South Carolina Witnesses Home Sales Upsurge Following a Sluggish Year
In a turn of events, the real estate market in South Carolina has started seeing an uptick in sales after a year of declines. In February, most of the state’s housing markets reported strong year-over-year home sales gains, the first time for such growth in over a year. This positive trend aligns with national pattern, showing signs of an improving housing market, as more supply makes its way to the market and mortgage interest rates begin to soften.
Market Rebound by the Numbers
Industry data outlined a 7.9% jump in year-over-year home sales in the month of February. This is a remarkable shift, considering that housing sales have witnessed a decline of about 10% spanned over the past year. But with the past six months showing a clampdown to the rate of decline to roughly 3%, the sales data trend is indicative of some significant improvement.
On a nationwide scale, as indicated by the latest data from the U.S. Census Bureau and Department of Housing and Urban Development, sales of new single-family homes experienced a rise of 1.8% year-over-year in February. According to Redfin, new listings witnessed a surge of 13% nationwide from a year earlier during the four weeks concluding on March 3. This is the largest rise seen in almost three years. Additionally, February marked the first month where the number of homes for sale witnessed a year-on-year increase following eight months of declines.
A Snapshot of South Carolina Housing Market Growth
Data from the South Carolina Realtors, affirms sustained growth in home sales across various housing markets within the state:
- Aiken — 13.6%
- Beaufort — 0.6%
- Charleston Trident — 11.9%
- Coastal Carolinas — 2.7%
- Greater Columbia — 15%
- Greater Greenville — 11.9%
- Hilton Head area — 24.7%
- Piedmont Regional — 4.6%
- Spartanburg — 19.2%
- Western Upstate — 11.5%
Following gains in February, South Carolina also noted visible improvements in January:
- Aiken — 2.2%
- Charleston Trident — 4.1%
- Greater Augusta — 4.9%
- Greater Greenville — 13.3%
- Hilton Head area — 11.8%
- Pee Dee — 4.2%
- Sumter/Clarendon County — 1%
- Western Upstate — 14.1%
Unpacking the Market Behaviour
Industry insiders have attributed the recent developments in the housing market to significant readjustments that have taken place over the past two years. Key among these adjustments were the spike in mortgage interest rates that have risen considerably since 2022, rendering homes less affordable for the average buyer. Consequently, the extent of goods market-style spending decreased while services-oriented spending increased, leading to a shift back to pre-pandemic norms.
These factors have posed a considerable challenge to the market, but experts believe most of this readjustment phase is now in the rear mirror, with sales activity stabilizing at pre-pandemic levels. In addition to the increased inventory noted by Redfin Economic Research Lead, high housing costs, a separate, yet significant obstacle, may also be on the downward trend as mortgage rates are predicted to decline gradually as price growth loses momentum.
Prospective South Carolinian homebuyers can look forward to potentially less competition as more inventory becomes available, even as housing affordability is likely to improve this year. This prediction, combined with the Federal Reserve’s move to lower interest rates by the second half of 2024, should help decrease mortgage interest rates and stimulate the further stabilization of the market.
