2021 Real Estate Trends
Keeping up with current real estate trends can help you make wise decisions about property investing or when buying or selling your home. Jeff Cook is an astute real estate professional whose observations are valued and sought after by numerous parties throughout North and South Carolina. Here is a review of real estate trends, particularly the real estate market in SC.
As far back as July 2021, buyers and sellers seemed to be on different pages. According to a September 2021 article in Forbes Magazine, “Over half of buyers (64%) think it is now a bad time to buy. By contrast, an even higher percentage of sellers (77%) think it is a great time to sell.”
Indeed, throughout 2021, home prices were high, inventory was low, and competition was fierce. Zillow reports that this was also true of the real estate market in SC. They report that South Carolina home values went up 21.7% from 2020 to 2021. A report on the Fifth District Economy by the Richmond Federal Reserve Bank indicates that SC home values appreciated 20.8% over 2021.
Real Estate Prices
Many different factors contribute to the rise and fall of real estate prices, but the general trends we saw throughout 2021 were high demand and low supply, causing the consequent rise in housing prices.
For an example from the real estate market in SC, homes in Charleston averaged a price of $465,452, up 24.5% over 2020. They also spend about 11 days less on the market before being sold. About 31% of homes sold for above list price.
The market was indeed beneficial for sellers, primarily because of three contributing factors:
Millennials continue to leave urban areas for suburban and rural areas, preferring space and freedom to tight quarters. They can often find a larger property for less outside urban areas, but with fast access to all the amenities urban areas have to offer.
The pandemic opened up more opportunities for remote work, enabling people to live practically anywhere and still earn a comfortable living. Consequently, people and families are choosing to be more mobile, again, trending away from urban areas toward suburban and rural locations.
Supply chain issues continue to plague new home builds, and buyers are looking more toward purchasing existing homes instead of building their own.
Reports from Freddie Mac indicate that interest rates in early 2021 were at all-time lows, in some areas as low as 2.74%. Of course, rates fluctuate daily according to a wide variety of factors. As recently as January 2022, Freddie Mac predicted that mortgage interest rates will rise throughout 2022 and into 2023, from an average of 3.6% in 2022 to 3.9% in 2023. At the same time, they predict that the market will remain stable even as prices taper off.
This seems right in line with the real estate market in SC. US Bank reports that as of February 9, 2022, average mortgage interest rates for conventional loans on single-family homes in South Carolina were 3.875% with 3.946% APR.
Housing inventory is simply the number of homes available in a given market for purchase. Low inventory and high demand seems to be the prevailing conditions across the United States, including the real estate market in SC. The pandemic greatly slowed home sales in 2020, as families were reluctant to allow strangers inside their homes for viewings.
The past year (2021) saw this shifting as home sales rose appreciatively, and market experts predict that it will continue to rise into 2022. The Charleston Post and Courier reported in January 2022 that South Carolina home sales set a new record in 2021 and is “expected to remain strong in 2022.”
This may model well for sellers, but continuing supply chain problems will certainly make existing homes for sale at a premium, posing difficulties for buyers across South Carolina.
State of the Real Estate Market in SC
In the report from the Richmond Federal Reserve Bank cited above, “Residential permitting activity fell 13.9 percent in South Carolina from November to December and fell 14.5 percent from its year-ago level. Meanwhile, housing starts in South Carolina fell 20.7 percent in December and were down 12.8 percent from December 2020.”
Mainly due to the supply chain crisis, new home construction is slowed significantly, which means demand for existing homes will remain high for the foreseeable future. Most experts see the pricing surge leveling out, which is good news for potential buyers and investors. Even with higher prices, home sales remain strong.
Many sellers enjoyed multiple offers on their homes, allowing them the luxury of raising their asking price and even fomenting bidding wars. Indeed, it has been a sellers market. But buyers have not been daunted from purchasing desirable properties. As the country has opened back up and families are largely back to work, home purchases throughout the real estate market in SC remain strong.
Are you looking to relocate to South Carolina? The real estate market in SC is littered with desirable and affordable homes for different sizes of families. Jeff Cook Real Estate can help you locate the perfect home for your needs. Call 855-HEY-JEFF when you are ready to buy or sell.