How Inflation is Affecting the Housing Market in Charleston, SC
It’s safe to say no one in the United States is immune to rising inflation rates when living in 2022. Everyone feels the price hikes at the grocery store, buying movie tickets, and beyond. If you are a homeowner in the glorious city of Charleston, South Carolina, you may wonder how inflation affects your local housing market. Look no further for our insights into the changes you are seeing.
The housing market across the U.S. is undergoing a recalibration. What exactly does this mean? The days of crazy buyer wars and huge home sale prices are slowly trickling into a thing of the past. This shifting market is something that everyone is navigating and may be a sign that a recession is coming our way.
Across the country, inflation soared to record highs in 2022. Inflation hit more than a 40-year high in the month of June. Since June, it has slowly been creeping downward but is still elevated and has a long way to go before it reaches what was once considered normal.
How will inflation affect the housing market?
For starters, home prices across the U.S. could go down, making home values decrease slightly. Inflation also affects mortgage rates, which are higher than the record lows we saw during the pandemic. Inflation also could increase the cost of construction for new homes, as materials will likely cost more. All these factors could slow the rate at which homes sell.
More specifically, to Charleston, South Carolina, Redfin shows the market is becoming less competitive (as we stated earlier when generally speaking of the U.S.). Average homes sell for around 2 to 6 percent higher than the list price, depending on the time listed. This is a promising statistic to note.
With shifts in inflation and market recalibration, you can expect home prices to drop from what they were in recent years. Based on data from Charleston County, the housing market in Charleston has shifted to a buyer’s market, meaning more homes are listed than the demand requires. This increase in inventory versus the number of buyers also contributes to the lowered home prices overall.
Job growth in Charleston is consistent and not anticipated to drop, which will help keep the demand for homes high. Because of this steady job growth in the area, Charleston has historically been a stable place to invest in real estate. In fact, over the past ten years, Charleston real estate has offered an average home appreciation of 7.28 percent. This places Charleston in the top 20 percent of all U.S. cities for real estate appreciation.
We hope you better understand how inflation affects the housing market in the United States and, more specifically, in Charleston, South Carolina. Don’t be afraid to make a real estate transaction if you are in the position to. Our dedicated team of Charleston, SC, real estate agents is here to offer you educated guidance and a smooth transaction. Contact us today!