Charleston SC Real Estate Market: A Look Into The Future
I am continuing to look at the latest national data for real estate to see how the market is doing, and how it impacts the Charleston SC real estate market.
Today, I am looking at the most recent Home Price Expectation Survey to see what’s in store for the real estate market.
This Survey is done every quarter, and polls a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists.
By no means are the results fool proof–however, this panel is comprised of the top “in the know” industry experts, and each Survey’s projections are updated with the latest information and data.
Here’s a look at the projected yearly appreciation for housing over the next few years:
This is the mean projection–exactly the middle of all projections.
That is, half of the projections are higher, and half are lower–this is exactly the middle (more on this in a minute).
Here is a quick look at the projections from last year’s first quarter survey:
I posted this graph for two reasons.
First, you can see how the panel adjusts their projections survey to survey.
Also, we can now look at the appreciation for 2014 now that it is in hindsight and see how well the experts called it.
Below is a look at the year over year rate of appreciation broken down monthly in 2014:
2014 started off like gang busters before settling down.
As I’ve said before, if you get your real estate news from the media, then chances are you got the impression that the market was going bad.
After all, appreciation was down, right?
What happened in 2014 was a good thing. Look at the graph again–this is all positive appreciation. Home values continued to go up throughout the year.
What declined was the rate of appreciation. Homes still appreciated last year, just at a slower rate. This is a good thing, a sign that the market is settling into a more healthy, stable rate of growth.
By the looks of that graph, last year’s projections were a little conservative. The average rate of appreciation for 2014 was 8%.
Which brings up the second point–the range of projections from the survey. Keep in mind these are the mean projections, here is a breakdown of all of the cumulative projections from the latest survey:
The mean cumulative appreciation projection through 2019 is 19.3%.
The most optimistic projections think we will see appreciation of 27.5% over the next 4 years.
The most pessimistic projections have that at 11.7%.
Keep in mind that these are leading experts in the industry, and even the most pessimistic ones still see home values increasing in the double digits over the next 4 years.
To help put that in perspective, here is a look back at the historical rates of appreciation:
Prior to the housing bubble in the early 2000’s, real estate appreciated at an average annual rate of 3.6% (this is from 1987 to 1999, but is pretty much the historical average over 100 years).
Leading up to the crash, we saw appreciation of 7% annually.
Since the crash, we have seen an annual appreciation rate of 5.8%.
So, we are ahead of the historical norm, but it looks like the market is correcting itself back to a more normal historical average.
So, what do things look like in our backyard?
First, here is a look at the year-over-year appreciation broken down by state:
South Carolina saw homes appreciate by 6% in 2014.
Charleston has been a fairly hot market over the years, and that certainly continues to be the case.
Mt Pleasant was named the 9th fastest growing city in the entire US last year by the US Census.
South Carolina remains a popular choice for people to move to.
Here is a quick look at states with the most inbound moves, according to the United Van Lines 2014 National Movers Study:
South Carolina ranked second on this survey.
So, we already knew that lots of people were moving to the Charleston area, so what kind of impact did that have on our market?
Here is a look at home values for the entire Charleston MLS for 2014–this includes new construction and existing homes, as well as all housing types (condos, townhomes, and single family homes).
You can see the monthly breakdown of Average Sales Price going back a couple years. Here is another look at the Average Sales Price broken down in 12 month increments (from February to February):
Overall, the greater Charleston SC market was up 6.2% over 2014.
As far as the impact on both buyers and sellers, I covered a lot of that in my most recent posts. No need to repeat it and risk beating a dead horse. Home buyers can read more here, and sellers can read more here.
You can also hit me up if you would like numbers more specific to your area of town or even in your neighborhood.
Overall, the outlook for real estate for the next couple years is pretty good. No one has a crystal ball, but the Home Price Expectation Survey is a great resource, along with other resources, to monitor the market.
In many ways the Charleston real estate market closely resembles the national market–home sales are doing well, values continue to rise, and there is a shortage of available inventory.
Stay tuned to this blog to get the latest data and analysis about what is going on in real estate–both nationally and locally.
In the meantime, if you are thinking of buying or selling in the greater Charleston SC area, then bee sure to visit my Pam Marshall Realtor website.