If you’ve been tracking the real estate market here in the Lowcountry over the past few years, you know that the local market has been hot, hot, and hotter. That being said, we did see a bit of a softening in the last part of 2023 as interest rates rose and began to affect buyer’s ability to purchase. It’s clearly been very competitive here and common to see multiple offers on properties in every area of Charleston. In fact, the median sales price has been on a steady climb and at the end of 2023 sits above $500,000 making the median price per square foot at around $300. Taking all this into account, one can understand why investors have been a bit on hold in many parts of the Holy City, but with a slight softening we’ve also seen investors starting to make their moves as the ability to short-term rent (Charleston is consistently on the top list for spots in the country for highest occupancy rates and average nightly rates) and a lower cost of living make this a favorable area. And due to the high percentage of medical students, college students, and military we tend to enjoy higher rental rates and low vacancy gaps.
Also, when we take a look at the factors that drive housing demand and therefore prices, Charleston continues to rank very high.
- Economic Conditions: Local conditions remain very favorable, with new companies moving into the area and continued strong job growth. We’ve seen this mainly in the areas of tourism, manufacturing, military, education, and aerospace.
- Population Growth and Demographics: The word has definitely gotten out, and what can we say? We are attracting people from near and far each day that want to move to a sunnier climate and a slower pace of life. With such a high demand for housing and a low supply of new construction (we’re in a new housing shortage) pressure has been placed on resale and rental markets. Newcomers to the Lowcountry tend to be educated and of working age, coming from areas like Washington DC, Greenville, Asheville, New York City, Ohio, and Atlanta.
- Government Policies and Incentives: Local governments have been mainly favorable in terms of progressing the growth of jobs and industry, as well as continued improvements like parks and green space initiatives. Also, property taxes remain tied for 6th lowest on the national scale which is very enticing for property owners. That being said, we have seen some movement in short-term rental regulation and this has put a bit of a damper on short-term rental availability. Lastly, South Carolina does not impose an Inheritance Tax or an Estate Tax, which is interesting to note.
- Housing Supply: Supply continues to be low which means that prices continue to be pushed up, and time on the market which was roughly 46 days continues to mean most homes ready to go are moving quickly. Also, though inventory has somewhat balanced out, we still continue to be down overall from a year-over-year perspective.
In terms of 2024, here’s what the experts at Charleston MLS have to say:
“As we move into the new year, Charleston’s housing market is expected to see continued growth. Interest rates and increased demand for housing due to job growth are likely to drive market dynamics. Experts predict a 2.2% increase in property values through 2024, though some houses may still sell below their listing price.”
As we continue to attract people looking to experience the charm of Charleston, we feel there will continue to be opportunities to invest in real estate, whether that be for a primary residence, vacation rental, or sheer investment. Of course, we will continue to monitor things on the ground and provide you with insight on the daily. If you’d like to chat about how you can invest in the local market and take advantage of potential opportunities drop us a line. And if you’d like to stay up-to-date on the trends in the market, make sure to sign up for our newsletter to stay in the know.
Source: Kelly Stradling, Realtor ©
