The real estate landscape in South Carolina is undergoing unprecedented challenges, with home sales experiencing a decline for the 22nd consecutive month. This trend, fueled by factors such as higher borrowing costs, a shortage of inventory, and soaring prices, is reshaping the state’s housing market. Let’s delve into the latest data from the S.C. Realtors Association to understand the current state of affairs.
According to recent data, residential transactions in August plummeted by more than 10 percent, marking a continued downward trajectory since December 2021. During this period, 8,280 homes changed hands, reflecting a market grappling with a median price of $332,500—4.2% higher than the same month in the previous year.
The surge in housing costs during late summer contrasts with the relatively modest increases observed in the preceding six months, where prices rose less than 3 percent. Although this hike is not reminiscent of the double-digit percentage surges witnessed during the COVID-19 pandemic, the stark reality is that a South Carolina home now costs approximately 47 percent more than in March 2020 and more than double the price from a decade ago.
Rob Woodul, President of S.C. Realtors, sheds light on the critical role that future decisions by the Federal Reserve Board will play in shaping the housing market. With inflation as a key determinant, Woodul emphasizes the commitment of the Federal Reserve to control inflation, stating, “They have said they will do whatever it takes to get inflation under control, and that’s what they are doing.”
Woodul notes a slight uptick in new home sales, particularly as the scarcity of already-built houses persists, with owners holding onto locked-in low-interest rates. However, he cautions that any slowdown in new construction could further intensify the housing crunch, driving prices even higher.
Despite the challenges, South Carolina remains attractive due to its job growth, still drawing in new residents. Houses are selling, albeit at a pace reminiscent of 2017 and 2018. Woodul points out, “We just have to find a place for them to live.”
Every major market in the state reported declining sales in the last full month of summer. Charleston, the largest-volume region, saw a 4.4 percent dip, while Columbia experienced a 14.2 percent decline, and Greenville slid 8.9 percent.
The challenges facing South Carolina’s real estate market are multifaceted, encompassing rising prices, dwindling inventory, and fluctuating interest rates. As the Federal Reserve’s decisions continue to shape the trajectory of the housing market, industry players must navigate these uncertainties to find sustainable solutions for the residents and newcomers seeking a place to call home in the Palmetto State.
