Jobs are still lacking as a critical component to an Economic Recovery and debt concerns abroad have allowed fears to rekindle. Hope is on the horizon for 2013 for commercial real estate if we can make it and residentially, the Charleston Trident Association of Realtors report that 972 homes sold at a median price of $205,000 in July; compared to July 2011, when preliminary figures showed 829 homes sold at a median price of $180,000. Year-to-date, sales volume is 10% higher and the median price has increased 2.5% compared to this time last year. 5,940 homes have sold at a median price of $182,305 thus far in 2012. Through July 2011, 5,395 homes had sold at a median price of $177,837. Inventory has declined 26% from a year ago, with 6,328 homes currently listed as actively for sale in the MLS. Days on market dropped below 100 days for the first time since December 2008, to an average of 97 days in July.
According to the Real Estate Research Corporation (RERC) and the CCIM Institute’s Investment Trends Quarterly Confidence Scale of 10 (10 being Excellent), Commercial Real Estate Investments (6.0) are outpacing all the recovery good news ranking ahead of Stocks (4.7), Bonds (4.3) and Cash (4.7)
supported by the NCREIF Property Index Rate of Return for 3 Months at 14.26%. Overall there is the perception that Commercial Real Estate Investments pose more reward than risk and more value than market price presently. Good news indeed.
Statistically, our National Vacancy Rates are improving with 17.3% for Office, 9.6% for Industrial, 11% for Retail, 5.2% for Multi-Family/Apts and 49% Occupancy for Hotel Properties. Investors across the country are experiencing Rates of Return at 8.7% for Office, 9.1% for Industrial, 8.3% for Retail, 7.6% for Apartments and 10.6% for Hotels, while calculating corresponding Capitalization Rates of 6.3%, 7.3%, 7.5%, 6.0% and 6.5% respectively.
The Charleston Office Market (improving) is slightly above 14% in vacancy with average rental rates just above $17 Triple Net. The Retail Market (improving) in town is 8.4% vacant with Downtown boasting a 5.2% vacancy as King Street is a national name and even the Super Regional Centers are close to 100% occupied. The Industrial Sector (improving) is 12.1% vacant.
Owner-Occupied transactions are consistent. Local banks are working aggressively to fund deals and some investment properties are getting funded.