A Healing Housing Market: Better Balance Between Supply and Demand in Lowcountry Real Estate

Buyers Return Despite Increasing House Prices

Three years ago, many renters in the Lowcountry region once feared they would never be able to escape the rental market and own a house. But with the COVID-19 pandemic firmly in the rearview mirror, a healing has begun in the local real estate market. After three years of skyrocketing prices, rocketing interest rates, and a near-complete absence of inventory, the market is showing some encouraging signs of balance.

Despite the rise in property prices, buyers have finally come to terms with the new interest-rate environment and let go of their dreams of 3% mortgages. Those who were reticent about selling their homes due to their cushy low-interest mortgage deals have also been forced to move on, pursuing their plans to sell in spite of increasing rates. This change in mindset from both prospective buyers and sellers has resulted in a more balanced market, fueling the proliferation of work opportunities for real estate agents and mortgage lenders, and fostering general optimism about home sales in 2024.

A Divided Market

Despite the broad brushstrokes of recovery, the market remains somewhat divided. “Houses that are priced right and don’t have any glaring issues are selling quickly, almost as they did two years ago. Overpriced homes are languishing on the market,” according to an anonymous broker associate with a local real estate company. In a healthy market, houses used to take eight weeks to sell, on average. Two years ago, it took a blistering two weeks. Today, properties are taking an average of five weeks to sell, showing promising signs of returning to a normal market.

However, the influx of prospective buyers continues to outpace new construction and drive up house prices. The median price of homes grew 16% through the year, reaching $420,000 in August. Despite this, there’s no immediate solution in sight for the affordability crisis. A household with a median income can now afford only 73% of a median-priced home. This means a quintessentially middle-class family can afford a house selling for no more than $306,000, assuming they have saved up enough for a downpayment and closing costs. For these families, their best bet would be to look for townhomes, condos, and homes outside the 526 corridor.

Best Buys in New Construction

New construction homes offer some of the best deals. Using connections with home builders, agents are able to find lower interest rates, price-offs on closing costs, and temporary buydowns on rates for their clients. This can help families move into homes and give them time to adjust to the increasingly high costs of housing.

The Missing Middle

The lack of affordable housing options, specifically what is referred to as the “missing middle” — multi-unit, multi-story residences that are not apartment buildings — is a recurring issue. These townhouses and condos are typically more affordable and space-efficient, offering more housing on a smaller footprint. However, concerns over increasing traffic have made municipalities and residents hesitant to approve these developments, leading to a housing shortage in the region.

Check North

Many prospective buyers, unable to afford the escalating prices near the coast, are looking north towards Summerville. However, here too, affordability is a problem, with median prices for Dorchester County approaching the $400,000 mark. For these buyers, patience is crucial. As one local real estate agent suggests, “They must understand it may be many months, and they may have to make several offers.”

Agents advise their clients to keep their expectations in check, get pre-approved for a mortgage, save diligently for their down payment and closing costs, and have a clear understanding of what they want and what they can afford before they even begin their house hunting. All these preparedness steps will prepare them to jump at an opportunity when it presents itself.

The long and arduous search for a dream house is entirely worth it—as was the case for Jordan Smith and Brandon Bishop, who, after two years of searching, finally found their dream house in Ravenel. They are excitedly planning flower plantings, choosing paint colors, and even intending to name their first goat after their persistent and helpful real estate agent!