SC housing market in rare ‘summer slump.’ Here’s why and what that means
South Carolina has been characteristically hot this summer, except where its housing market is concerned.
The South Carolina housing market has seen low sales this summer — a time when home sales normally spike. The summer slump is part of a larger, nationwide trend of unseasonably cool housing markets caused by low inventory, high costs and changing consumer buying preferences, some industry experts say.
“The demand for housing in South Carolina — like that of the U.S. as a whole — has been much cooler when compared to the last several summer buying seasons,” said Joey Von Nessen, research economist at Moore School of Business at the University of South Carolina.
Housing market data
The latest South Carolina Realtors data shows that total home sales in the state in June were down by 13% compared to the same month last year. In contrast, total housing market sales were up 14.7% in the state in June of 2021, year-over-year.
May home sales in South Carolina were also down 12.5%, year-over-year.
Nationwide
National Association of Realtors data shows that national home sales rose 0.2% in June from the previous month, but were down 20.4% compared to the same month last year. Also, new listings were down 17.3% in June.
Summer slump causes
According to a June statement from the National Association of Realtors, the U.S. housing market remains cooler than usual this summer, “due to a combination of low inventory and higher borrowing costs, which have restricted market activity going into the summer home buying season.”
The shortage of homes for sale has kept prices high, with a national median sales price of $396,100 as of June, NAR adds.
The South Carolina median sales price for June was slightly lower at $338,000. It was also a 2.6% jump over the same month last year.
Besides high borrowing costs and low inventory, changes in consumer preferences have contributed to the summer slump, Von Nessen said. Consumers have been shifting their buying activity toward services and away from goods.
“For example, spending on air travel, restaurants and lodging have all risen – in many cases at the expense of home buying, remodeling and other consumer goods,” Von Nessen said. “Additionally, consumers have now spent most of the excess savings they had acquired in 2020 and 2021 due to federal stimulus payments, meaning they now have fewer financial resources to draw on for a new home purchase.”
SC housing market remainder of 2023
Von Nessen said looking into the second half of the year, it is unlikely the South Carolina housing market will return to the exceptionally high demand it had in 2020 and 2021.
“Rather, housing demand is more likely to stabilize around current levels,” he said. “Any further significant pullback would probably only occur if the labor market were to soften and reduce employment levels.”
