vaccine! Obviously, it’s not time to let our guards completely down but we are certainly moving in a positive direction.

Chart Provided By The New York Times

Unfortunately, Covid-19 is most likely something we will have to live with for the rest of our lives. As we do with many other previous pandemics.

Previous Pandemics
Chart Of Death Tolls From Previous Pandemics

The Ports Are Rocking!

The Charleston Port ship container volume is back up to pre-covid levels. A new Wal Mart distribution center in the area is evidence that large businesses are looking at Charleston as a strategic destination for their businesses.

Market Update Charleston Por Container Volume Chart

The Charleston Real Estate Market Update – Conclusion

We have a lot to be thankful for! Charleston is coming back and coming back strong. We have fewer unemployed. People have more disposable income and higher savings rates than before; interest rates are low and government stimulus is on the way!

We may have some housing supply constraints ahead. But, at the time of writing this Charleston Real Estate Market Update the trends point to another strong year ahead!

Are we in a bubble? I don’t think so, but time will tell. Just keep following the economic numbers and keep an eye out for our Charleston Real Estate Market Updates!


If you’d like more information on the current market or would like to discuss how we can help you, please feel free to reach out to Bill Byrd 843-972-7670 and Waverly Byrd 843-790-2675


Please Feel Free To Share!

If you know anyone that you believe would enjoy or benefit from this content, we would be incredibily flattered and grateful if you shared this article!

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The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill


Contact Us at 843-972-7670


Filed Under: All About Real Estate, Area Information, Home Buying Information, Home Seller Information Tagged With: Market Report

How Do I Buy A Home If I Have to Sell Mine First?

01/31/2021 by billbyrd

Confused Expert. Charleston Real Estate Defies The Experts!

Many people ask us year after year, How Do I Buy A Home If I Have to Sell Mine First? It’s one of the most important questions many home sellers ask. Having to sell an existing home to qualify for a mortgage on a new home poses some unique challenges. However, the answer can be vastly different depending on the market of the moment. In a buyer’s market the process is going to be very different than it is in a seller’s market.

Check out 8 Steps To Buying A Home . When you completely understand the best practices for buying a home in todays market everything gets a little easier!

Buyers Market or a Sellers Market?

In a buyer’s market the question, How Do I Buy A Home If I Have To Sell Mine First is usually not a problem. This is because when there are plenty of homes for sale, buyers have more options. The issue is a little more problematic in a sellers market. In a seller’s market the challenge is that with low inventory and high demand, the best homes sell very fast! So the timing of both sales and moving can be tricky. If your new loan requires you to have your home sold before you close on your new one, you only have a couple options. Which makes it important to have a Plan A, B and C!

Planning is the most important step when Buying Land To Build on.

Plan A – How Do I Buy A Home If I Have to Sell Mine First?

In Plan A, you’ll sell your existing home while you search for and buy your next home simultaneously. Hopefully timing it so you can close on both at the same time!

How To Sell Your Home And Get Multiple Offers!

The key to this strategy is that you start looking at homes with your agent well before you list your home for sale. This helps you know your options, discover what’s available and get a good feel for the market. Narrowing down your options in advance will help speed your decision process up for when your home finally does sell. Because once it sells you’ll have to move fast to meet your closing deadline. Which can be tricky! Once your home sells and you’ve found your next home, your agent will coordinate both sales so they close simultaneously. And…you only move once!

Pro’s…

If you are able to pull this off it’s a win, win, the best of both worlds! You’ll make one move, and it will be a less stressful than moving twice. This is everyone’s first choice!

Sometimes Buying on a tight time frame can cause unnecessary stress. How Do I Buy A Home If I Have to Sell Mine First

Con’s…

In a competitive seller’s market this may be difficult. There is a good chance that your home will sell fast, and that’s a good thing! But now, you’ll be on the clock to find a new home. In this scenario your choices will be limited to the available inventory of homes currently on the market. You’ll also have to compete against other motivated buyers for same homes in a low inventory market. Just a little stress!

Consequently, if you can’t find the right home fast enough you might have to go to Plan B! Plan A can be tough to pull off due to having a limited amount to time and the level competition for homes in the market at the time. Which in turn will put a lot of pressure on you to find and contract on a great replacement home. You also may not negotiate the best deal for the same reasons. Ultimately you may not be 100% satisfied by your choice because you had to do it under so much pressure!

Plan A.1 – The Bridge Loan

For those with a sunstantial amount of equity in there home, they may qualify for the opportunity to use a bridge loan. A bridge loan is a loan that uses your home equity as collateral. Similar to a HELOC, (home equity line of credit) but different.

A bridge loan is designed to be a short term bridge allowing you the opportunity to buy your next home and then sell your home. The downside is that you’ll have two payments for a short period of time. The upside is that you can sell your home and not worry about having to find a suitable replacement home.

Tip: Not every bank offers a bridge loan opportunity! If this is something you want to look into, give us a call and we will be happy to share with you our trusted vendors. 843-790-7000

Plan B – How Do I Buy A Home If I Have to Sell Mine First?

Plan B revolves around selling your home and then moving into a temporary rental. This option allows you to take your time searching with your agent for your next home. Having helped many of our past clients sell their home and buy their next one in this way, this is, in our opinion the best strategy.

Pro’s…

Plan B is probably the least desirable of all of the options for most people. However, Plan B will allow you to be more aggressive and competitive when buying in a seller’s market! Being a non-contingent buyer on the buy side will give you a great advantage. This strategy will give you the best opportunity to make a great deal on a great house with the least amount of stress! Your chances of winning the bid will be much greater if you don’t have to sell your home first. Unfortunately, it often takes having to experience losing one of two homes first before most folks realize that this is the strategy they need to take.

Mini Vacation!

Living in a short term temporary apartment can be like a vacation.

Consequently, having to wait a couple months for your dream home to hit the market may not actually be that bad! Depending on the time of year you may find an off-season rental at the beach! You may find a comfortable apartment with lots of amenities like, swimming pools, an on site gym, game rooms and more! You might find a great short-term rental in the Historic District in Downtown Charleston! Who knows, if you treat it like a vacation it might be fun!

Con’s…

You will have to move twice. You will have to put most of your stuff in a temperature-controlled storage unit. And, you’ll be living like a gypsy!

Plan C – How Do I Buy A Home If I Have to Sell Mine First?

Our Plan C solution for, buying a home when have to sell yours first, involves a home sale contingency. A home sale contingency is not always the best solution for a number of reasons. But lets first look at what it can potentially do for you.

What can a home sale contingency do for me?

A home sale contingency will allow you to put a home under contract and allow you time to sell your home. Then once your home goes under contract, you remove your contingency on your new purchase and then proceed to close on both properties.

Real Estate “Layaway”!

A home sale contingency is real estates version of “layaway”. However, in many situations your goals and the sellers goals are very different. Most sellers want their home sold and are not interested in waiting for a buyer to sell their home. In this case you may ask for a Contingency with a First Right of Refusal. Having the First Right of Refusal will allow the seller to keep their home on the market while you try to sell your home for a specific time frame.

Once the seller gets another acceptable contract, they have to notify you that they have received an acceptable offer. Then based on the terms of your agreement you’ll have a certain amount of time to show evidence that you can remove the contingency and proceed to close. If you can’t provide the required evidence to remove the contingency you lose your First Right and the seller can move forward with the other contract and sell the home to the new ready, willing and able buyer.

Evidence required to remove a home sale contingency.

Typically a home sale contingency with a First Right of Refusal will require evidence that shows you can close on the property. This may be a fully ratified contract on your home with all contingencies removed. And, evidence that the buyer of your home is well qualified to purchase it. Or it could be evidence that you have sufficient cash in the bank to close the sale without a loan!

Experience Counts!

Home sale contingencies have lots of moving parts and are best negotiated by an experienced agent. Over the years we have negotiated lots of contracts that have used home sale contingencies. In a more balanced market or more of a buyers market you’ll see more contracts with home sale contingencies. However, in a seller’s market these are not as common.

Find your next home by searching here!


Over the years, we’ve handled these situations in a variety of ways. We will be happy to discuss the best solution for your unique situation.

If you do negotiate a home sale contingency and sell your home, from this point it’s just like any other sale. After you sell your home your buyer will complete their inspections and remove any other contingencies. At this point you’ll provide the seller of the home that your buying with your required evidence that you can close thus removing your home sale contingency. Then, at this point you can move forward to close on both homes.

Pro’s…

You go shopping and pick the best home for your family’s needs! When you find it, you negotiate your deal and move forward. It doesn’t get any better than that!

Con’s…

In a seller’s market, where buyers are competing for homes, most sellers often won’t consider an offer with a home sale contingency. Most of the time they prefer to wait for a competing offer without a home sale contingency. In a buyers market this strategy is more successful.

Conclusion

How do I buy a home when I have to sell mine first

So, there you have it, three proven strategies that will all work in the appropriate situations. All you need is a flexible mindset, an open mind, and you can can successfully sell your home first, before you buy your next one!

We’ve helped many people over the years who have opted for one of the three plans. Each one found success while buying a home when they had to sell theirs first. So you see, whichever direction you choose you can get the results you want. And we can help you too!

Check out 8 Steps To Buying A Home . When you completely understand the best practices for buying a home in todays market everything gets a little easier!


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    Spring Charleston Market Update

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill


Contact Us at 843-972-7670


Filed Under: All About Real Estate, Home Buying Information, Home Seller Information Tagged With: buying, sellers market, selling

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