As we head into fall, things are getting a little dicey. With interest rates on the rise and the cost of living going up, you can just feel the tense mood in the collective conscience. Many potential homeowners have come to me asking what the fall and holiday markets are likely to look like. They want to know whether it is still a good time to list for sale or if they should consider staying put to see what the new year holds. Although I don’t have a crystal ball, my decade's worth of experience as a realtor in Summerville does lend me some perspective about what will most likely happen.
The Good News, The Bad News
The good news is that as of August 2022, home prices in South Carolina were up an average of 13.2% compared to the home prices of the previous year. That means the median price was over $350k. The not-so-good news is that in the same month, the number of homes sold went down nearly 13% from year to year. The average number of days on the market, however, was nearly the same, with just one more day this year than at the same time last year.
What About Inventory?
One of the biggest driving factors of competition being fierce and making it a seller’s market over the past several years has been the continual lack of inventory for potential buyers. In August of 2022, the number of homes for sale was down by almost 4% from last year and the number of homes listed was down a total of 12%. The average months of supply, however, remained unchanged from 2021 to 2022.
What About Housing Demand?
Statistics show that this year, nearly 28% of listed homes in South Carolina were sold below list price, which is down significantly, 11 points from last year. 28% of homes had to drop their price, which was an increase of 11% from last year. Overall, the sale-to-list price held at 99%, which means that although homes might not be as competitive as they were this time last year, competition is still holding strong.
There is an uneasiness in the air about rising mortgage rates. With rates approaching near 7%, when they were about half just a year ago, it is going to become harder and more expensive to get money, which will push many potential homebuyers into a different price bracket. Over the last six weeks, the average monthly mortgage payment has soared up $337 monthly, which is up 15% to a new high of $2,547. When you combine that with the cost of living on the rise, many households will be cutting back and necessarily being more conservative.
What is Common Sense Advice?
As I said, there is no way to determine what the market will do; we can only hypothesize, watch trends, and use our professional experience as a guide. If interest rates continue to climb even higher, there will necessarily be a slowdown in the market because people will have a hard time qualifying and an even harder time considering taking on a bigger mortgage due to economic conditions. And as the inventory drops, that means less competition for sellers, more days sitting on the market, and probably either holding prices or falling ones.
So, Is It Time to List and Buy a Home?
Although everyone’s situation and circumstances differ, if you are outgrowing your home, looking to relocate, and have the means, then economic conditions should not determine your choice. The good news appears to be that house prices are holding strong. Even if the market slows, it is not likely that inventory will increase that much, which means that there will still be competition in the market driving prices. The slowdown might mean less movement, but it will likely not have an effect, at least in the short term, on home prices.
There is never an ideal time to buy and sell a home. It is a life-altering change that cannot ever be strictly determined by the price. Sure, you might have been able to cash in on your home if you sold one in the past two years, but you would have then paid more for your current one. In real estate, sometimes it is all relative. I can’t tell you whether you should buy or sell right now. I can only tell you to consider all things and take from the advice of the seasoned professionals at Sea Turtle Properties. Contact us today and let’s discuss what works best for you and your family!