Charleston’s 2020 Real Estate Market – The Good, The Not-So-Bad, and The Ugly COVID-19

Is it still as surreal for you as it is for me??

Heading into March we were experiencing one of the most active years in real estate in quite some time. Not crazy pricing, just lots of people buying because the mortgage rates were (and are) so compelling. In many markets, our inventory levels were so low, buyers and agents were on a desperate hunt to find the right house. Charleston’s economy was booming.  And of course all that changed in one fell swoop.  I personally am using the date of 3/15/2020 to mark when everything became very very different here (the BIG CHANGE).

The Good and the Not-So-Bad

So now that almost 6 weeks have passed since then and we’ve become accustomed to our hunker down, and our new normal (like it or not), I can take a look at the real estate market here and finally, maybe, give you a little bit of insight to help answer your burning real estate questions.

PENDING CONTRACTS – Since closed sales in March reflect two weeks of a fairly normal market, and two weeks of a pandemic market, we can’t really use those numbers to judge activity. So I’ll look at pending contracts instead. Last year in the most recent 6-week timeframe, an average of 415 properties were going under contract weekly. During the Recession in 2009, only 169 properties were going under contract weekly. So let’s look at Charleston’s 2020 real estate market in the midst of a global shut down. In the past 5 weeks, we had an average of 303 contracts weekly (amazing!), but look at the numbers for this week including projections that will include tomorrow. THREE-HUNDRED-SIXTY. Woohoo!

The markets where you see mostly primary home buyers and mostly locals, seem to be down only about 10-15%. Historic Charleston on the other hand is down about 40%, since many of our typical out-of-town buyers are certainly not traveling right now and making offers.

LUXURY MARKETS – While the luxury market has definitely slowed down, 52 Properties over $1,000,000 have gone under contract since 3/15/2020 – a drop of only about 18% compared to last year. 13 of those under contract are Island properties at Kiawah, Seabrook, Folly Beach, Isle of Palms and Sullivans. Can you blame people? The Islands and Beaches are currently closed off to everyone but residents, so the desire to own a home there on our wide open beaches must be intense!

INVENTORY LEVELS – Obviously many people don’t want to put their homes on the market right now for various reasons. Thus, inventory levels have sunk to the lowest we’ve seen in 15 years – down 25-40% compared to last year, when levels were already super low! This is actually a bad thing for buyers. If buyer demand is only down about 15%, but inventory is down more than twice that, what happens to prices?? They can potentially go up.  Having said that, I do believe this situation is only temporary.

For perspectives on our Southern sentiments from Inman “Agents in Southern States Foresee Booming Markets

For a more nationwide perspective, check out this great analysis from RedFin “Homebuying Demand Strengthens Despite Stricter Lending Standards, Inventory Shortage Looms”


The Ugly COVID-19

I know some of you in other parts of the country – particularly those in my beloved former home of New York City – may be reading this fairly positive real estate news in shock. I can only begin to imagine the pains of what you are going through and how it has affected your lives.

I consider myself fortunate to now live in a place where protective action to stave off the virus was taken swiftly since we had the advantage of foresight here. While the state as a whole lagged behind the rest of the East Coast, our Governor did shut down our schools on March 16, and dine-in restaurants on March 18 when our entire state (pop. 5.5M) had only about 19 known cases. Our local islands and beaches prevented access and short-term-rentals beginning March 21. Then Charleston City Mayor Tecklenburg called for a Stay-at-Home order beginning March 26, when we had only around 35 known cases in the City. Today, nearly 6 weeks have passed since the BIG CHANGE, and we have a little over 400 known cases and only 5 deaths in all of Charleston County (pop. 400,000 in 1358 square miles). To give some perspective here, that is only ONE known case per 3.4 square miles and ONE death per 272 square miles. Our hospitals currently have plenty of capacity if needed. I am thankful, grateful, and hopeful we as a City keep up this positive trajectory and of course hold all of you out there in my heart – for good health, for love, and coming out of all this together.


So what does Charleston’s real estate future look like?

I tend to swing from fear to positivity and back again. I think of the tremendous impact this virus and shut down have had on our tourism industry which contributes so much to our economy. Of the impact on our extraordinary restaurants and anything related to hospitality which surely will be the last to recover. Of the impact on all those people who have lost their jobs that may never come back. That makes me sad and wonder just how long this economic devastation will last, and how deep the scars will be….

But then I remember. We, as a Southern coastal culture, are incredibly resilient. This town has been through wars and earthquakes and plagues and fires and floods and hurricanes and job losses and recessions time and time again. And you know what? Through the pain – we still come up shining and sparkling like that sun on our vast blue waters. It may look different. We may have to be innovative. Efforts may have to be redistributed, but we are lively and entrepreneurial and more than anything, we LOVE THIS LIFE IN THE LOWCOUNTRY.  And one of the things that has become very clear to me through all this is the importance of home, of having a sanctuary where you and your family feel safe, of having access to the wide and beautiful great outdoors so you can turn your face to the sun, listen to the birds, and feel the wind whisk your fears and doubts away. We’ve got that in spades here in Charleston. You know it. I know it. And so do millions of others who don’t live here. Perhaps they are daydreaming about what’s next?

So with that, I’ll leave you with a perspective one of my clients, the CEO of a large bank, offered me. In terms of real estate, he believes that housing will bring us out of this Recession this time, rather than creating it. I don’t know about you, but I’ll TAKE IT!!

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