February 2024 Market Update
Economists are calling this the “year of readjustment,” and South Carolina continues to be resilient as 2024 kicks off. Our local and state economy maintains strong employment growth, especially locally with booming retail and hospitality and state-wide manufacturing. Everyone is still closely watching inflation and interest rates, a trend that will undoubtedly continue. Food and energy costs outpace wage growth and many are still working the hustle culture with gig jobs, like Uber and other delivery services.
What does this mean for our real estate market? Well, housing costs are the biggest factor contributing to inflation right now. With build costs and prices rising at a slower rate last year, they are now steady and we have not yet seen decreasing home prices. Primary factors influencing this year’s housing demand are population growth, strength of the labor market and mortgage interest rates. Experts forecast the lower east coast will have more population gains than anywhere else in the country. The tri-county area has had a 20% population surge over the last decade for a combined 830,000 residents! And despite the recent jobs report, SC’s layoff rates remain low. In the commercial market, property vacancies are at a record high nationally, peaking towards 20% versus 12% pre-pandemic, and Charleston still sits just under 12% tri-county wide.
Mortgage rates continue to get all the headlines but our local market persists with high demand. First-time home buyers (of all ages mind you!) and thriving relocation leads most of the market activity as Charleston continues to rack up accolades and tourism endorsements.
Peak rates have adjusted down and lenders are getting creative to win business in a competitive environment. In addition, prepayment spreads have most recently been built in around .7% because the latest buyers are expected to refinance within 24 months, and it takes two years of repayment before a mortgage is profitable. As rates come down, some of that spread is going to come out as the likelihood of refinancing decreases - even further lowering a buyer’s cost to purchase.
Locally median prices are still rising but not as quickly as we saw in 2021 and 2022. Low inventory remains our biggest hurdle to slow down prices. The rate of growth in sales activity and rate of price growth does not align with the national headlines so reach out to us if you’re looking to get a real-time pulse on the market or accurate value on your home. We’re always happy to come see your home and do a real estate review so you know where your assets stand.
