Image Credit: Realtor.com
Well we can definitely tell it’s summer here in Charleston SC, because the temperature outside is hovering around 96 degrees and the heat index is around 105, and it’s not even August. Unfortunately, for buyers looking to purchase in the area they are experiencing much of the same thing, but for how long? Is there about to be a new bubble? In a recent article by Reuters.com, new single-family home sales hit their highest level in nearly 8-1/2 years in June flaming the fire of talks of if the Fed will soon raise interest rates. A Reuters survey of economists stated, the government is expected to report on Friday that the economy grew at a 2.6 percent annual rate in the second quarter, accelerating from the 1.1 percent pace logged in the January-March period.
What’s this mean for the Charleston SC housing market? Considering there is not much inventory and consumer sentiment is so high suggests that there is likely not to be any slow down in real estate sales any time in the near future. With the election looming things might take a slight bump which is normal in an election year, but the simple principles of economics are what’s driving our market locally. If there aren’t a lot of desirable properties on the market, and more buyers than inventory then prices will continue to rise. Which has been the case for the last 5 years.
Recently Realtor.com ranked Charleston SC #9 out of potential housing bubble cities in America citing falling unemployment, relatively affordable housing compared to other hot markets, and increasing pay as factors contributing to a very hot market. According to a recent article by The Post & Courier, The local market has about 5,400 homes listed as “active” for sale in the Charleston Trident Multiple Listing Service, and, at the current rate, about 25 percent of those will be sold in July. Still, inventory is down 12.5 percent from a year ago, and a more “normal” market saturation rate would be about 6500 homes for sale. Mount Pleasant especially has been getting a lot of criticism from locals about it’s building too fast for growth sparking talks of a building moratorium which would only increase prices more in the already most expensive town to live in South Carolina.
Bottom line, as long as there are people looking to buy and a lack of inventory you better expect to be in a potential bidding war at any given moment for a nice home. If you’re looking at the “sweet spot” of $150,000 – $200,000 then you had better be willing to live away from the suburbs of Charleston because affordability is still a concern for most looking to live in the Low-country.