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Charleston Market Close to the Edge of Collapsing

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Is the Charleston Market Close to the Edge of Collapsing? In this September 2024 Charleston Real Estate Market Update we are going to investigate the national numbers. (Charts with Black Background) Then take a look at the local numbers affecting the market. (Charts with a White Background)

Micro-Market

It’s important to understand that the Charleston Real Estate Market is what is considered a micro-market. A micro-market is one of many markets that make up a much larger market within the real estate market. And, with that said, each neighborhood has its own market dynamics that affect the sales in that area. However, you will notice is that the local numbers in the Charleston area look similar to the national numbers. So, let’s take a look and see if the Charleston market is close to the edge of collapsing!

Charleston Home Search

Inflation

First let’s look at the Bureau of Economic Analysis recently published numbers on inflation. Some of this may be surprising to you and some of it may not be.

Since the Fed began its process of raising rates, they have effectively lowered inflation. However, some of the impacts of this are still lingering in our everyday world of personal consumption. The following charts from the Bureau of Labor Statistics offer an interesting look at some of the impacts we are dealing with.

It’s not all bad news. Some items that have dramatically risen due to inflation. Then have begun to fall in 2024. And, I’m sure we can all agree they are not falling fast enough!

According to the Bureau of Labor Statistics, many of the goods and services we rely on everyday are still rising!

Interest Rates

The general consensus is that the Fed has cooled the economy enough and will soon begin to slowly reduce rates. Below is a chart of the history of our interest rates on mortgages. Still below the historical average between 1972 and 2023.

As we consider whether the Charleston market is close to the edge of collapsing, two things that are important when we look at mortgage interest rates. The rising rates have reduced the amount of home a homebuyer can buy. Second, folks that bought a home when the rates were low, are less interested in trading up their home. Many people are reluctant to give up their current low-interest rate mortgage for a higher rate loan. This dynamic has slowed the number of sales by reducing the number of homes coming to market. This low supply has ultimately caused home prices to continue to rise. So now, home buyers are buying higher priced homes and paying higher mortgage rates too! But rates are still well below the historical average between 1972 and 2023.

Buyer’s that wait for rates to go down may end up paying a higher price for a home. Thus, possibly negating any perceived savings by waiting for lower rates.

So, is Charleston Market Close to the Edge of Collapsing? There is more to the story!

Affordability

It is currently more expensive for a homebuyer to buy a home now than it was before the housing crisis.

Unlike the events that led up to the housing crisis, 76% of all households now have more than 50% in Home Equity! During the housing crisis many homebuyers were over leveraged into adjustable rate mortgages with very little equity. So, when their rates adjusted upward they had little equity to absorb the loss in value when market turned down. Many homeowners had to sell at a loss, selling “short”. Sellers either lost their homes to foreclosure or had to sell as a “short sale”. So, is the Charleston Market Close to the Edge of Collapsing today?

According to the experts, rates are going to come down a little!

Many experts don’t expect a return to low 3% interest rates, but they do expect some easing. Maybe into the 5% range. Knowing that rates will soon come down somewhat, a buyer can always buy now and refinance later.

An important reason to buy now before rates start dropping, is that as more buyers come back into the market, the supply of homes will likely decrease. This reduction of inventory and increased demand will drive home prices up! Couple that with local development constraints, builders won’t be able to build enough homes as demand comes back. So, a buyer that waits for rates to go down may end up paying a higher price for a home. Thus, negating any saving in interest by waiting for a lower interest rate.

National Home Prices – Charleston Market Close to the Edge of Collapsing

In the following chart, you can see if you bought and held long term, buying a home has been a great investment! Even if you bought at the absolute top of the market before the 2007-2009 housing crisis, your property still has dramatically appreciated!

Looking at recent home sales in the following chart, the number of home sales have been trending down since 2022.

Between 2022 and 2023 the numbers of sales nationally dropped significantly. In 2024 the projections are that the market will improve slightly, but only minimally.

Looking at both the chart above and below, you can see that the national market and the local Charleston market look similar! However, the local number of sales have not pulled back as far as the national numbers. As you see the national numbers have pulled back to the markets bottom after the housing crisis. Localy, we’ve only pulled back to the pre-covid era levels. During the pre-covid era the real estate market in Charleston was a very balanced market. A balanced market is one where supply and demand are roughly equal.

Local Home Sales and Inventory – Charleston Market Close to the Edge of Collapsing

Get Your Home Value Here

Locally sales have tapered off since the height of the covid era “great migration” in early 2021 until now. It’s important to note, the covid era migration patterns were an anomaly. As well as the market they created for home sellers. Many experts feel that this unique series of events created an abnormal market of dramatically rising prices. A market that is now beginning to slow down some what.

sales have tapered off since the height of the covid era "great migration" is the Charleston real estate market on the verge of collapsing?

Evidence of this winding down can be seen in the increasing number of homes on the market. And a slowing of the rate at which they are selling.

Homes inventory is increasing. Is this a sign that the Charleston real estate market is collapsing?

In Conclusion – Charleston Market Close to the Edge of Collapsing

In conclusion, I don’t see our market crashing and prices dropping dramatically however, we are currently tapering off somewhat. As rates come down, we will see more buyer demand. Depending on how many homes get listed for sale, we may see prices continue to push higher.

What Could Derail the Market?

The Election

I’ll leave this subject to others! However, just like to Wall Street, I think real estate prefers divided government too!

War

In my opinion, I believe the real estate market here locally will continue to stabilize into a more normal market. I also feel we can expect reasonable price appreciation per year. However, if a wide world conflict starts all bets are off!

The Economy

An improvement in the economy will always help real estate, less regulation and lower taxes will help consumer sentiment. When people aren’t confident in their personal financial lives, they tend to put off major decisions like home purchases. It’s well known that real estate sales are a leading indicator of the economy. A robust real estate market will drive sales in other industries. A healthy real estate market will lead to a healthy national economy.

So, no the Charleston Market is not Close to the Edge of Collapsing! We are simply in a transition into a more balanced and normal market. One where the best-looking homes that are priced right will still sell to the motivated buyers in the market. Some areas and price ranges will do better than others. For the best results, its always important to hire an experienced agent to help you market and sell your home.

Disclaimer of Sources – Charts with the black backgrounds in this post were taken from the Keller Williams Realty 2024 Vision Speech and from the 2024 KW Mega Camp Market Update. Data was compilied from numerous sources by the Keller Williams Realty Economic Research Department. Including: Bureau of Economic Analysis, Bureau of Labor Statistics, National Association of Realtors, Robert Shiller, US Census, Freddie Mac and Core Logic. Charts with the white backgrounds in this post were provided by the Charleston Trident Association of Realtors MLS.

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

The Crossroads of Two Markets

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Here we are in August 2022 standing at the crossroads of two markets! After two years of runaway home prices, historical low rates, the great migration and first-time homebuyer demand, things seem to be slowing down a little. Frankly, a move to a more normal market would be a healthy change. Much like a downturn in the stock market that gives stocks some breathe to regain momentum to go higher.

Inflation and it's affect on the crossroads of two markets.

Thanks to inflation and the fed, our market seems to be pivoting in real time as I am writing this post. When inflation started creeping into our market last year many folks were in denial, using words like transitory to calm fears. But as you can see from the chart below inflation has been anything but transitory.

Now, in order to “tame the beast” the Federal Reserve Board has been very agreesive raising rates. This action could prove to slow things down but like most economic data they are a lagging indicators. So we most likely won’t know what’s happened until it’s already happened!

However, eventhough the data is lagging, often we can draw lots on conlusions based on this lagging information. Though as for where we are right now, we still haven’t had enough time yet to completely determine if the market is truely shifting. Or, if we are just simply moving to a more normalized market? Time will tell, and it’s a little too early to make those claims in my opinion.

Crossroads of Two Markets – The Evidence

First let me say, the market is NOT crashing!

Mortgage Rates Rising

The feds rate hikes have reduced home buyers buying power by approximately 25%. For each 1% of and interest rate increase, a home buyers loses 10% of their buying power. So as an example, a buyer that could afford a $400k home in February can now only afford a $300k home. That’s a lot of lost value!

Have interest rates put us at the crossroads of two markets. Check out this historical interest rate chart.

The average sale price has been stabilizing since April. Histoically this is the busiest time of the year when home prices normally are trending up! From the charts above you can see that interest rates started going up in late March and the home prices started stabilizing in April. Could this be the main force that is putting us at the crossroads of two markets.

If we are truely at the crossroads of two markets we will be able to look back at the rising interest rates as the main cause. With that said, if demand from the great migration continues and younger home buyers keep joining the ranks of homeowners, the Charleston market may just be normalizing?

Number of Homes For Sale

In January the Charleston MLS had around 1,000 single family homes on the market. On August 1st the MLS showed that number had doubled.

Number of Homes Under Contract

We are no longer selling more homes than we are listing.

Supply of Homes

What is a Normal Market?

In a normal market, where supply and demand are equal, you typically will see a 3-6 month supply of homes. Since the beginning of the year we have moved from a supply of homes that was less than a month to over 1.5 months of supply. It’s still a sellers market if homes a priced right but it’s not as exteme as it was before interest rates moved higher.

The Crossroads of Two Markets – Conclusion

The market statistics show we may be and the precipice of change. The indicators are there, the only question remains is, will this continue and how far will this go? So, are we actually at the crossroads of two markets? Or, could this be a headfake and next month the fed changes course, the crisis in the Ukraine resolves, inflation and rates go down and the market is off to the races again! Who really knows and thats what keeps this exciting.

Check Out This Video!

What I do know is that the only thing that remains consistent in real estate is that people always need to buy homes. And…people always need to sell homes! People don’t buy or sell because of the market, they buy and sell to fullfill a need. If that’s you, we are here to help!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

The 6 Steps to Buying A Home

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In this post, the 6 Steps to Buying a Home we’ll give you a simple overview of the home buying process. Buying a home can be intimidating while at the same time exciting. For some, just getting over the fear is the first step. What we’ve discovered is that the more educated a home buyer is, the easier buying a home is for them.

Start off on the right foot by beginning your home search here!

Find Your Next Home Here!

Yes, there is a specific process to buying a home? It’s pretty simple actually and when our clients follow these 6 steps to buying a home, they have great results!

The 6 Steps To Buying A Home:

  1. Hire us…as your agent!
  2. Secure financing.
  3. Find your home.
  4. Make an offer.
  5. Perform inspections.
  6. Close the sale!

Pretty simple right! So let’s take a look!

If your renting and have a stable job with some savings, and a credit score in the high 600 range, you can likely qualify for FHA or conventional financing at today’s low rates.

Many of our clients save thousands by using Keller Mortgage!

Start Your Pre-Approval with Keller Mortgage Here

Step 1 Of The 6 Steps To Buying A Home

Hire Us….As Your Agent…

Having someone on your side when comes to buying a home is the most important part of the process. Great agents like us at as fiduciaries and put our clients needs and interests first! And the best part…our services to you are FREE!

How We Help You

  1. Educate you about your market.
  2. We focus on your wants and needs.
  3. Guide you to homes that fit your criteria and meet your needs.
  4. Coordinate the work of other professionals like Home Inspectors, Attorney’s, and others.
  5. We help you negotiate the best possible price and terms.
  6. Check and double check the paperwork and deadlines.
  7. Solve any problems that may arise.

Step 2: Secure Financing

Most people don’t automatically know how much of a mortgage they can qualify for! It’s normal. That’s why we always recommend that you get with one of our preferred lenders as soon as possible. Not only will they help you discover how much you qualify for, but they can also make helpful recommendations. When you are Financing a Home in Charleston you need to know your options. Your lender can suggest a variety of different mortgage programs to fit your unique situation best! And…you may discover a strategy that your weren’t aware of!

Proper mortgage planning is the key to an efficient and smooth experience.

A mortgage loan specialist will tell you what you can afford, but you decide and tell us what your comfortable spending!

The 6 Steps to Financing Your Home

  1. Choose a Lender.
  2. Make a loan application and get pre-approved.
  3. Determine what you want to pay and select a loan option.
  4. Submit to the lender an accepted purchase contract.
  5. Get an appraisal and clear title.
  6. Obtain funding and close!

If it sounds challenging it’s not! That why we are here. We help our clients with every step!

Also…we have worked with the best mortgage professionals in the area and will be happy to introduce. Using a lender that has a relationship with your agent adds another layer of accountability that can be helpful to the process.

Step 3 Of The 6 Steps To Buying A Home

Start Your Home Search Here!

Find Your Home

So…once you’ve completed the pre-approval process you’ll then be ready to begin your search!

At this point the most beneficial thing that we can do, is sit down and have a brief home buyer consultation. During our meeting we will accurately pinpoint what you are looking for in a home and area. Since this is likely the biggest purchase you’ve made, we want to take our time and really focus on what you want and need.

Questions we will discuss:

Where do I want to live?
How much space do I need?
Which is more important: location or size?
Fixer upper, turn key or a new home?
Is future appreciation important?
Is neighborhood stability important?
Would a condo be an option?
What features and amenities do I want or need?
HOA or No HOA?

Hopefully by now you’ve been looking at homes on our web site: byrdpropertygroup.com However, we can never stress the importance of seeing homes in person enough!

When you visit homes for sale in person, not only will you see the homes:

  • you’ll see where they are located
  • how the neighbors take care of their homes
  • what the neighborhood is like
  • what’s nearby and more

You’ll never get the “real feel” for an area until you visit the homes and neighborhoods. There are a few downsides to just viewing homes online. What you’ll discover is that listing agents are very cleaver at not showing you the things that you need to see online! And…photographers are very clever at using creative photography to make the homes and yards look bigger and better online than in person! For a closer look into how we work check out this post How We Help You Buy A Home

Step 4 Of The 6 Steps To Buying A Home

Make Your Offer

Their a 3 basic components to any offer.

  1. Price – What you’re willing to pay based on the market and your financial qualifications.
  2. Terms – Include financial, inspections, condition and timing concerns.
  3. Contingencies – Condition related and financial. Anything that might need to be resolved prior to closing.

How We Help!

Once we’ve helped you find a home that you want to buy…we will analyze the other comparable sales in the area. Then, we will share our analysis with you so we can determine together what the homes current fair value is.

Additionally, we’ll contact the listing agent in an attempt to discover more information about the property. Knowing what’s important to both sides of the negotiations will help us construct a better offer for you.

Also, if need be, we can explore other resources for more information. ie: tax records, the local planning office, public utilities, school data, HOA details and more! Whatever is important for you to know prior to making an offer, we will make every attempt to find the resources for that information for you.

So rest assured…we make sure our clients are comfortable and confident in their choice of home before making an offer.

Step 5 Of The 6 Steps To Buying A Home

Home Inspection

Just because you love a particular property, it’s doesn’t mean that it’s perfect! Chances are it’s not! In fact I’ve never seen a perfect house! This is where reason will have to prevail over emotion.

8 Steps to buying a home - Home Warranty Protections

Our team always recommends that you have a home inspection, that you attend, to learn about your property. This way you’ll see first hand the properties true condition before you close. Check out this post on Choosing A Home Warranty

For your protection, in South Carolina every home seller is required by law to provide you with a Sellers Property Condition Disclosure. On this document the seller is required to disclose any and all know defects in the property.

What your looking for are the major things.

Are there any structural issues, does the heating and cooling work, are there roof leaks, do the plumbing and electrical systems work, is their moisture damage and more. Cosmetic issues should be handled in the offer. Like cleaning and painting etc. The home inspection is for the big ticket items!

In South Carolina our state contract handles inspection contingencies with the “Due Diligence” process.

The Due Diligence process has many details that should be reviewed well before you make your first offer!

Step 6: Getting Ready To Close

Now that all terms have been agreed to by all parties and all contingencies are removed! Your contract is considered ratified! You’re now in the “home” stretch, pun intended.

But you need to be aware that you have a few pre-closing responsibilities, and these include staying in control of your credit and finances, first and foremost.

8 steps to buying a home
  • Don’t buy anything on credit until you close!
  • No new cars, no furniture…nothing!
  • Do not create any new leases! Cars, furniture, appliances…nothing!
  • Other than your normal paycheck all bank deposits will be questioned.
  • Continue paying your bills on time and notify your lender if anything changes!
  • People often accidentally disqualify themselves without even knowing it!
8 Steps to buying a home. Keep your lender in the loop.

You will also need to keep in touch with your agent and lender and return all phone calls and paperwork promptly. Any communication delays could potentially delay your move in date!

You might need to communicate with your agent at least once or twice a week, and verify with your lender that all mortgage funding steps are completed.

If possible, conduct a final walk-through of the home with your agent as well.

And finally, be sure to confirm with your agent, home insurance professional, and lender that you have the certified funds, and evidence of insurance lined up prior to closing.

6 Steps To Buying A Home

Protect This House!

8 Steps to buying a home. Protect this house.
Home Sweet Home!

Once you’ve closed and moved in, you’ll need to protect your investment for years to come. And you can do so by performing routine maintenance on your home’s systems, depending on their age and condition. 

A good rule of thumb is to watch for signs of leaks, damage, and wear. If you fix small problems early, you will save yourself from having to spend big money later. 

And remember that kind real estate professional who assisted you throughout the process? Well, after closing your agent can still help you with such things as providing information for your tax returns, finding contractors and repair services, and even tracking your home’s current market value.

We hope you’ve found this post outlining the 8 steps to buying a home helpful. We have been helping folks since the 1980’s and have had plenty of years to refine our process. What you’ll discover is that it’s simple, it works, it’s not stressful and can be a whole lot of fun!

Find Your Next Home Here!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Search By Area

Click your area of choice below and see every home for sale on the MLS!

Northern Charleston Areas

Peninsula, Neck and Western Areas

Southern Charleston Areas

Oceanfront Beach Island Areas

Let Us Know How We Can Help?

Contact Us at 843-972-7670

Spring Charleston Market Update

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This year the Spring Charleston Market Update is being written at what may turn out as one of the most unique periods in real estate history. We are right in the middle of a whirlwind of economic changes that could change our market significantly!

I’d like to look back at our Fall Market Report. In the Fall Market Report we mentioned 7 Key Indicators to watch that could impact our market. Interestingly enough a few of those indicators have come to life!

Fall Market Key Indicator Recap

Inflation Risk

Well, the risk of inflation certainly came to life in a big way! Everyone is feeling the reality of higher prices everywhere we turn. From the grocery store to the gas pump we are all paying a lot more than we were before. Below is a recent CPI Chart from FRED (Federal Reserve Economic Data) based on the Consumer Price Index pulled from Inflationdata.com

Interest Rate Chart Spring Charleston Market Update

As of the Spring Charleston Real Estate Market Update, the numbers haven’t yet significantly impacted our market. Yes, the prices of homes in Charleston have increased, but these increases haven’t slowed down the demand for homes yet.

Interest Rate Risk

Balancing Home Prices and Interest Rates Spring Charleston Market Update

Similar to inflation, the rise in interest rates has reduced the amount of home a buyer can buy. For every 1% the interest rate goes up a buyer loses roughly 10% in buying power. Thus, a 1% rate increase will knock someone qualified to buy a $500,000 home down to approximately $450,000. That is a sizable reduction in purchase power.

So far, it hasn’t reduced the demand for our unpressedentedly low inventory.

Fed Policy Risk

Fed Monetary Policy Charleston Spring Market Update

The Federal Reserve Bank’s main function is to control monetary policy. The goals of monetary policy are to promote maximum employment, stable prices, and moderate long-term interest rates. To do this they have a few tools at their disposal.

In an over heated inflationary market their goal is to slow things down by tightening the money supply. As we speak, the Fed has been making it’s moves and beginning the process of Quantitative Tightening (QT) to combat what has become 4 decade high inflation. This “QT” is a combination of the Fed reducing it’s balance sheet of securities and raising interest rates.

Again, just like the 2 previous indicators, we haven’t seen the impact yet from these Fed Policy moves. So you’ll want to keep and eye on the Fed moving forward, because they have just started making their changes in the last few months.

Major International Incident or Conflict Risk

I have to admit the Russian Invasion of Ukraine was not on my radar when I wrote the Fall Market Update. This is exactly why I mentioned that an international incident could affect our market. We never know what is going to happen around the world and the significance of these types on incidents can have a huge impact on our real estate market.

Whether it ends up having a significant impact on our real estate market or not, this event has caused turmoil in the stock market and politics. Keep an eye on Ukraine to see if this becomes a bigger global conflict than it already is.

Creative Financing Risk

As rates go up, lenders get creative. As of the Charleston Spring Market Update, we have seen lenders starting to offer ARM’s (Adjustable Rate Mortgage) again. They do this to temporarily bridge the affordability gap for borrowers. This isn’t always a bad thing and for some it can be a great tool. If you are in the market and considering an ARM, do your homework and know what you are signing up for.

Find Out What Your Is Home Worth?

Spring Charleston Market Update Numbers

To put this into perspective the numbers below are taken from the MLS Reports as of March 31, 2022

Listing Inventory Still At Record Lows

From the spring of 2019 to the spring of 2022, we’ve seen the local supply of homes for sale go down from 6,309 as of March 2019 to 1,259 as of March 2022. As I write this on April 21, 2022, the MLS shows 1,162 active homes for sale on the market!

Days On The Market Still Low

As of the end of March, our MLS shows an unbelievable median of 3 days on the market for a home to sell!

Home Prices Still Increasing Into The Spring Market

Home prices in the Charleston Spring Market have been steadily rising during the first quarter of 2022. With the median sales price increasing from $350,000 on January 1, 2022 to $361,194 by the end of March.

View Charleston Homes For Sale!

Spring Charleston Market Update Summary

The market may be changing right before our eyes! With so many different things influencing our economic, political, and financial worlds, where we end up no one knows. What I do know, is housing is a primary need for most people.

Back in the 1980’s when I started in real estate, we sold lots of homes when the rates were very high. This was because people needed a place to live and raise their families. They made it work because they had a need.

Here in Charleston we are still benifiting from the “Great Migration”. People coming here have a need! And when someone wants to move, they have to do what they have to, to get where they want to be!

Spring Charleston Market Update – What To Watch!

Key Indicators to Watch Moving Forward

  • Keep watching interest rates. Rising rates may slow down the current high demand for homes.
  • Rising interest rates will make the existing lower rate assumable mortgages very attractive!
  • Keep watching the Fed. What they do in the next few months may determine the outcome for the next few years.
  • Pay attention to what the the folks in Washington either do or don’t do. It all matters on the big stage.
  • Watch the inventory of homes for sale. If inventories increase, prices could either stall of drop.
  • Watch to see if Hedge Funds start to sell their rental inventories. Hedge Funds have been accumulating properties since 2012 and have built up massive inventories of rental homes. Hedge Funds are opportunistic and typically buy their assets low and sell them high. If our prices start to fall, we could see hedge funds begin to sell off their portfolios! In turn, this could exacerbate a decline in home prices.
  • Watch to see if new construction sales slow. Right now that doesn’t seem possible, but things can change.
  • Watch Ukraine. The outcome here is very important to the global supply chain – specifically, food and minerals.
  • Watch China and Taiwan for the impacts of potential conflict.

In The Path Of An Unpredictable Storm

Throw out the data from the first quarter and forget about last year! Storm force winds are coming ashore. Will the storm veer off back into the ocean or will we take it head on? We’ve got a lot to pay attention to!

I hope you’ve enjoyed my Spring Charleston Market Update. Every time I prepare a Market Update, I discover a few things I didn’t expect to learn.

Thanks for taking the time to read this, if you’ve gotten this far, I am flattered and humbled. Cheers!

Search By Area

Click your area of choice below and see every home for sale on the MLS!

Northern Charleston Areas

Peninsula, Neck and Western Areas

Southern Charleston Areas

Oceanfront Beach Island Areas

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Contact Us at 843-972-7670

Fall Charleston Market Update

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Fall 2021 Charleston Real Estate Market Update

Fall Charleston Market Update

In this edition of our 2021 Fall Charleston Market Update, we will be looking at national and local historical data. This will help us understand as to what we can expect from the current trends. Which consequentially will help us to make better choices in the future.

What You’ll Discover in This Fall Charleston Market Update

  • We are on pace for this to the 5th best year on record at a national level.
  • Home Prices are back up to the old trend line!
  • Waiting for more homes to hit the market may not be the best strategy!
  • Mortgage Rates – Still very, very low…for now!
  • Unemployment & Consumer Confidence – The good, bad and the ugly!
  • Inflation – The Dragon that needs to be slain.
  • The gap between wages and home prices has never been wider!
  • Will Mortgage Forbearance impact our market?
  • How is the Remote Worker affecting the market?
  • Why “this time, is not like last time”!

Data Sources & Charts Used in The Fall Charleston Market Update

Most of the data, charts and graphs that follow are from Gary Keller’s recent 2021 Market Update presented at the Keller Williams Realty International Convention in August.

One of the brightest minds in real estate today, Gary Keller is known for his accurate market forecasts and vast knowledge of how current economic activity affects the real estate market.

Fall Charleston Market Update – Sales and Prices

National Home Sales

National Annual Home Sales Fall Charleston Market Update

Let’s jump right into our Fall Charleston Market Update and look at National Home Sales.

First, notice that we are on pace for the 5th best year for real estate sales ever! Who would have expected this at the beginning of the pandemic!

Moving forward, most experts agree that we will not be falling off a cliff as we did in 2006. Many believe we will have a flattening of the market. This be caused by more homes coming on the market and demand slowing somewhat.

Local Sales

Local Annual Sales in the Charleston Market Fall 2021

Looking at Local Sales, you can see in our Fall Charleston Market Update, home sales have been a little more aggressive to the upside in our area than the national numbers. In my opinion, this is due to the recent migration of folks leaving the colder climates and dense cities.

Seasonally, we typically see a slowdown in the fall through to Christmas. However, right now the demand for homes is still high and inventory still selling fast. Which may keep the market from slowing down this year. However, when I talk with other folks in our local industry, some say they are feeling things slow down somewhat. Which is something we will have to keep an eye on this as we move forward.

One of the Most Important Charts

National Annual Price Increase

The yellow line represents the Long-Term Average of Home Price Appreciation. As you can see, we are now back above that trend line. After the housing crash, Gary Keller explained to us that many felt that this trend line was reset down 16%. Consequently, when we look at the homes prices on the chart for 2021, we see that prices are now back above this trend line. So what does this mean?

To this point we had 7 years above the trend line during the housing bubble from 01-08. What this means is, we could very well see prices remain above this trend line for a few years. It’s something to watch.

Local Home Prices

Charleston Market Home Prices 2021

The above chart shows the increase of local home prices. Be aware that this chart is somewhat condensed from left to right. Which makes the upward sloop look a little more extreme! However, it also reflects the greater demand for homes in our area than other parts of the country.

“If you are unaware of what’s happening right now in our local real estate market, let’s talk about the kind of wealth you’ve built in your home. This is a unique time in our real estate history.” G. Keller

Time Heals All!

“I’m just going to wait for the market to come down.”

At this point, every homeowner in Charleston should not be underwater! Even if you bought a home at the highest point of the previous housing bubble in 2006! The lesson here is that you can buy a home at the worst time possible and eventually be ok!

Since most people live in their homes for 7-10 years before they move again, time will correct any timing issues. Also, with the low interest rates making the cost of owning lower there is an offset there too.

It’s Always a Great Time To Buy A Home!

So, if you are planning on living in the home you purchase for a long time, and you have other good reasons for wanting to own a home, then go ahead and buy one! Staying in a home for a long time with these low rates, is a great combination. Focusing on the short term may keep you from experiencing all the benefits of owning a home today! Plus, prices may keep climbing and interest rates will eventually rise!

Fall Charleston Market Update – Housing Supply

National Home Supply

Supply Of Homes Fall Charleston Market Update

The lack of inventory on the market should not be a surprise to most people at this point. Again, based on the number of actual sales, it has not a shortage of homes, it’s been a massive increase in demand.

Local Home Supply

Charleston Market Local Months Supply 2021

Historically we have never seen homes selling so fast in our market!

New Listings Fall Charleston Market Update

This chart is a little different. This shows the seasonality of new listings coming on the market. Each line represents a different year, except the blue line which represents 5 years combined.

You’ll notice these lines are very similar except during the spring of 2020. This was when the country was locked down. So again, this chart confirms that the massive increase in demand. We don’t have a housing shortage; homes are simply selling very fast!

Seasonality Of When New Listings Locally Come On The Market

Seasonal Cycle of Local New Listings in the Charleston Market

Here our local chart shows the seasonality of when homes come on the market each year. This chart doesn’t actually show the months on it but it’s the same every year. New lisitngs start coming on the market in January to July and fewer homes are listed between July and December.

Most of the population believes that the best time to sell or buy a home is in the spring. For a variety of reasons, for many people it is. However, for many other reasons, selling or buying a home in the fall and winter, might be just as good? If not a better time!

Fall Charleston Market Update – The Economy

Mortgage Rates

This chart says it all! Rates have never been lower…EVER! Nothing more to say. Interest rates have been trending down from 16 – 18% since 1981.

Rates have never been lower…EVER!

Our Gross Domestic Product Output

The data above comes frome the US Bureau of Economic Analysis.

The Gross Domestic Product is the value of all goods and services produced in a country during a specific period. So, without getting to technical, any number above 2% is good! In 2021 we are now at 6.5% which is a little too good!

When we look back in 2020, the Pandemic and the lock downs threw us off the cliff. However, now we are back! Currently this is a goods driven economy at this point because the service sector is still lagging. 6.5% may seem great…but inflation has been starting to show up for a couple months now. Inflation and it’s affects on what we pay for goods and services directly impacts our quality of life.

Consumer Confidence – Has Never Been This Low

Consumer Confidence Fall Charleston Market Update

So, with the economy roaring why is consumer confidence so low? And…it has never been this low! Unlike interest rates, this is not a good thing. This has been caused by the uncertainty. When people wake up each day and they are not able to predict what the world will bring, it’s uncomfortable!

So how does this impact real estate. My thoughts are that it impacts it in a big way. I believe that this is one of the driving factors for the migration we are seeing across the country. People are simply looking for a better life and making a change in where they live is the first step.

Unemployment In Check!

Annual National Unemployment Fall Charleston Market Update

Another surprise area in this Fall Charleston Market Update is unemployment. After being hit hard at the beginning of the pandemic, unemployment is now projected to be at 4.8% by the end of the year. Which is a great number! The government typically like to see unemployment under 6%

Unemployment Comparison Fall Charleston Market Update

Now let’s look at the unemployment rates during the Great Recession and the current Pandemic. Here you see the speed in which the economy and employment has come back.

During the Great Recession to took us a lot longer to get us back to anywhere near 6% unemployment. And during Covid, it has only taken us 2 years to get back to under 6%. What this means is that the underlying economy going into the pandemic at the end of 2019 was extremely strong.

According to Gary Keller, this has been a health crisis that has turned into and economic crisis. The Great Recession was a pure economic crisis that took longer to unwind.

National Unemployment and Job Openings Fall Charleston Market Update

This is a very interesting chart. The yellow line shows the unemployment rate as of June. The blue bars show the number of available jobs near all-time highs. This surprised me very much! Many experts believe that this dynamic will cause wage inflation in the US. This means that income will increase in America and so will inflation!

The Dragon That Needs to Be Slain

Inflation Fall Charleston Market Update

The Federal Reserve Board has for a very long time used 2% as their target rate of inflation. As this chart shows, the inflation rate is heading into territory we haven’t seen since the early 1990’s.

Everyone is feeling it. In my opinion, this has been caused by the shortages that have precipitated from the lock downs and shutdowns of our factories, mills and other businesses. In additiona, our supply chain has been handcuffed by workers that have had to stay home.

What Can Be Done?

The one tool in the governments toolbox to cool inflation is to regulate “the cost of money”! Yes, that means raising interest rates.

Fall Charleston Market Update – New Homes

New Homes Nationally

New Construction Fall Charleston Market Update

The historical average for single family home starts per year is 1 million. We are finally back up to that benchmark as builders work to keep up with demand. What’s remarkable about this, especially this year is that builders have been wrestling with a variety of headwinds.

Builders have been slowed down by local regulations, the slow approval and permitting processes and anti-growth sentiment in some areas. Additionally they have faced supply shortages, labor shortages and the rising costs of materials like lumber have all had an impact on housing.

And…the big one! Not enough developed lots to build on. Which I believe was the initial catalyst that drove prices up early in the Housing Crisis in the early 2000’s. It’s something to watch moving forward!

New Homes Locally

Local New Const Fall Charleston Market Update

Local housing starts seems to mirror the national numbers. Locally builders have been selling everything they build and raising prices. This has been to offset the rising costs of construction materials and labor. However, this hasn’t discouraged home buyers, they keep on buying!

Affordability – The scary number!

Affordability Fall Charleston Market Update

For years I have used this chart to tell the story of the Housing Crisis Bubble of the Great Recession. The Blue Line shows the Median Household Income in the US, and the Gold Line shows the Median Home Price.

The Gap Between Median Household Income and Median Home Prices Has Never Been Wider!

Up until 2001, these lines ran pretty much in “lock step” with one another. Then the run up began, and the divergence became greater and greater. Home prices became a lot higher than the Medium Income only to come back down during after the Great Recession.

Since the market bottom in 2010, we’ve been off to the races again! Now, we are seeing the greatest disparity between Household Income and the Price of a Home in recorded history.

This divergence is what forced lenders to get very creative with financing during the housing crisis. They had to find a way to bridge this affordability gap for home buyers, and unfortunately they did.

Now we are in a similar situation with the gap between income and prices having never been wider. For now, the rules put in place after the housing crisis have been very effective. The credit quality of borrowers has been kept strong and we have a higher savings rate. These are a couple of the reasons that should keep us from having another housing crisis.

Fall Charleston Market Update – A Prediction

So, what’s going on? What Gary Keller believes, is that incomes in the US have lagged and that low interest rates have bridged this affordability gap. Moving forward with an abundance of jobs available and the potential for wage expansion, higher wages could bring these lines closer together as well!

Mortgage Forbearance – Nothing Like During The Housing Crisis!

Mortgage Forebearance Fall Charleston Market Update

The bottonline here is that Mortgage Forbearances will not negatively effect housing. And there are many reasons. The biggest reason is below:

  • These homes are not underwater. Prices have risen and people have equity in their homes.
  • This gives folks options they didn’t have during the housing crisis.

An additional fear many have had is that as people exit Forbearance, it will flood the market with inventory. This simply won’t be the case, there are just not that many homes in forbearance now. The impact will be minimal.

Is Remote Work Really Driving Our Market?

Remote Work Fall Charleston Market Update

As we are working through the pandemic, we are actually seeing many folks go back to work. As we have discovered over the last few months many jobs are well suited for remote work. Yes, some people have more flexibility now and they are definitely taking advantage of this new feedom to live were they want!

Carly Tripp – “This is Not a Housing Bubble”

Nuveen Real Estate Global CIO and Head of Investments – Sept. 1, 2021

In the video from CNBA Carly outlines several reasons why she believes this is not a housing bubble! All of which makes perfect sense to me!

  • Low Rates!
  • Low Inventory!
  • Construction Delays!
  • Mortgage Debt is less than 50% of GDP vs 70% in 2007!
  • Heavy Migration to the Sun Belt States!
  • Young Homebuyers coming into the market!
  • Home Supply will not catch up to demand for a long time!

Conclusion – Fall Charleston Market Update

Yes, I know this is a lot of information! So, let’s look at what we just went over, and the key points discussed.

  • We are not having a housing shortage; we are having a housing boom!
  • If Home Prices are back on the historical trend line, maybe things aren’t that out of whack?
  • The inventory issue may not be solved anytime soon if the pace of demand continues.
  • Low Mortgage Rates – Are helping bridge the affordability gap.
  • Low Unemployment and the large number of available jobs could cause wages to rise. This would certainly help fill the gap between incomes and home prices.
  • We need to pay attention to inflation.
  • Mortgage Forbearance will have minimal impact on our market.
  • Migration and Remote Work have been fueling demand in the Charleston Market.
  • This time is not like last time”!

Based on my research, I believe we are not in a bubble. However, that doesn’t mean we don’t want to keep a watchful eye on a few key indicators.

Fall Charleston Market Update – Key Indicators to Watch

  1. Watch inflation, it may trigger the Fed to act to cool down the economy.
  2. If the Fed does act, pay close attention to what they do to slow the economy down and tame inflation.
  3. Watch interest rates. Raising rates is the Fed’s tool to control the money supply.
  4. Watch for more major international incidents or conflicts. These types of events will affect our already low consumer confidence.
  5. Watch for increased local regulations on housing construction and development. Attempts to slow down building and development with further limit the amount of supply of homes. This will cause prices to continue to move higher.
  6. Watch for banks to offer more creative financing. If wages don’t increase and rates rise, banks may develop risker financing options to bridge the gap between income prices. Which was a major catalyst for the housing crisis.
  7. Watch what our government does with Covid-19 protocol moving forward. Certain decisions could trigger more downward pressure on consumer confidence.

Standing At the Crossroads

We find ourselves in a challenging time! I would say we are near a crossroad in our economy. From inflation and strong demand to Covid-19, employment, wages and more, we’ve go a lot to pay attention to!

I hope you’ve enjoyed my Fall Charleston Market Update. Every time I prepare a Market Update, I discover a few things I didn’t expect to learn.

Thanks for taking the time to read this, if you’ve gotten this far, I am flattered and humbled. Cheers!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Contact Us at 843-972-7670

June Charleston Market Update

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So, the data is in on last month’s real estate market here in June Charleston Market Update! There have been some small changes, so let’s go over a couple key take always from last month’s MLS results.

May MLS Activity

The first thing that jumps off the page in the June Charleston Market Update, is that in the price range under $600k. In this price range the market is contracting somewhat. Meaning more homes are selling than coming on the market. However above $600k, it’s the opposite. Even though this is not yet a significant trend or a number large enough to have a big impact but it is worth watching.

Market Statistics for the June Charleston Market Update

Second…is our List Price to Sale Price Ratio. Which is now for the entire MLS is now over 100%. Simply amazing! And the Medium Days On The Market in the June Charleston Market Update is still at 3 days!

Incredible.

June Charleston Market Update Conclusion

Right now, when you look at the numbers in the June Charleston Market Update, our market does not seem to be showing any signs of slowing down. If you’re a buyer in this market you understand this first hand. Many buyers are making offers and the successful ones are going for it and making it happen!

You just have to have some perserverance and you have to go after it agressively!

Reason to buy in this market.

Here are a few key points to think about when buying a home in this market!

June Charleston Real Estate Update, chart showing 20% appreciation year over year.
  1. Interest rates are still historically low, however inflation is here and prices on goods and services are rising and inflation will cause rates to rise! Anyone that goes to the gas pump, the lumber store or the grocery store can see it!
  2. Keep in mind, when you look at the comps for a property you are looking into the past. In a rising market every home is going to look overpriced!
  3. Every sale when it closes becomes the next comp. So whatever price you pay, your sale becomes the new benchmark for the neighborhood!
  4. Your lender requires and appraisal. The appraisal is designed to protect the lender form giving someone a loan that has overpaid! The bank does not want to “over lend” you money, just in case they have to take it back from you! Which in turn protects you from overpaying.
  5. Year over year homes have gone up in Charleston 20.8% according to the MLS. On a $400,000 house that’s $83,200.!
  6. So if this continues, which it could, that $400k house from last year, next year may cost close to $600k! And interest rates will be higher! So waiting to pull the trigger could end up hitting you hard twice!
  7. If the market does go down, keep in mind in real estate time heals any buying mistake as long as you have a normal loan. Using the 2009 housing crisis as an example, we are currently well above the highs of that market!
  8. If your focus is long term and you want to eventually turn the home into a rental…it’s much easier to cash flow a home with a low mortgage payment than a home you have to buy at a higher interest rate and monthly payment!
  9. Higher prices mean a bigger down payment requirements and higher interest rates mean less buying power and more money going out for housing expense each month!

Find Your Next Home Here!

Benefits of Owning a Home

  1. It’s forced savings.
  2. You get a tax benefit in your interest deduction or your mortgage. Which could mean a tax refund at the end of the year as opposed to writing a check to Uncle Sam.
  3. Properties appreciate, you will be growing your net worth and wealth over time.
  4. Every month you’re paying down your mortgage.
  5. You have pride in the fact that you own a home. It’s yours to improve unlike in a rental.
  6. As a homeowner now you are a vested part of the community.
  7. When you rent you are throwing your money away and paying the landlords mortgage off.
  8. No more pet deposits and pet fees?
  9. Low rates mean more purchasing power.
  10. Buying in a low interest rate environment means that you are paying historically more towards paying down your principal loan amount each month than in any other time in history.
  11. Should you choose to, you could turn the home into a rental property, further growing your wealth.

June Charleston Market Update Forcasting

Prices seem high right now if you’re in the market but look at any major city in the US that has seen the kind of demand we are now seeing! Southern California in the 60’s and 70’s, Austin Tx, South Florida, Northern Virginia and more!

Well, being that I am typically fairly conservative I’m not willing to make any predictions, but maybe, just maybe, this could be Charleston’s time!

Stay tuned we will keep watching it!

Waterfront Lot For Sale – Bulls Bay Overlook

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SOLD! Closed 9-14-21

Lot 8 in Bulls Bay Overlook is one of the last remaining waterfront lots for sale in the neighborhood. Just north of Mt. Pleasant, tucked away off of Doar Rd in Awendaw, you won’t find a better retreat in Charleston County!

Lot 8 Bulls Bay Overlook, Waterfront Lot For Sale on the Intracoastal Waterway
Waterfront Lot For Sale in Bulls Bay Overlook

Come see this beautiful 1.3 ac home site on the intracostal waterway. This waterfront lot for sale is located in the heart of the Cape Romain National Wildlife Refuge in Bulls Bay Overlook. Right on the Intracoastal waterway, this lot is a nature lovers dream. Only minutes by boat to numerous barrier islands and secluded sandy beaches. Here you’ll be able to reach Bulls Bay and the Atlantic Ocean in no time. When living here in Bulls Bay Overlook, everyday can be it’s own unique adventure.

If you’re looking for a waterfront lot for sale to build your next home on, put this one on your short list. Community amenities include; a gated enterance, a boat launch, a community dock and a covered picnic area complete with fish cleaning station. Bulls Bay Overlook is the perfect location for any boating enthusiast or wildlife observer.

Other Attractions Near Bulls Bay Overlook!

As you explore the area you’ll discover the Awendaw Town Hall, and the currently under construction 300 ac Awendaw Park. Additionally, the area has many other wildlife and nature based attractions nearby. From The Center for Birds of Prey, to The Palmetto Trail, The Shell Ring Boardwalk, Awendaw Passage and more! Here you can find plenty of outdoor activities. A must do would be to take the Bulls Island Ferry to Boneyard Beach. At Boneyard Beach on Bulls Island you’ll find some great photo opportunities as well as a great experience.

The Waterfront Lot For Sale You’re Looking For!

Close to Mt Pleasant and only a short 20 minute drive from I526, you’ll be glad you made the trip. Just make sure you save room for a warm ham or sausage biscut made fresh daily at the Sewee Outpost!

Other Suggested Reading

What’s Included In An Offer To Purchase Land

Buying Land To Build Your Own Home

Building Your Own Home – Planing For Success

Bulls Bay Overlook Neighborhood Sign Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Lot 8 Bulls Bay Overlook Ariel Photo Showing Bulls Bay and the Atlantic Ocean
Lot 8 Looking North - Waterfront Lot For Sale
View From The Front Of Lot 8 - Waterfront Lot For Sale
Lot 8 Dimensions
Street View Lot 8 Bulls Bay Overlook
Island Hopping Deer in The Intracoastal Waterway
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Bulls Bay Overlook Waterfront Lot For Sale
Looking West Bulls Bay Overlook
Waterfront Lot For Sale Bulls Bay Overlook
Entrance to Bulss Bay Overlook
Bulls Bay Overlook Waterfront Lot For Sale
Concept Drawing of Awendaw Park
Alligator in Awendaw
Waterfront Lot For Sale
Waterfront Lot For Sale
Waterfront Lot For Sale in Bulls Bay Overlook
Bulls Bay Overlook Waterfront Lot For Sale
Waterfront Lot For Sale On The Intracoastal Watewrway In Awendaw SC.

The Author….Bill Byrd has been helping clients buy land and build homes since 1986. Having personally built several homes in his career, Bill’s clients gain valuable insight when buying land to build on and selecting the right builder. Working with a true expert will save you time and money, while being confident in your decisions! To reach Bill direct call: 843-972-7670 or feel free to send him a question below!

How Can We Help You?

Contact Us at 843-972-7670

Charleston Real Estate Market Update

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March 2021

Are we in a housing bubble, Charleston Real Estate Market Update
Are We In Another Bubble?

Everyone we encounter these days is asking us about the Charleston Real Estate Market. The simple answer is, it’s “Great”! Pretty shallow I know…but the big question is, are we in another bubble? So, our goal here in our Charleston Real Estate Market Update is to help you answer that question. And hopefully, you’ll find the information helpful and will allow you to make better real estate decisions for you and your family.

When we dove into the dynamics of both the national and local economy, as well as the real estate statistics, we discovered some interesting facts and unique trends! Never has any real estate market in recorded history been like what we are experiencing today here in the Charleston area.

The Charleston Real Estate Market Update

Since the market bottom in 2010 the Charleston Real Estate Market has been steadily rising. We have seen increases in the number of sales and listings each year as well as increases in the average price of homes in the area. As of February 2021, the average sales price in the Charleston Real Estate Market has risen to $445,402.00 This is partly due to the unusually high number of luxury homes that have been selling recently.

Average Sale Price Chart from the MLS Charleston Real Estate Market Update
The Average Sales Price In Charleston

What’s driving this as you can see below, is that the higher wage earners have been less affected by the current unemployment trends. As well as the low interest rates and migration trends that we will discuss below.

Unemployment and Income by Sector

This chart below shows the historical annual home prices going back to 1989 in the US.

Historical National Annual Home Prices
US Home Prices Since 1989

Want to know how much your home has gone up in value? We will be happy to provide you with a complete, full blown market analysis of your home and it’s value. Not a computer generated “guess-timate”!

What Impacts The Charleston Real Estate Market Today?

Migration

One of the contributing factors of our growth has been the migration habits of the population in the US. According to many sources, South Carolina has been one of the top 5 destinations for relocating folks for many years.

Projected Population Growth By Region

According a recent study by North American Moving Services, (North American Van Lines) the top 3 states people are leaving are: New York, California and Illinois. And the top 3 states they are moving to are: Idaho, Arizona and South Carolina.

Top Inbound and Outbound States in the US.
Map of Population Migration in the US

Unprecedented Activity In Charleston Real Estate Market?

Currently we’re seeing record high prices and record low inventories of homes for sale in the Charleston Real Estate Market. When you look at the data, it’s not that people are not putting their homes on the market, homes are simply selling very fast!

Which brings us to a common concern most people have. People are often hesitant to put their home on the market because they are afraid it will sell fast! Not typically a problem, but in this market, finding the next home is the challenge! When homes are selling so fast, it makes the timing of finding and closing on your next home a little more difficult. However, we do have some ideas and solutions you should consider if you have to sell your home before you can buy your next home?

Low interest rates are helping to fuel the demad causing prices to increase.

Low Interest Rates And Home Prices

The low interest rates are also instrumental in keeping housing in one of the more affordable ranges in history. Right now, households are surprisingly only spending 16% of their disposable income on their housing expenses due to the lower rates!

Housing Affordability
Low Rates Are Keeping Homes Affordable

A Look Inside The Numbers

If you look at the chart below, you can see that the number of new listings has come up from a low in December of 1,464 to just under 2,000 in February. Also, if you look at the year over year number between February of 2020 and February 2021, there is only a difference of new listings coming on the market is 174 homes!

Chart showing the number of new listings in the MLS Charleston Real Estate Market Update
Number of New Listings in the Charleston Real Estate Market

And on this chart, you can see that due to high demand, homes in the Charleston Real Estate Market are selling well under the mediam historical days on the market is down to 8 days!

Median Days On The Market of Single Family Homes in the Charleston MLS

In this real estate market update, what is happening, is that homes are hitting the market and due to extreme demand, they are selling fast. The speed of the sale is actually what is causing our inventory number to be at record lows. So if you are considering selling your home or rental property it doesn’t get much better than this!

Talk to us about our Multiple Offer Marketing Strategy, it’s the best way to play this market and maximize your gains! Discover how we can create an auction like environment for your home!

The chart below shows the number of Pending Sales in the Charleston Real Estate Market.

Chart of Pending Sales from the MLS Charleston Real Estate Market Update
Pending Sales in the Charleston Real Estate Market

The chart below shows the number of homes in the Charleston Real Estate Market at the end of February is 1,670. Better hurry before they are all gone! (just kidding!)

Chart showing the number of homes currently for sale Charleston Real Estate Market Update

Headwinds That Could Impact The Charleston Real Estate Market

As we move forward into 2021 the overall sentiment for our market is that we should have another strong year. With that said there are a few indicators that are worth watching. Even though inflation is still under 2% as of 2-28-21, there are some indicators that signal more inflationary pressures may be ahead.

Bond Yields

Recently Bond Yields have been rising, which typically move in the same direction as mortgage interest rates. The key indicator here is the 10 Year Treasury Bill. A rise in mortgage rates could affect the Charleston Real Estate Market by actually curbing the current buying frenzy. This would actually be good for the overall market! Slowing the pace of sales would ease some of the supply constraints we currently have. This would enable home buyers to buy homes without having to voraciously compete against each other!

Bond Yeilds Chart The Charleston Real Estate Market Update
Monthly Chart of Bond Yeilds
Rates and T-Bills
Chart Showing the Historical Correlation Between Interest Rates and Treasury Bills

A Stock Market Reversal

I am certainly not predicting this one, but it is something to keep an eye on. The stock market has been experiencing one of the longest bull runs in history and the experts agree that markets are cyclical. Some Wall Street experts are beginning to fear the “TINA” advantage may be ending. (There Is No Alternative)

So a downturn will eventually come. When? Your guess is as good as mine, but it is something to pay attention to as investor sentiment to have some impact on the Charleston Real Estate Market.

11 Year “Bull Market” Chart of The S&P 500

If investors in the stock market get spooked and begin to take profits it could have a psychological effect on investor sentiment. “The Wealth Effect” Which could lead to a more conservative mindset in the market and slow down real estate sales.

Hedge Funds and REIT’s in Real Estate

Right now, hedge funds are still buying real estate. The problem is they are winning bids with all cash contracts and beating out first time and move up buyers for homes in our local market. This has caused prices to go up. However, it’s something to pay attention to, when they start to sell and take their profits, it could signal a turn in the market. We will keep watch on this in future market updates.

For example, in our market, the California based real estate investment trust American Homes For Rent owns approximately 600 homes in the tri-county area. These are properties they have accumulated since the 2012.

Lumber Prices

Currently lumber prices are approximately 300% higher than they were a few years ago. Hopefully as the economy begins to reopen lumber prices will move back into a more normal range.

Chart of Lumber Prices
Chart of Lumber Prices

The Charleston Real Estate Market Update – Outlook

Could March be a turning point in our market, or will it continue to be business as usual? Well, in my opinion, I believe the future of the Charleston Real Estate Market looks pretty good. Who knows what the future may hold but I can tell that I’m confident in the future of Charleston Real Estate. Sure, at some point it’s going to change, but for now unless things change it looks pretty good!

So, what’s making me so confident? Charleston is!

Contributing Factors To A Positive Outlook

As the economy rebounds,we have fewer unemployed in Charleston. In fact, when the leisure and hospitality industries return, we should be pretty close to pre-covid employment numbers in the low country.

Here is a look at income and employment by sectors below.

Unemployment and Income by Sector
Lesure And Hospitality Has Been Hit The Hardest

The Reopening Begins!

Also, as of 2-27-21 the Governor of SC loosened the rules concerning hours for resturants and public gather restrictions. This should give a boost to the unemployed service sector that has been hit the hardest here in the low country.

Covid Case Going Down!

Yes, Covid cases are going down dramatically! And we now have a vaccine! Obviously, it’s not time to let our guards completely down but we are certainly moving in a positive direction.

Chart Provided By The New York Times

Unfortunately, Covid-19 is most likely something we will have to live with for the rest of our lives. As we do with many other previous pandemics.

Previous Pandemics
Chart Of Death Tolls From Previous Pandemics

The Ports Are Rocking!

The Charleston Port ship container volume is back up to pre-covid levels. A new Wal Mart distribution center in the area is evidence that large businesses are looking at Charleston as a strategic destination for their businesses.

Market Update Charleston Por Container Volume Chart

The Charleston Real Estate Market Update – Conclusion

We have a lot to be thankful for! Charleston is coming back and coming back strong. We have fewer unemployed. People have more disposable income and higher savings rates than before; interest rates are low and government stimulus is on the way!

We may have some housing supply constraints ahead. But, at the time of writing this Charleston Real Estate Market Update the trends point to another strong year ahead!

Are we in a bubble? I don’t think so, but time will tell. Just keep following the economic numbers and keep an eye out for our Charleston Real Estate Market Updates!

If you’d like more information on the current market or would like to discuss how we can help you, please feel free to reach out to Bill Byrd 843-972-7670 and Waverly Byrd 843-790-2675

Please Feel Free To Share!

If you know anyone that you believe would enjoy or benefit from this content, we would be incredibily flattered and grateful if you shared this article!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Contact Us at 843-972-7670

How Do I Buy A Home If I Have to Sell Mine First?

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Confused Expert. Charleston Real Estate Defies The Experts!

Many people ask us year after year, How Do I Buy A Home If I Have to Sell Mine First? It’s one of the most important questions many home sellers ask. Having to sell an existing home to qualify for a mortgage on a new home poses some unique challenges. However, the answer can be vastly different depending on the market of the moment. In a buyer’s market the process is going to be very different than it is in a seller’s market.

Check out 8 Steps To Buying A Home . When you completely understand the best practices for buying a home in todays market everything gets a little easier!

Buyers Market or a Sellers Market?

In a buyer’s market the question, How Do I Buy A Home If I Have To Sell Mine First is usually not a problem. This is because when there are plenty of homes for sale, buyers have more options. The issue is a little more problematic in a sellers market. In a seller’s market the challenge is that with low inventory and high demand, the best homes sell very fast! So the timing of both sales and moving can be tricky. If your new loan requires you to have your home sold before you close on your new one, you only have a couple options. Which makes it important to have a Plan A, B and C!

Planning is the most important step when Buying Land To Build on.

Plan A – How Do I Buy A Home If I Have to Sell Mine First?

In Plan A, you’ll sell your existing home while you search for and buy your next home simultaneously. Hopefully timing it so you can close on both at the same time!

How To Sell Your Home And Get Multiple Offers!

The key to this strategy is that you start looking at homes with your agent well before you list your home for sale. This helps you know your options, discover what’s available and get a good feel for the market. Narrowing down your options in advance will help speed your decision process up for when your home finally does sell. Because once it sells you’ll have to move fast to meet your closing deadline. Which can be tricky! Once your home sells and you’ve found your next home, your agent will coordinate both sales so they close simultaneously. And…you only move once!

Pro’s…

If you are able to pull this off it’s a win, win, the best of both worlds! You’ll make one move, and it will be a less stressful than moving twice. This is everyone’s first choice!

Sometimes Buying on a tight time frame can cause unnecessary stress. How Do I Buy A Home If I Have to Sell Mine First

Con’s…

In a competitive seller’s market this may be difficult. There is a good chance that your home will sell fast, and that’s a good thing! But now, you’ll be on the clock to find a new home. In this scenario your choices will be limited to the available inventory of homes currently on the market. You’ll also have to compete against other motivated buyers for same homes in a low inventory market. Just a little stress!

Consequently, if you can’t find the right home fast enough you might have to go to Plan B! Plan A can be tough to pull off due to having a limited amount to time and the level competition for homes in the market at the time. Which in turn will put a lot of pressure on you to find and contract on a great replacement home. You also may not negotiate the best deal for the same reasons. Ultimately you may not be 100% satisfied by your choice because you had to do it under so much pressure!

Plan A.1 – The Bridge Loan

For those with a sunstantial amount of equity in there home, they may qualify for the opportunity to use a bridge loan. A bridge loan is a loan that uses your home equity as collateral. Similar to a HELOC, (home equity line of credit) but different.

A bridge loan is designed to be a short term bridge allowing you the opportunity to buy your next home and then sell your home. The downside is that you’ll have two payments for a short period of time. The upside is that you can sell your home and not worry about having to find a suitable replacement home.

Tip: Not every bank offers a bridge loan opportunity! If this is something you want to look into, give us a call and we will be happy to share with you our trusted vendors. 843-790-7000

Plan B – How Do I Buy A Home If I Have to Sell Mine First?

Plan B revolves around selling your home and then moving into a temporary rental. This option allows you to take your time searching with your agent for your next home. Having helped many of our past clients sell their home and buy their next one in this way, this is, in our opinion the best strategy.

Pro’s…

Plan B is probably the least desirable of all of the options for most people. However, Plan B will allow you to be more aggressive and competitive when buying in a seller’s market! Being a non-contingent buyer on the buy side will give you a great advantage. This strategy will give you the best opportunity to make a great deal on a great house with the least amount of stress! Your chances of winning the bid will be much greater if you don’t have to sell your home first. Unfortunately, it often takes having to experience losing one of two homes first before most folks realize that this is the strategy they need to take.

Mini Vacation!

Living in a short term temporary apartment can be like a vacation.

Consequently, having to wait a couple months for your dream home to hit the market may not actually be that bad! Depending on the time of year you may find an off-season rental at the beach! You may find a comfortable apartment with lots of amenities like, swimming pools, an on site gym, game rooms and more! You might find a great short-term rental in the Historic District in Downtown Charleston! Who knows, if you treat it like a vacation it might be fun!

Con’s…

You will have to move twice. You will have to put most of your stuff in a temperature-controlled storage unit. And, you’ll be living like a gypsy!

Plan C – How Do I Buy A Home If I Have to Sell Mine First?

Our Plan C solution for, buying a home when have to sell yours first, involves a home sale contingency. A home sale contingency is not always the best solution for a number of reasons. But lets first look at what it can potentially do for you.

What can a home sale contingency do for me?

A home sale contingency will allow you to put a home under contract and allow you time to sell your home. Then once your home goes under contract, you remove your contingency on your new purchase and then proceed to close on both properties.

Real Estate “Layaway”!

A home sale contingency is real estates version of “layaway”. However, in many situations your goals and the sellers goals are very different. Most sellers want their home sold and are not interested in waiting for a buyer to sell their home. In this case you may ask for a Contingency with a First Right of Refusal. Having the First Right of Refusal will allow the seller to keep their home on the market while you try to sell your home for a specific time frame.

Once the seller gets another acceptable contract, they have to notify you that they have received an acceptable offer. Then based on the terms of your agreement you’ll have a certain amount of time to show evidence that you can remove the contingency and proceed to close. If you can’t provide the required evidence to remove the contingency you lose your First Right and the seller can move forward with the other contract and sell the home to the new ready, willing and able buyer.

Evidence required to remove a home sale contingency.

Typically a home sale contingency with a First Right of Refusal will require evidence that shows you can close on the property. This may be a fully ratified contract on your home with all contingencies removed. And, evidence that the buyer of your home is well qualified to purchase it. Or it could be evidence that you have sufficient cash in the bank to close the sale without a loan!

Experience Counts!

Home sale contingencies have lots of moving parts and are best negotiated by an experienced agent. Over the years we have negotiated lots of contracts that have used home sale contingencies. In a more balanced market or more of a buyers market you’ll see more contracts with home sale contingencies. However, in a seller’s market these are not as common.

Find your next home by searching here!


Over the years, we’ve handled these situations in a variety of ways. We will be happy to discuss the best solution for your unique situation.

If you do negotiate a home sale contingency and sell your home, from this point it’s just like any other sale. After you sell your home your buyer will complete their inspections and remove any other contingencies. At this point you’ll provide the seller of the home that your buying with your required evidence that you can close thus removing your home sale contingency. Then, at this point you can move forward to close on both homes.

Pro’s…

You go shopping and pick the best home for your family’s needs! When you find it, you negotiate your deal and move forward. It doesn’t get any better than that!

Con’s…

In a seller’s market, where buyers are competing for homes, most sellers often won’t consider an offer with a home sale contingency. Most of the time they prefer to wait for a competing offer without a home sale contingency. In a buyers market this strategy is more successful.

Conclusion

How do I buy a home when I have to sell mine first

So, there you have it, three proven strategies that will all work in the appropriate situations. All you need is a flexible mindset, an open mind, and you can can successfully sell your home first, before you buy your next one!

We’ve helped many people over the years who have opted for one of the three plans. Each one found success while buying a home when they had to sell theirs first. So you see, whichever direction you choose you can get the results you want. And we can help you too!

Check out 8 Steps To Buying A Home . When you completely understand the best practices for buying a home in todays market everything gets a little easier!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

Contact Us at 843-972-7670

Discover South Mount Pleasant Real Estate

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As you begin to Discover South Mount Pleasant Real Estate, you’ll find Mt. Pleasant to be an amazing place full of history and modern conveniences. The town has attracted a wide diversity of people, has wonderful communities, fulfills many lifestyles and offers a plethora of amenities. Mt. Pleasant for many years has been a small rural community just north of Charleston over the Cooper River Bridge. Now, the Town of Mount Pleasant has become the 4th largest municipality in South Carolina.

Like most of South Carolina, this area has a very colorful history. From the early Seewee and Wando Indian’s to todays residents, change and conflict is nothing new to Mt. Pleasant. After being settled in 1680, the town has sustained, endured and survived many challenges. And today, those experiences are what has given the town its soul and character.

For more historical information click the History of Mt. Pleasant. Here you’ll find more great information like this video provided by the Town of Mt. Pleasant Historical Commission.

How To Get Around

From experience, I’ve discovered the best way to teach someone about Mt. Pleasant is to start with the roads. Learning how to navigate the town will give you an accelerated start to discovering the best of the area.

As you begin your discovery of Mount Pleasant, you will cross over the Cooper River Bridge to Mt. Pleasant, here you’ll have a choice to make at the bottom of the bridge. Curve to the right and you’re on Coleman Blvd., curve to the left and you’re on Hwy 17. Keep in mind, typically home prices will be higher per square foot the closer you are to the bridge. So as we help you explore Mount Pleasant Real Estate, we will divide it into separate sections. Learning the neighborhoods along the different roads through Mount Pleasant will make it a little easier to digest.

Discover South Mount Pleasant Real Estate Map as you enter Mt. Pleasant via the Ravenel Bridge.

Discover South Mount Pleasant Real Estate

First on our quest to discover Mount Pleasant Real Estate, we’ll look at smaller sections of the town, one at a time. We don’t want this to be too overwhelming. First, we are going to take a look at the neighborhoods down Coleman Blvd (south) side of Mt. Pleasant.

Condos On The River

On the Cooper River Bridge (also known as the Arthur Ravenel Bridge) coming to South Mount Pleasant, you will notice several high rise buildings on the river. Next to the Bank of America Building is the Renaissance Condominium on the east side and past the Mount Pleasant Memorial Waterfront Park is the Tides Condominium on the west side. These Condos on the Charleston Harbor are luxury condominiums with the best views of Charleston Harbor you will find.

Discover Mount Pleasant – Coleman Blvd

Heading on to Coleman Blvd. you’ll be going through the oldest and more established sections of South Mount Pleasant. The Coleman Blvd area is comprised of mostly low rise store fronts, older homes and some of the earlier shopping plaza’s. With that said, as the area has grown, more and more newer modern buildings have been filling in. This is a very active area with a number of popular restaurant’s, stores and boutiques.

Discover Mount Pleasant Coleman Blvd
Neighborhoods Along Coleman Blvd.

Bayview Acres

The first neighborhood you come to on the south east side of Coleman Blvd is Bayview Acres. A small neighborhood of mostly older homes that has the smaller homes located closer to Coleman and larger homes on the marsh. Here you’ll find homes of every size and shape! Like many of the neighborhoods in South Mt. Pleasant, many homes in Bayview Acres have been renovated. You’ll also find several newer homes that have been built on infill lots over the years. Most lots have large yards with some having expansive marsh, golf course and harbor views.

The Groves

Picture of a street in The Groves

Next on the left or northwest side of Coleman Blvd you’ll find the popular neighborhood The Groves. In the Groves you’ll find mostly older brick ranches built in the 50’s and 60’s on large lots. As you drive through the neighborhood you’ll see a few newer homes. These homes have built over the years on vacant lots throughout the neighborhood . The Groves has approximately 214 homes, a great feel and many of the homes have been extensively renovated. The home values here are typically higher per square foot due to its close proximity to the Ravenel Bridge. As you Discover South Mount Pleasant you’ll find convenience comes with a cost!

Cooper Estates

Homes in Cooper Estates

Just north of The Groves is Cooper Estates. Cooper Estates is a popular older Mount Pleasant neighborhood of about 360 homes. The homes here were mostly built in the late 60’s and 70’s. Like The Groves there has been plenty of renovation in Cooper Estates. Here you’ll find homes on large interior lots, lakefront properties and homes overlooking the marshes of Shem Creek.

Creekside

Just to the north of Cooper Estates is the tucked away Creekside development. Today access to Creekside is actually off Hwy 17 at Dragoon Dr. A beautiful community of 324 properties Creekside was built in the 70’s and 80’s and has a wide variety of home styles. Over the years Creekside has maintained its popularity. One of the first in South Mount Pleasant the Creekside Tennis and Swim Club is located right in the community for residents to enjoy. The Creekside Club always has something going on! Kids can participate on the swim team take swimming lessons, take tennis lessons and more. For adults there are tennis clinics and leagues as well!

Shem Creek

As you continue to Discover South Mount Pleasant, traveling up Coleman Blvd. you’ll cross over the bridge at Shem Creek. Shem Creek is an iconic Mt. Pleasant location with a long storied past. Currently on Shem Creek you’ll find great restaurant’s, a marina, water sport activities and more.

Old Village

Discover Mt. Pleasant Historic Alhambra Hall in Old Village
Historic Alhambra Hall in Old Village

As the Coleman Blvd. bends to the east, after crossing over Shem Creek, you’ll come upon Old Village. Old Village is the oldest section of Mt. Pleasant and is simply breathe taking. Here in Old Village you can feel the history all around you. You’ll find it easy to imagine what it might have been like years ago in a more simple time. This neighborhood exudes Southern Living at its best. Having some of the priciest homes in Mount Pleasant, Old Village is where the who’s who of Mount Pleasant have lived and currently live! Currently, more than ever Old Village is now a mix of longtime local families and residents newer to the area.

Old Village Homes For Sale Today!

Within the general area considered by most now as Old Village are a few smaller subdivisions to note. These would include Old Mt. Pleasant, Osceola Heights, Dawson Terrace, Old Village Landing and a few other smaller sections.

Heading up Coleman Blvd past Old Village on the north side of the road there are a couple smaller neighborhoods. These would be the Brookgreen, Shemwood and the Shem Creek neighborhoods. As you Discover Mount Pleasant you’ll find many smaller neighborhoods throughout the area worth checking out. However, in this post we will be focusing mainly on the larger neighborhoods.

Sullivan’s Island

Coleman Blvd. eventually bends to the right and its name changes to Ben Sawyer Blvd. or State Road 703. As the road bends it takes you out to Sullivan’s Island. Sullivan’s Island is its own town and is one of the more popular beach destinations in the Charleston area. On Sullivan’s you’ll find private residences, second homes and vacation rentals.

Discover Mount Pleasant The Split at Haddrells Point

Coleman Blvd Ends – Ben Sawyer and Chuck Dawley Roads Begin

Haddrells Point Tackle

As you head north on Coleman Blvd the road splits in front of Haddrell’s Point Tackle and Royall Hardware. If you take the turn to the left you’ll head up Chuck Dawley Blvd towards I526 West. A slight bend to the right, the road turns into Ben Sawyer Blvd. Ben Sawyer Blvd will take you over the causeway to Sullivan’s Island. Before the causeway we are going to turn left at Rifle Range Road. Rifle Range Road will takes us north through South Mount Pleasant and into North Mount Pleasant.

Continue Your Journey Up Rifle Range Road

Next up on our tour are The Neighborhoods on Rifle Range Road!

Click Here to Continue
Your Tour Up Rifle Range Road!

The Author…

Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill

How Can We Help You?

Contact Us at 843-972-7670

1180 Sam Rittenberg Blvd Ste. 300 / Charleston, SC 29407 / 843-790-7000