Charleston Housing Market Predictions 2024 South Carolina

Charleston, South Carolina Housing Market Predictions for 2024

In today's market, some home buyers find themselves playing a waiting game when it comes to purchasing a home. The average home price in Charleston, SC has nearly doubled in the last 5 years which raises the question: do buyers make a move now, before prices go up any further, or do they wait for mortgage rates to decline from their recent highs?

Mortgage Rates:

Previously at historic lows after the 2020 covid pandemic, mortgage rates hit nearly 20-year highs, peaking at over 8% in late October 2023, before backing off in the past 30 days or so. While higher rates impact affordability, remember the adage: "date the rate, marry the house." In other words, the focus should be on finding your dream home, not on rates which will fluctuate over time.

Home Prices:

Over the past few years, depsite the rise in home prices and mortgage rates, the Charleston real estate market has seen strong buyer demand and a decline in available home inventory. Because of this inventory imbalance, home prices have continued to remain amazingly stable and even experienced consistent price appreciation. As a result, adopting a "wait and see" approach to house hunting may not be in your best interest and delaying your purchase could result in reduced purchasing power. 

Think about it this way...In 1971, mortgage rates hit 7.33%. If a potential homebuyer waited until rates dropped to buy, they would have had to wait until 1993! However, over that 22-year waiting period the average value of a home quadrupled. 

Let's Talk Numbers:

If you bought a home in 2019 for $400,000, with a 5% down payment, you have experienced significant growth in the value of that property. In fact, that home is most likely currently valued at roughly $600,000+, a gain of $200,000 in just a 5 year period.

Today, you might find yourself thinking that your current home might not fit your needs. Maybe your family has grown and you need more space. Maybe you have changed jobs and have a commute that is costing you both time and money.

When you see that larger home that is closer to work listed for sale at $800,000, remember that with the equity you have accumulated in your current home, you can now afford to put down 20%, or more, on your new purchase. While your new mortgage payment will increase due to the higher loan amount and prevailing interest rates, most experts don't expect rates to remain at these levels. In fact, many anticipate that interest rates will drop below 6% in the next 12-24 months, presenting the opportunity to refinance and reduce your monthly payment.

Additionally, the cost of waiting just two years to buy, assuming a conservative 3% annual increase in home prices, means that the $800,000 home today would appreciate to roughly $850,000 over the next 24 months. Assuming rates drop down to 5.5%, that extra $50,000 in home cost adds $284/month to your mortgage payment.

What Do We Think?

What do we think the Charleston market will do in 2024? No one has a crystal ball, but the stats show that the Fed is beginning to get inflation under control. This should cause interest rate hikes to stop and rates should even begin to come down. Many of the buyer's sitting on the sidelines will flood the market increasing demand and reducing supply, so home prices will continue appreciating. We are still actively buying investment properties and selling lots of homes to first time buyers, move-up buyers, retirees, and investors. Do not let fear keep you from pursuing your dream home!

Are you considering buying and wondering what the cost of waiting to buy a home might be? Give The Peter Kouten Team a call and we can discuss your options.

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