NEW BUSINESSES AND POPULATION GROWTH TO IMPACT REAL ESTATE IN 2023
Affordability for homebuyers continues to be a stumbling block for closing on a dream house or any house that comes close to their dream in the Lowcountry.
Home mortgage rates climbed for the third time this year through September and nudged over the 6 percent mark for the first time since 2008.
Existing home sales declined for the seventh consecutive month. Look no further for cause/effect than monthly mortgage payments jumping 55 percent from a year ago.
The good news — kind of — is that the median home price rose 15 percent from last September to $453,060. That’s good news for sellers, not so good news for potential buyers.
“Coming off the record-breaking sales of the last three years, the market has shown signs of returning to a more consistent market,” said Cynthia Creamer, president of the South Carolina Realtors organization. “Properties that are ‘move-in ready’ are most desirable and move quickly off the market.”
Home prices are high, mortgage rates are high, sales are down and inventory is rising.
What’s it all mean?
“Rising consumer prices and higher mortgage interest rates will cool the real estate market across the country,” the former president of the Hilton Head Area Association of Realtors said. “What is different in our region is approximately 40-50 percent of the sales are consistently cash buyers. The concern is the affordability for the first-time buyer and those who desire or need to move up to a larger home.”
Here’s the current market for median home sales, as of September, according to the Hilton Head Area of Realtors:
- Regional Market: $453,060, +15 percent from September 2021, closed sales 459. -13.1%.
- Hilton Head Island detached: $925,000, +24.4%; closed sales 71, -28.3%.
- Hilton Head Island condos/villas: $408,000, +4.2 percent; closed sales 85, -12.0%.
- Bluffton: $452,500, +22.3%; closed sales 201, -14.5%.
- Hardeeville: $330,101, -4.5%; closed sales 43, +26.5%
“Properties are staying on the market longer than what was experienced at the beginning of 2022 and multiple offers have decreased,” she said, which accounts to rising inventory and longer days on the market.
Days on market rose to 125 days recently, up 37.4 percent from last year. Homes for sale stand at 938, up 25.7 percent over last year.
“While inventory has begun to inch up, it is not bringing us closer to a desired six-month inventory,” Creamer said. “Supply continues to be low, but demand from buyers has shifted the last half of this year. Sellers will need to assess their goals and urgency as we see the market stabilize.
“Businesses are expanding, and new businesses are locating to Bluffton and Hardeeville. New developments add to the available inventory. Real estate is circular, the last few years were not sustainable. Therefore, given the current economy, we anticipate the market to stabilize.”
With new businesses making the Lowcountry home, supply of inventory rose 63.6 percent over September 2021 to 1.8 percent.
Earlier this year the U.S. Census Bureau said Bluffton was No. 1 and Hardeeville No. 8 among the fastest-growing cities based on population. Hardeeville saw a 14.3 percent increase and Bluffton’s was up 12 percent.
Along with new and expanding businesses in the Hilton Head area come new residents and a growing population.
“We are fortunate to live in an area that is highly desirable,” said Creamer of Dunes Real Estate. “Hilton Head Island was just named “America’s favorite island” by Conde Nast for the sixth year in a row. It is our tourists who fall in love with the area who become our next residents.”
As the market continues to stabilize, what’s ahead in 2023?
“The median sales price in our region is $480,000, up 20 percent year to date,” she said. “We anticipate the market to return to a more steady and realistic growth in 2023. What that will be remains to be seen, as there are many factors, including the economy, interest rates and demand that impact price.”