Buying or selling a home in SC during coronavirus? Here’s the good and bad news
Home sales in South Carolina tanked big time in April, dropping more than 20%, as sellers and potential buyers bunkered down during the coronavirus pandemic.
New listings were down 29.8% to 8,594, according to Multiple Listing Service statistics provided by the S.C. Realtors Association.. Pending sales decreased 35.5% to 6,221.
Folks just don’t know what to do, experts say.
“The jury is out as to what the effects (of the pandemic) might be,” said William Harrison, owner of The Harrison Co. real estate consulting firm in Charleston and a lecturer at the University of South Carolina’s Darla Moore School of Business. “There is uncertainty, so people are pulling back.”
In Columbia, sales dropped 12.5% over April 2019, according to the MLS.
Sales in the Greenville market dived 12.6%. And the Charleston area slid 11.7%.
And the slide isn’t just in the big cities.
Rock Hill home sales were off 12%, and Beaufort dipped 14.4%.
The resort and vacation communities of Myrtle Beach and Hilton Head took some of the biggest hits, dropping 21.7% and 16.3% respectively.
Statewide, home sales in South Carolina in April plunged 21.3% over last year. In the first four months of this year, sales have dropped 7% from the same period in 2019.
“Once you introduce fear into any investment decision the market players tend to drop off,” Harrison said. “And that’s what happened, demand has dropped off.”
Good news
That’s the bad news.
The good news is that the homes that did sell — 6,800 statewide in April — actually saw prices go up.
The median price of a home in South Carolina rose from $210,000 in April of 2019 to $225,000 last month. That’s an 11.9% jump.
And every region in the state except the Cherokee County area saw increases:
▪ The Midlands saw the median price of a home rise from $178,000 to $188,900 over April of last year.
▪ In the Upstate median home prices rose from $216,723 to $225,000.
▪ And the Charleston region saw median prices jump from $265,000 to $285,000.
The same trend occurred in smaller communities: Hilton Head up 5.7%, Beaufort 6.2%, Myrtle Beach 11.9% and Rock Hill 6.8%.
That, too, is related to COVID-19, experts say.
The pandemic “had people pull their houses off the market,” said Owen Tyler, president of the S.C. Realtors Association and managing partner of The Cassina Group of Charleston. “So inventory is very tight.”
Inventory shrank 10.5 percent to 27,861 units from April of last year. That is good news for those who intend to sell, as it keeps prices higher. But it’s bad for buyers for the same reason.
Also mortgage interest rates are super low at the moment, which is tied to the dramatic sell-off in the stock market since March.
According to Forbes, mortgage rates have fallen to all-time lows. It reported that Freddie Mac’s weekly rate survey for May 21 finds that interest rates on 30-year mortgages averaged 3.24%. The publication noted that less than two years ago, the average rate was a percentage point and a half higher.
But landing one of those low interest loans is becoming more difficult as lenders tighten their qualifications during an economy in duress. Your credit score in the high 600s may now need to be in the high 700s.
“Get pre-approved,” advised real estate agent Karen Yip of Yip Premier Real Estate in Columbia. “And if you were pre-approved before (the pandemic) you better check.”
A new way of home shopping
Another bright spot is that buyers and sellers who are in the market are serious.
If someone took a job in the Palmetto State prior to the pandemic, or has to move for other reasons, they might not have time to see how the market reacts going forward.
“The Lookie Lous are on the sidelines,” said Columbia real estate agent Graeme Moore of The Moore Co., referring to those who casually browse homes and are in no hurry to buy.
“The people who are serious are the ones in the market,” he said. “If they are calling (him) they are very serious about buying or selling.”
And showing or touring homes has changed dramatically as well.
Many agents are asking homeowners to turn on all the lights in the house and open all doors and cabinets so potential buyers don’t have to touch any surfaces. Some are asking buyers to remove their shoes and wear a mask before touring a home.
“It’s an individual choice,” Yip said. “Some people are asking to see homes through video conferencing.. Others prefer personal showings. But the majority of sellers want some kind of precautionary measures to be taken.”
Moore added: “We’re asking (potential buyers) to leave their kids in the car and ask that no more than two people enter a home at a time. And we’ve cut way back on open houses.”
But Harrison, of USC’s Moore business school, said the real estate landscape could change dramatically going forward. Factors like a second wave of infections, the potential for a vaccine and even the presidential election could have profound effects on the market.
“You can get too wrapped up in the numbers too early,” he said. “Look at them in a month or two months to see a clear pattern. Real estate numbers tend to lag reality by 30 to 60 to 90 days.
“The effects won’t show up until later in the year,” he said. “Right now, people are backing off. The question is how long that will last.”
This story was originally published May 22, 2020 at 10:57 AM.