Keller Williams Realty
https://www.buyhomesincharleston.com/blog/is-charleston-sc-real-estate-overpriced.html

Is Residential Real Estate Overpriced in Charleston, SC?

Posted By: Alan Donald In: Alans Listings
Date: Fri, May 29th 2015 11:34 am

Is Residential Real Estate Overpriced in Charleston, SC?

Recently there has been a lot of talk about the Charleston SC real estate market being "overheated" and "over-priced", similar to the "bubble" that burst in 2006-07.

I beg to disagree, I believe our residential prices are actually under-priced, and that there is no bubble, for several reasons.

1) Credit is still difficult to get. In 2004-05 credit was readily available for everyone including "risky" borrowers who could borrow 100% of the purchase price with minimal checks (stated income, no-doc loans). Today, lenders are still pretty conservative, requiring higher down payment and much more thorough due diligence.

2) Our median home price is well below the 5% trend line that this area has followed since 1991 (while it was above the trend line for the period 2000-2008). See graph. 

3) Our demand is being driven by people moving to this area because of job creation (Boeing, Volvo, Google, BenefitFocus), and baby boomers retiring from up North (hitting 65 at a rate of 10,000 per day). This is much more permanent and sustainable that the speculative fever that drove demand up in 2003-07. While new construction builders are feverishly building new homes, they are not even keeping up with the demand, and inventory is still shrinking in most areas of the city. 

4) If we compare our average home prices with most other beachfront communities in the U.S., Charleston's prices are one of the cheapest.

My crystal ball tells me that, barring any unusual economic/political event, we still have many years to go with strong price appreciation!