SOUTH CAROLINA - Several important aspects of South Carolina's real estate market impact the state's growth. These include a robust job market, an increased population, and an overall shortage of housing inventory. These factors combine to create a real estate boom. Despite a lack of housing supply, the demand for housing is still high.
Pessimism
Fannie Mae's recent forecasts for home price appreciation indicate that the state will experience a slowdown in the next year, with annual rates of appreciation slipping back into the single digits. By 2023, home prices will grow at less than 5%, which could be a depressing prospect for home buyers.
The housing market is in an oversold, over-inflated state. As mortgage rates rise, more buyers will likely be priced out of homes. This will increase the risk of a 2023 housing crash. As a result, many sellers will be reluctant to sell, and prices will fall to avoid sticker shock.
Growth
After two years of increases, South Carolina's housing market has moderated. But experts say changes are afoot in the housing market, and new opportunities for buyers and sellers are arising. Brad Allen, broker-in-charge of The ART of Real Estate in Columbia, said the housing market has cooled off, and new choices are opening up.
Fannie Mae expects home price growth to slow by the end of 2023. It predicts year-over-year home inflation to fall to 4.4% in the second quarter, ending the year at 2.9%, half its pre-pandemic average. This is a positive sign for investors, especially those looking to flip properties.
South Carolina's housing market will remain strong in 2022. High demand, limited supply, and continuously rising house prices are driven by high demand. In June 2022, the average home in the state was worth $291,591, an increase of 26.7% over the previous year. Zillow predicts that the market will continue to rise over the next several years.
Price Drops
There is an increased chance that prices in South Carolina will drop in the next few years. The housing market peaked in May 2022, but the demand for real estate has decreased since then. In July 2022, only 35.7% of homes sold above their list prices. This home sales decrease indicates a changing housing market, with higher demand than supply.
A number of factors could cause prices to fall in the state. The first factor is the lack of inventory. According to Zillow, inventory is 54% below July's levels. Therefore, there's a high probability that home prices will drop in 2023. Also, home construction has increased in recent years but is still far behind demand. Hence, it would take a large drop in demand for housing for prices to fall.
Supply Delays
As the economy continues to grow, a number of factors can contribute to supply delays in South Carolina real estate. New residents will exacerbate the shortage, adding to the demand for housing. Meanwhile, a lack of housing may lead to higher prices, fewer new homes, and increased competition. These factors could make 2023 a challenging year for the real estate market.
Despite this, the South Carolina housing market remains strong. This is largely due to the high demand, low supply, and constantly rising home prices. According to Zillow, a typical South Carolina home was worth $291,591 at the end of June 2022, an increase of 26.7% from the previous year. Zillow predicts that prices will rise through 2023.
Digitization
South Carolina's real estate market has continued to grow in recent years due to low inventory, high demand, and consistently rising house prices. In June of 2022, the average home in the state sold for $291,591, up 26.7% over the previous year. This trend will likely continue into 2023, with Zillow predicting that the market will continue to grow in value.
The real estate market will become even more competitive in the next few years. As the unemployment rate declines, the housing market is expected to grow slower. In addition, virtual reality tours and augmented reality visuals could become widespread, bringing increased awareness of these technologies to home sellers and buyers.
