Exclusive: Homes Continue to Sell Briskly across S.C.
Thursday, August 23rd, 2018
At a time when national homeownership rates remain below pre-recession levels, demand is strong for homes in South Carolina.
July figures from the South Carolina Realtors industry group show that compared to July 2017, homes were selling more quickly and for more money than the year before.
“I think it’s been that way for a while,” said Dr. Elaine Worzala, director of the Carter Real Estate Center at the College of Charleston. “The inventory is still relatively scarce and the prices have been rising.”
For the 12-month period ending in July, the median sale price rose 5.9 percent to $199,000 across South Carolina. Inventory levels are down slightly compared to a year ago.
Pending sales were up 4.2 percent. The increase has been tilted toward more expensive homes. Pending sales for homes $200,001 and above saw double-digit-percentage increases, while pending sales were down for homes priced $150,000 and below.
That could be a function of availability, as inventories of homes priced $200,001 and above were up, while homes $150,000 and below saw double-digit-percentage decreases.
“Prices between $100,000-$200,000 are starter homes, depending on where you live,” Worzala said. “The inventory’s not there.”
Rising prices for land and materials could be having an impact, she said.
“It’s much easier to make the sales margin you want if you build a more expensive home,” Worzala said.
As any real estate agent will tell you, all markets are local, and trends are not uniform across South Carolina.
“When you look at the Charleston market overall, it’s pretty bullish,” said Alan Donald with Keller Williams Realty. “When you look at the submarkets, they’re behaving differently.”
He said homes are taking longer to sell in Mount Pleasant and Daniel Island due to rising prices and inventories. In Goose Creek, Hanahan or Summerville, however, “if it’s priced right, it’s selling fast.”
“It’s a fractured market,” he said. “And it’s mostly fractured by price.”
In the Upstate, homebuilders are getting more active and there’s increased motivation for homeowners to put their houses on the market, according to Amanda Jones, executive vice president and broker in charge at Coldwell Banker Caine.
“With interest rates going up, if they’re going to have a mortgage on their next home, now’s the time to sell,” Jones said. “There are also some people who had been renting out a home because they hadn’t been able to sell it.”
In metro Columbia, median prices and total number of sales are up year over year. The average number of days on the market until sale is 52 (the statewide average is 86 days).
Elaine Gillespie with The Carolina Agent Group believes it’s a seller’s market.
“I've had several sales that are above asking price with multiple offers,” she said.
Gillespie said buyers need to have their financing in place when they make an offer in the current market. They should also look for homes with renovation potential, such as unfinished space, that can boost the resale value later.
“Some sellers are determined to get close to their asking price – it gives them bragging rights,” Gillespie said. “They can save face and you can get a better value if you pay closer to asking price, but ask seller to pay your closing costs.”
Average home sale prices in Greenville and Spartanburg hit record numbers this summer. The average number of days on the market got down to 43 in Greenville in June.
Jones said positive publicity due to numerous livability awards is attracting a mix of professionals, retirees and business owners to the Upstate.
“We’ve seen our area become a lot more attractive,” she said. “People are not necessarily moving here because of a job. They’re moving here because they want to be here.”
Donald said Charleston-area home buyers include retirees from the Northeast and Midwest. While he said prices might be getting “a little unaffordable” in the region, “for a coastal city, compared to other coastal cities, you’re still affordable.”
South Carolina’s homeownership rates are strong. The U.S. Census Bureau reports that in the second quarter of 2018, the Palmetto State’s homeownership rate of 74.1 percent trailed only West Virginia’s 74.6 percent.
“It’s surprising that it’s as high as it is, compared to a lot of other states,” Worzala said.
Nationwide, the Census Bureau found that homeownership rates have not rebounded from the recession in any age group. The national rate peaked at 69.2 percent in 2004. It ended 2017 at 64.2 percent, which is where it was in 1995.
Experts listed a number of reasons for lower rates, from affordability to people choosing to live a more transient lifestyle.
“Homeownership is usually a long-term asset,” Jones said. “We’re also seeing seniors renting because they don’t know where they want to live.”
South Carolina’s homeownership rate peaked at 76.4 percent in the second quarter of 2009 and again in the third quarter of 2010. It sank to 66.1 percent in the fourth quarter of 2015.
Experts said the previous high homeownership rates were likely inflated by speculators during the real estate bubble.