The pace of home sales have slowed in the Charleston region this year, but prices are still creeping up as the supply-demand curve remains out of balance.
Sales for the first quarter were up 0.2 percent compared to the same period last year, while the median home price climbed 4.2 percent for Charleston, Dorchester and Berkeley counties, according to the multiple listing service.
The median home sale is now $421,000, up from $404,000 a year ago.
New construction coming online, combined with more sellers finally jumping off the fence, has kicked up inventory 11 percent year over year. But the 2,756 homes on the market, or about two months of inventory as of April, is still a far cry from a healthy market.
The region needs another 7,000 homes, or a roughly six-month supply, to become a balanced market where neither sellers nor buyers have the upper hand, said Matt O’Neill, CEO of Matt O’Neill Real Estate in Mount Pleasant. But it would take a rather catastrophic event for that to happen.
“The only way you get from 3,000 to 7,000 homes is if everyone loses their jobs,” O’Neill said. “It’s if no one can buy a house or no one moves to Charleston … and we lose all the supply of people.”
With neither scenario in the future, more buyers than ever are looking for turnkey homes to justify record-high prices.
First-time homebuyers sticking to a budget typically don’t have the luxury to pay top-market prices and then replace roofs, update heating and air-conditioning systems or renovate kitchens, said Kim Meyer, real estate agent with Smith Spencer Real Estate.
“Most buyers are looking for the big-ticket items to already be addressed for resale,” she said.
Sellers who have their houses listed at top value but need too much work are sitting a little longer, Meyer added, but she’s still seeing multiple bids on homes every day, especially in Summerville.
With more land to build new homes, towns like Summerville, Goose Creek and Moncks Corner are growing in popularity, said Drew Grossklaus, president of the Charleston Trident Association of Realtors and director of sales and East Cooper broker-in-charge of William Means Real Estate in I'on Mount Pleasant.
“The thing is that demand just continues to be so high,” Grossklaus said. “We have a tremendous amount of people that still want to be here and are moving here every day.”
Charleston is one of the fastest-growing cities in the fastest-growing state in the U.S., according to the U.S. Census Bureau. As a whole, South Carolina’s population grew by 1.7 percent from July 2022 to 2023, more than any other state. Florida and Texas followed with 1.6 percent growth.
In addition to natives relocating within the region, the majority of sellers flocking to the Southeast still come from major markets such as California and New York and drive-to cities like Charlotte and Atlanta.
“Once they get here, they don’t want to leave either,” Grossklaus said. “So that’s an important part. We don’t see a lot of migration in and egress out.”
In upscale communities like Daniel Island and Kiawah Island, demand is higher than ever.
In March, Daniel Island notched the sale of its most expensive home ever at $10.5 million. The 6,709-square-foot house on Old Compass Road fetched roughly $1,500 a square foot — three times more than a previous record-breaking $6.4 million sale that averaged about $447 a square foot in 2021.
On Kiawah Island, the average sales price is up nearly 400 percent from pre-pandemic times. This year's single-family home average is already running around $3.4 million compared to $943,400 in 2019, according to Dan Whalen, president of Kiawah Island Real Estate.
Westward of Charleston, the market also has become increasingly popular as Volvo and Boeing continue to draw in suppliers. Land is still available to build upon and homes are more affordable, Grossklaus added.
“This is where a lot of the workforce growth is happening,” he said. “Especially for people that are looking more for that home where they can get in and start the job now.”
Interest rates will continue to be a major factor this year, Grossklaus added. As recent as March, there were talks of three potential rate cuts this year by the U.S. Federal Reserve, bringing mortgage rates down to a more manageable 5-percent range. But the feds will most likely push cuts, if there even are any, to later this year. As such, the current 30-year fixed-mortgage rate is 7.17 percent as of April 29 and 6.44 percent for a 15-year fixed-mortgage rate, which might be here to stay a while. Both are about 0.75 percent higher than this time last year.
But even with the cost of ownership so high, O’Neill noted his April pending sales are up 65 percent year over year, and he expects them to stay high through the summer.
“This time last year, the market was still in shock from high interest rates and many waited for things to settle,” he said. “What you’re seeing now is people are just getting on with their life and they’re finally putting their house on the market again.”
