The pandemic proved dangerous for the housing market last spring, but it boosted home sales to record highs throughout South Carolina for the rest of 2020 and is expected to fuel strong demand in the new year.
For the first time, the number of residential real estate transactions has surpassed 100,000 in the state of Palmetto, highlighting the rush to profit from minimal mortgage interest rates and pushing a wave of newcomers to escape the blockade of urban centers in other states where the coronavirus has spread.
For the entire year 2020, buyers closed at 101,500 home sales, up 2.4 percent in a challenging year for some other sectors of the economy.
“This is the largest on record for South Carolina,” said Nick Kremydas, CEO of the SC Realtors Association.
The Columbia-based trading group said in its annual report that “the 2020 market has proven to be incredibly resilient”.
The side effect of the sales boom is the scarcity of homes available across the state.
The housing stock plummeted nearly 37% last year, to less than 17,000 properties on the market in South Carolina. For comparison, nearly five years ago, nearly twice that amount was listed for sale.
Strict demand and housing shortages have forced prices to follow one of the oldest principles of the economy.
Low supply and high demand raised the average home price in South Carolina last year by 12.1% to $ 245,000. That is more than $ 50,000 more than four years ago.
All major metropolitan areas in the state reported higher sales last year than in 2019.
The high-growth area of Charleston had the healthiest share of home sales last year, with almost 22,000, an increase of 17% over 2019. The four counties region accounted for 22% of all transactions across the state .
The Myrtle Beach area reported the second highest number of home sales, almost 17,500, almost 13% more than the previous year.
The Greenville region lagged behind with 16,000 sales, an increase of 10%, while the Columbia area showed almost 15,000 transactions, an increase of 5.5%.
The three-county area called Piedmont and centered on Rock Hill, south of Charlotte, saw another 8,000 home sales, 5.3% more.
Hilton Head continued to lead the state in the cost of a home with an average price of $ 367,250, an increase of 13% over the previous year. Charleston followed with an average price of $ 300,000, 8% higher than in 2019. The Rock Hill region was not far behind, reporting an average price of $ 295,000 for a home last year, an increase of 8.5% .
More than a third of all sales last year were properties with four or more bedrooms. The segment represented the highest growth in closings of 8.5%, ending the year with 36,542 units sold.
“As we look at 2021, signs suggest that buyer demand will remain high and tight inventory will continue to invite multiple offers and higher prices across much of the housing stock,” said SC Realtors.
Mortgage interest rates remain low, decreasing slightly from last week on Thursday. The interest rate on a 30-year fixed rate loan averaged 2.73%, down from 3.51% a year ago, according to mortgage lender Freddie Mac. The fixed rate on a mortgage 15 years was an average of 2.2%.
Low interest rates are expected to persist, helping buyers offset some of the price hikes and motivating others to curb lower housing costs through long-term refinancing.
“These factors will provide favorable winds for the housing market in the new year,” said SC Realtors.
Reach Warren L. Wise at 843-937-5524. Follow him on Twitter @warrenlancewise.