The inventory shortage is a nationwide problem. He said the national group think about a balanced market as a six-month supply of homes, meaning it would take six months to deplete the current inventory. Now, inventory levels are between three and four months’ worth.
“I’m basically showing property around the clock,” said Kellie England, a real estate agent with AgentOwned Realty. We are seeing price increases … across all price points,” he said. “It’s not limited to one area of the market. This is a phenomenon that is affecting all of the housing markets, in general, in the Charleston region.”
Because of high consumer confidence, companies such as Volvo and Mercedes investing in the region and creating jobs and the overall attractiveness of living in Charleston will set new records.
Last year was a strong one for the real estate market, according to a report from the Charleston Trident Association of Realtors, and agents are optimistic that their good fortune will continue in 2018.
CTAR is teaming up with elected officials and staff at municipalities across the Lowcountry to find solutions to affordability issues, in addition to consulting with S.C. Community Loan Fund, various chambers of commerce and the Charleston Regional Development Alliance to fund research.
England said she thinks prices will nevertheless rise at a “steady and slow” pace.
“We don’t see them rising at the same rate they rose for the last 24 months, and we believe that they decreased a little over the last six months during that precipitous climb, but we I do think it’s still on the upswing, but I don’t think it’s at the same clip, which I actually think is an advantage.”
We are seeing price increases … across all price points,” he said. “It’s not limited to one area of the marketplace. This is a phenomenon that is affecting each of the housing markets, as a whole, in the Charleston region.”
Despite the challenges, 2018 seems positive for the residential property market.
Until that reverses or more homes are built at a faster pace, we’re probably heading to be coping with many of these same concerns, at the very least for the next year approximately.
“2017 was the very best year I’ve had, and I’ve already got three closings (this year). … I’m basically showing property all the time,” said Kellie England, a residential property agent with AgentOwned Realty. “So my biggest problem is finding the inventory.”
Affordability has to do with greater than just housing.
The dynamics and the incentives that remain in the market place today is a lot different, and it’s not based upon speculation, usually, but simply the basics of economics, balancing supply and demand.
“It’s very important to keep in mind that housing is local and also what may be happening in your neighborhood may not be what’s happening in other neighborhoods.”
A University of South Carolina research economist who spoke at CTAR’s Year in Review Residential Market Update, said housing markets across the state look good, and he predicted 4.1% growth in sales across the state.
Higher prices have started to pose problems for the region.
Jim Mills said, “a declining amount of developable land, especially in Mount Pleasant and downtown Charleston, stands in the way of new construction in those areas, pushing prices even higher.”
Affordability is a key contributor to the region’s traffic problems because people are must drive until they qualify, leading to longer commutes and more traffic jam when people can’t live near to where they work.
With median prices higher and continued low inventory, our supply, and demand are out of balance, which has priced some people away the market place.
According to CTAR’s Annual Report on the Charleston Area Housing Market, new listings increased 4.5% in 2017 and closed sales were up by 3.1%. Houses remained on the market for an average of 55 days in 2017, the report said, three days fewer than in 2016 and 31 fewer days than in 2013.
The National Association of Realtors, states that rising prices aren’t a signal that a bubble is looming, as it was before the Great Recession when people were buying homes for financial gain under the assumption that prices would keep rising.
Affordability has to do with much more than just inventory and demand– more inventory would be good, but if it’s not at the right price points, it’s not a solution. We can build, build, build, but if not anybody can afford to buy … that introduces the topic of the lagging wage growth in our region.
The national group thinks of a balanced market as a six-month supply of homes, meaning it would take six months to deplete the current inventory.
According to CTAR’s report, the median house price in the Charleston region was $251,333, which is 4.8% greater than in 2016 and 22.7% greater than it was in 2013. This is the result of home prices rising to meet demand after the recession, in addition to prices normalizing after the recession.
“We don’t think it’ll keep anybody away from the market, but what it does, unfortunately, is it increases the price. … the slower construction is for new construction, it allows time for those prices to increase.”
Jim Mills said he expected the upward sales trend from 2017 to continue in 2018, but, like England, the biggest hurdle he is facing is having enough inventory to sell.