–Drew Grossklaus, Sales Director/BIC East Cooper
The contrast between the real estate market at the beginning of 2022 and 2023 was quite extreme. Record low inventory, high demand and low interest rates were all at play in 2022. Last year started with demand still being relatively strong and inventory relatively low. Mortgage rates would rise drastically nearly breaching 8% for a 30-year fixed – double where they started in 2022. While both years saw good demand with low inventory, the reasons for these factors were different. In 2022, many people did not want to sell their homes as they didn’t know where they would go and were in a situation where they felt they were selling high, but then had to pay high. In 2023, drastic increase in mortgage rates produced what real estate referred to as the “golden handcuffs.” The term refers to those who currently had low mortgage rates in the three percent range and didn’t want to sell their homes to then be in a mortgage that was much higher.
As always, Charleston is a market that tends not to follow all the national trends. While Charleston did see a decline, it was not at the level of most of the country. While we saw a slight decline in sales at William Means, we achieved more than our predictions for the year and a higher average sales price than in 2022. Many of our clients were optimistic that the Federal Reserve would stop raising rates and mortgage rates would then recede in the coming months and into 2024.
At the end of 2023 and into the start of the new year, we have seen mortgage rates begin to come down and the Federal Reserve has paused rate increases and even made indications of possible rate reductions. We are also seeing many of our clients wanting to get information about listing their homes this year. Our clients who have been waiting to list their homes for sale are wanting to make changes based on life circumstances including growing their families or on the opposite end of the spectrum, downsizing as they become empty nesters or reach retirement. These factors are pointing to an increase in home inventory for 2024.
The signs of lowering mortgage rates and increased inventory are welcome signs. And, since Charleston is such a wonderful place to live, what doesn’t seem to change in our marketplace is demand. William Means celebrated its 90th anniversary last year, and we are ready to assist with all your home buying and selling needs in 2024.
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