Why the hot SC housing market might finally be cooling and what buyers and sellers should do now
Summer has warmed up in South Carolina, but the same can’t be said for its housing market.
The latest housing data shows home sales have slowed year-over-year as prices and interest rates have risen, indicating a cooling of the market after two years of steady gains, some housing industry experts say. And with market changes underway, there are new choices buyers and sellers should consider to make the most of them, they say.
“There’s a different way to play the game now,” said Brad Allen, Broker-In-Charge and CEO of The ART of Real Estate in Columbia.
According to the latest South Carolina Realtors statistics, home sales in South Carolina were down 4.8% from January through April, year-over-year. Home sales for Columbia were down 4.3% over the same period. For the U.S. overall, single-family home sales fell sharply by 16.6% in April alone, the latest Census Bureau data shows.
Also, median sales prices were up 17.1% from January through April for South Carolina and 17.5% for greater Columbia.
Meanwhile, the Federal Reserve began raising interest rates earlier this year to quell inflation and also slow skyrocketing demand and prices in housing markets across the U.S.
To some realtors, the higher interest rates and the higher sales prices themselves have begun to finally slow demand in the state and Columbia.
“I think that is an accurate depiction … there is a slight slowdown,” said Karen Yip, broker and owner of Yip Premier Real Estate in Columbia.
Allen said he had also started seeing a shift in the market.
“Homes are sitting a little bit longer now and I’ve even seen a few price reductions,” Allen said.
With the market beginning to cool, buyers and sellers have a few things to consider.
Yip said that given what’s happening with interest rates, buyers should make sure to ask their lender pinpointed questions.
“What if the Fed raises rates … what is the cost to buy down that rate by half a point,” Yip said of potential questions to ask. “A good lender will be able to educate you.”
Yip also said that just because a buyer can qualify for a certain loan amount, that doesn’t mean he or she should max it out.
“That will prevent you from having buyer’s remorse,” she said.
Allen also suggested getting a good lender and that the market was becoming a better time to buy.
“Things are taking a little longer to sell, so sellers will be a little more open to negotiations,” Allen said.
For sellers, now is the time to jump in and put that house on the market, Allen said.
“We don’t know when the market will top out,” he said. “I’d cash out of that equity and take advantage.”
Yip agreed that sellers should still get into the market now if they’re considering.
“But I think sellers should also make some attempt to mitigate expectations on what buyers are willing to do,” Yip said. “Sellers have benefited from the unusual market the last two years, basically getting whatever they want — but if you plan to sell and capitalize at the top of the market now, you should do so sooner rather than later.”
Joey Von Nessen, research economist at the Darla Moore School of Business at the University of South Carolina, said the housing market experienced unusually high demand and prices over the last two years as the economy reopened from the COVID-19 pandemic. Federal stimulus money and wages from people returning to work helped spur demand. However, the supply of new homes has still not caught up with demand, meaning it’s still uncertain what could happen to the market in the later part of this year.
“The second half of this year, the question will be, which factor will dominate, supply or demand,” Von Nessen said. “That will be determined by the Fed and how quickly they can react.”
He added, however, that in the long term, the future of the state’s housing market appears strong.
“South Carolina continues to see significant population growth and that’s going to keep demand relatively strong,” he said.
This story was originally published May 31, 2022 at 5:00 AM.
