Housing market in SC sees summer sales plunge. Here’s why and where it’s happening fastest

Patrick McCreless
Getty

South Carolina home sales dropped by double digits in August like they have all summer, a sign of a cooling market as consumers focus their spending elsewhere.

Home sales dropped by 11% in August year over year, the latest South Carolina Realtors statistics show. It’s part of a downward summer trend following a hot housing market year, as prices continue to skyrocket and consumers shift their spending habits back to pre-pandemic purchasing patterns, some industry experts say.

Joey Von Nessen, research economist at Moore School of Business at University of South Carolina, said the strong growth rates that the housing market experienced in 2020 and 2021 were unsustainable.

“They were the result of temporary changes in consumer preferences as well as several major fiscal stimulus packages that temporarily boosted total consumer spending,” Von Nessen said. “In 2022, the housing market is beginning to readjust to pre-pandemic norms as these temporary factors wear off and sales activity declines to levels more consistent with what we saw in the latter part of the last decade — the latest housing data from August reflects this ongoing trend.”

The Charleston Trident market saw the biggest August sales decline at 24.7% year over year, statistics show. The greater Columbia market had an 11% sales drop over the same time frame.

Here’s how much sales have dropped in SC each month this summer, year over year.

  • June: 13.5%

  • July: 17%

  • August: 11.1%

“Inflation, higher interest rates and fears of a potential recession have taken a toll on buyers and sellers this summer, leading many people to stay on the sidelines to see what will happen with the market,” a recent Central Carolina Realtors Association report states.

Von Nessen also said housing affordability and mortgage interest rates have reduced demand.

“Mortgage interest rates, which have doubled in 2022, are rising in response to the Federal Reserve’s ongoing aggressive rate hikes to combat inflation,” he said. “And although the rate of house price increases has tapered in some markets, there is still upward price pressure due to lack of inventory.”

The median home price in South Carolina was up up 13.4% in August year over year, statistics show.

Meanwhile, consumers have shifted their purchasing activity toward the service sector, Von Nessen added.

“Rather than purchasing goods such as appliances, vehicles or a new home, consumers are more likely to be traveling, eating out, or spending their income on other in-person services,” he said. “This shift reflects a movement back towards pre-pandemic spending patterns after consumers had previously spent more on goods (including housing) and less on in-person services while they were socially distanced in 2020 and 2021.”

The Realtors Association report notes, however, that the worst of inflation might be over and the market could improve in the coming months.

“Although sales prices remain up from this time last year, price growth is expected to moderate in the months ahead as the market continues to shift in a more buyer-friendly direction,” the report states.

Von Nessen cautioned though that a downturn in employment could reduce demand on housing even more.

“Job growth is the single best predictor of housing market activity,” he said.

Here is a list of the change in August home sales for all South Carolina markets, year over year.

  • Aiken: - 15%

  • Beaufort: -18.5%

  • Central Carolina: +18.9%

  • Charleston Trident: -24.7%

  • Cherokee County: 0%

  • Coastal Carolinas: -8.5%

  • Greater Augusta: -13.1%

  • Greater Columbia: -11%

  • Greater Greenville: +0.5%

  • Greenwood: +1%

  • Hilton Head area: -14%

  • Pee Dee: -7.6%

  • Piedmont Regional: -19.3%

  • Spartanburg: -1.5%

  • Sumter/Clarendon County: +8.4%

  • Western Upstate: -2.8%

Advertisement