Is the high-end real estate market heating up on the Isle of Palms?

IOP High-endA couple of weeks ago I read an article in the Charleston Post & Courier about the Charleston area luxury market heating up.  In the article the journalist mentions the return of buyers and inventory levels offering buyers a plethora of options.  This article made me want to look specifically into the Isle of Palms high-end market for a better understanding of where things stand, and where things are going.  We know the second home market is usually about a year behind the primary market. The primary market has been hot for sometime and this should mean good things to come for the second home / investment market.

While most people would consider owning on the Isle of Palms high-end in itself, for the purpose of this article, I categorized high-end as $1,675,000 and up.  Lets take a look at the average price, days on market, homes for sale, closed sales, and pending sales for the area.

Average Price– I have to admit this one surprised me a little.  Looking at the graph below (1,675,000 and above), you will see that the average sales price is down 22.7% compared to this time last year.  Keep in mind this is only for homes that sold for  $1,675,000 and up.

44-CHS-Isle of Palms
Average Sales Price
Rolling 12 Months

Days on Market – This one is a positive for sellers.  Why?  Because homes are moving faster and sitting on the market for a shorter period of time.  In fact,  the difference between now and this time last year was -19.1%.

Homes for sale – I found this one interesting too.  Statistics show the number of high-end properties for sale on the Isle of Palms decreasing .  Since August of 2010, inventory has been reduced by 30.3%., and 5.5% in the last year. That’s a big number!  I feel much of this is due the sweep of the distressed sales in the prior two years.

Closed Sales – Another positive for sellers!  The proof is in the pudding, since this time last year, home sales starting at $1,675,000 are up 33.3%.  Pent up demand has apparently burst for the high-end buyer.

44-CHS-Isle of Palms
Closed Sales
Rolling 12 Months

Pending Sales – You guessed it.  Yet another upward trend. The chart below shows a 30% increase from this time last year.

44-CHS-Isle of Palms
Pending Sales
Rolling 12 Months

My take on the high-end side of things…

First lets take a look back.  The average sale price is down, the average number of days a home is on the market has declined, there are fewer homes for sale, there are more closed sales, and pending sales are up. Homes are sitting on the market for a shorter period of time, reducing the number of homes for sale at a faster rate, and in turn, creating a sense of urgency among buyers.   On top of that, interest rates are slowly climbing. All this leads to the lesson we learned in economics about supply and demand.  When there is less supply, and more demand, home prices rise.

Low inventory levels + buyer demand = a seller’s market.

It might be just a tad premature to call it a seller’s market, but it’s coming. While the average price per sale is down, I would bet my bottom dollar that homes prices will be heading in an upward direction in the near future.  If you are a buyer, there is still time, but be aware, the market is changing.  So, is the high-end real estate market heating up on the Isle of Palms?  I would say so!

P.S.  Two oceanfront homes have sold on the Isle of Palms in the last two weeks for an average sales price of $2,945,000.  Another is under contract.  Now thats hot!

1307141 – Details: 116 OCEAN BLVD, ISLE OF PALMS, SC – $2,690,000 – Sold

1312240 – Details: 110 OCEAN BLVD, ISLE OF PALMS, SC – $3,200,000 – Sold

*statistics taken from CTARMLS

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