Long-time hot SC housing market vulnerable to price decline after all. Here is what’s happening
It’s still a great time to be a home seller in South Carolina.
But there have been signs that might be changing.
The South Carolina housing market jumped by 16.6% in September year over year, the most recent South Carolina Realtors statistics show. It’s the latest in a seven-month-long trend of rising home prices in the Palmetto State. However, like some markets around the U.S., the increases have slowed in recent months as interest rates have risen, experts say.
“Although housing prices in South Carolina have risen significantly since the onset of the COVID-19 pandemic, a change in this multi-year trend emerged in the summer of 2022 for the first time — the rate of these price increases began to decline, said Joey Von Nessen, research economist at the Moore School of Business at University of the South Carolina.
For example, South Carolina Realtors statistics show the 2022 year-over-year growth in the state’s median sales price peaked in May at +18.4% and has generally pulled back since then. The year-over-year growth was +17.1% in September, the statistics show.
“This is largely the result of tapering housing demand that has resulted from rising mortgage interest rates, which makes housing less affordable for the average homebuyer,” Nessen said.
Housing markets across the U.S., including South Carolina’s, saw a boom in home sales after the height of the COVID-19 pandemic that continued into this year. However, MarketWatch reports that real estate sites like Zillow, realtor.com and John Burns Real Estate Consulting have noted price drops in large cities in September.
For instance, Los Angeles and San Francisco both saw 11% declines in prices from their peaks around March and April. San Diego saw a 9% drop.
For South Carolina in particular, high demand and insufficient housing supply to meet it, has mainly driven the state’s still high prices, said Morris Lyles of ERA Wilder Realty and 2021 South Carolina Realtors president.
“One factor that possibly is causing the continued demand is that housing supply has lagged behind in South Carolina,” Lyles said. “We also have seen an influx of people moving to South Carolina and also a large population that is in their first home buying age range and we are not seeing the supply keep up with the demand. Builders are building, but the increased cost of production is impacting the affordability in some areas.”
Brad Allen, CEO of The Art of Real Estate in Columbia, said however that despite the ever-rising prices in South Carolina this year, his firm is still having little trouble selling homes.
“We are still seeing multiple offers … we are still trending at 100% list to sale,” Allen said. “People are still running to the South and we’ve still got supply and demand.”
People can still sell their $1 million New Jersey home and then move to a cheaper home in South Carolina, Allen said.
Lyles agreed that despite the rising costs, South Carolina is still a good deal overall.
“Another factor is that when comparing South Carolina’s median prices to many markets in the United States, real estate in SC is still somewhat affordable when contrasting with other markets,” Lyles said.