Experts: Charleston real estate market may be headed for shortage as home prices surge
Photo Source: MGN/Tony Magpantay
CHARLESTON COUNTY, SC (WCSC) -
Potential home buyers in Charleston better act fast. With dozens of people moving the Lowcountry every single day, real estate experts say we're heading towards a housing shortage.
According to the Trident Association of Realtors, if no one in the Charleston area put their home on the market for the next three to five months, there would be no more homes left to buy.
Many people are already struggling to find a house to purchase.
"You feel like you have to make a really quick decision or you're going to lose that property," said Karey Brem.
Karey Brem is trying to find her parents a home to buy in Mount Pleasant. I caught up with her scouting out one of her favorite neighborhoods, Belle Hall.
"The market is a lot tougher now, there's not that many options and you have to be prepared to pay full price," said Brem.
Brem has been looking for the right home for several months. She hasn't put an offer down yet, in part because she hasn't acted fast enough.
"Any property that is desirable, they're usually a lot of competition," said Nathan Buttrick, Charleston real estate agent.
Brem's broker Nathan Buttrick said buyers are learning that they've either got to raise their offers or lower their expectations.
"The homes aren't necessarily staged to sell, it's kind of take it or leave it - this is what it looks like," said Brem.
She said there's been several homes they were interested in, but she was turned off by their condition. Some homes she's seen have needed major renovations, but are still going at asking price.
President of the Trident Association of Realtors, Michael Sally, says their 2015 housing report found 8,591 homes were sold in Charleston County last year. Of those, 96 percent of sellers got what they asked for, or more.
"You'll put a home on the market and within days you'll have multiple offers, above asking price," said Michael Sally.
Some of that growth is thanks to companies like Boeing, Mercedes, Google and Volvo making a home here. Charleston has also earned a reputation as a top travel destination and top small city in the U.S., for the last five years.
"We have real growth in Charleston and that's what supporting the home values here," said Buttrick.
Our population is growing fast and according to the Charleston Housing Authority, we will reach one million residents by 2027.
"With so many people coming to the area, people are willing to pay more than asking price," said Sally.
Sally said hot spots to buy a home right now are Mount Pleasant, West Ashley, James and Johns Islands.
The city of Charleston considers "affordable" living to be a monthly mortgage payment that's less than 30 percent of your monthly income.
The median income for a family in Charleston is $66,000 a year. So, if you do the math, the typical family in Charleston can only afford homes under $159,000.
Sally says that in 2015, the median sale price for a home in the Charleston area shot up 6.5 percent from 2014 to $229,000.
"We're talking about people, who work in every day jobs, that cant afford homes," said Sally.
Arthur Lawrence is a life long resident of Charleston and owns a home on Fishbourne Street in Downtown Charleston. He's been shocked to see how much homes in his neighborhood are selling for and worries that it's edging out a diversity of neighbors.
"It's out of reach of the ordinary working person and the people that really take care of the city," said Arthur Lawrence. "A house just sold a couple of houses from where I live for $436,000. So, who can afford that whose lived here for years? They can't!"
Housing affordability has become such a concern that there's been several public forums recently where local and national housing experts have addressed what's happening in Charleston.
Just this week, Charleston's new mayor John Tecklenburg talked about the sky rocketing home prices and limited availability to a packed house of residents and city leaders.
"It's a challenge that's almost at a crisis point," said John Tecklenburg, Mayor of Charleston.
"In some niche markets in Charleston, we've had over a 30 percent increase in sales, in the last two years, and that sustainability cannot continue to happen," said Sally.
So what will happen?
"There's no way of knowing if we're experiencing a bubble right now," said Buttrick.
One thing is for sure.
"We're currently, starting to head towards a housing shortage," said Sally.
Sally believes the only solution is to build more developments to even out supply and demand.
Right now, the City of Charleston and Town of Mount Pleasant have temporary building bans in place, but only for new apartment complexes. That is another form of housing that's in high demand in Charleston.
This housing shortage is causing a ripple effect on rentals in Charleston. Young families and professionals who can't afford these competitive home prices are forced to rent for longer. It's causing the same supply and demand issue to occur in short term rental housing.
"Some of the municipalities need to lift their moratoriums on building," said Sally.
Not all professionals in the real estate industry believe that's the fix.
"I don't necessarily agree with that because the reality is the infrastructures just not there to support all of that development," said Buttrick.
New and more affordable homes and rentals continue to be built further inland, in Dorchester and Berkeley counties, to accommodate the needs of people who are finding that Charleston County is too expensive for buying or renting.
people are coming to Charleston, people are going to be moving here we can't shut the gate behind us," said Sally.
If you're in the market for a new home, here are some tips for potential buyers:
-Get personal with your offer. With many homes getting multiple offers within the first day on the market, you've got to set yourself apart. Some buyers have been attaching hand written notes to their offers, explaining who they are and why they want the home. Sometimes it can be emotional for sellers to let go of a home and the personal touch helps. -Talk to neighbors in the area you're interested in. They might be able to tip you off to a house not yet on the market so that you can check it out ahead of time, directly through the homeowner. -Be prepared to put in an offer in the day a house goes on the market. Get your finances in order.