–Drew Grossklaus, Sales Director/BIC East Cooper
It has been well documented that Charleston is currently experiencing a unique time in real estate. In simple economic terms the real estate market is facing the law of supply versus demand, with low supply and high demand. Right now in Charleston we are witnessing some of the greatest discrepancies of low supply and high demand.
Many factors have created this situation and it really is a perfect storm. While many are saying that this started as we began to emerge from the pandemic lockdown of 2020, it actually was beginning before that. One factor that has contributed to demand for the last few years is interest rates. Interest rates have been at historically low levels and in 2019 they dropped below 4% for a yearly average. In 2020, interest rates averaged 3.11% and in 2021 they are currently averaging below 3%. Rates that low inherently increase the amount of home buyers and their ability to afford higher priced homes.
A second factor that has been occurring for years in Charleston is publicity. Charleston has been named the #1 Small City in the U.S. By Condé Nast Traveler 2020 Readers’ Choice Awards for 10 consecutive years. Charleston has been voted #1 in Southern Living’s 2020 ‘South’s Best’ Awards for four consecutive years. The amount of publicity in the form of awards, articles, features, television appearances, and general mentions, images, etc., across all media platforms is staggering.
There are few places that lend themselves well to both tourism and daily life as Charleston does. That brings in a third factor that has been happening for years in our area: growth. The Charleston Regional Development Alliance states that Charleston has nearly 30 people per day moving to the region. The percentage of population growth from 2010 – 2019 was nearly 20%, versus the U.S. average of 6%.
Another contributing factor is location. Charleston has always had beautiful beaches and warm weather. It is easy to imagine why many feel a calling to places like the Lowcountry when many reside in locations that are land-locked and experience months of cold weather. Charleston and technology have done things to make it easier to transition from vacation to home. The Charleston International Airport has direct flights to 26 cities across the U.S. This makes it easier to make Charleston someone’s new home and still easily visit their former home. Technology advancements have also given many the ability to work wherever they choose. These advancements have been happening for years and more and more people are taking advantage of living in a place like Charleston without leaving their current career based in another place. Before the pandemic, all of these factors were leading to demand being high and inventory being low for Charleston real estate.
The last six to nine months introduced factors that have added to demand and created a perfect storm. The pandemic led to additional factors in housing demand that no one could have predicted, and many of these factors were already occurring in Charleston and became magnified due to the pandemic. The first was migration to Charleston for its climate and beaches. The lockdown put a premium on places that offered open spaces and weather that allowed for year-round outdoor activities. The lockdown also led to an awareness and education in the possibilities of a remote workforce. Zoom would become known to everyone in America and as the months passed with businesses and workers being forced to learn how to work remotely, it became readily apparent this trend could be sustainable beyond the lockdown. The pandemic of course did add some supply issues that had not been occurring for years. Many sellers due to virus transmission concerns, even with precautions, wanted to wait until a later time to list their homes and have possible buyers in their home.
While this supply and demand storm for real estate in Charleston has been brewing for years, the pandemic has really created the perfect storm with vast effects for both buyers and sellers. The best way to get through this time is to have an expert navigator. With unparalleled knowledge of the area and expertise in navigating the local market, our agents have been diligent in helping buyers and sellers during this unprecedented time of supply and demand. If you’re thinking of buying or selling, contact a William Means agent today.