Charleston-area homebuyers shelled out nearly $54,000 more for a house in April than they did a year ago as demand continues to outstrip supply and lumber prices continue to skyrocket.
The median price last month rose to $343,796, up nearly 19 percent from a year earlier, according to preliminary data released May 10 by the Charleston Trident Association of Realtors.
While high demand amid a scarcity of homes is driving up prices, the cost of wood is adding more pressure, having soared 384 percent over the past 12 months.
Lumber prices on May 10 settled at $1,601 per 1,000 board feet, adding $36,000 to the price of a single-family home since last year in April, according to the National Association of Home Builders.
The higher prices have not dented sales.
Residential transactions throughout the four-county Charleston market climbed nearly 48 percent in April from a year earlier, when COVID-19 nearly locked down the economy and temporarily cut into sales.
Last month, 2,148 homes sold in the housing market while a record-low 1,490 houses were listed as "active" for sale at the end of April on the CHS Regional MLS, the Lowcountry's multiple listing service.
The total number of listings for the month climbed a bit to 2,495, up by 46 from March, but inventory hasn't kept up with the pace of buying. Homes are selling the same day they're listed in some cases, and some are changing hands in off-market transactions, often above the asking price.
The percentage volume of sales was somewhat skewed in April because of last year's pandemic when sellers came under under stay-at-home orders and retreated from the market. Compared to April 2019, homes sales last month were up 34 percent.
During the first four months of the year, volume rose 32 percent to 7,437 sales, with the median price jumping 15 percent to $333,765.
"The market has never been busier," said Rusty Hughes, president of the Charleston Trident Association of Realtors. "Inventory remains historically low, but we are seeing an increase of more homes come onto the market as new listings. The challenge is that they don’t last long."
Hughes pointed out that the market's busiest season is still ahead, and more inventory is needed.
"This summer will bring tourists and visitors from all over the world and many of them will fall in love with the Charleston lifestyle," he said. "This will drive demand up further."
Boosting homebuying as well is the cheap price of borrowing.
Home loan financier Freddie Mac's most recent report showed the average rate on a 30-year, fixed-rate loan dipped slightly to 2.96 percent, down from 3.26 percent a year ago. The average rate on a 15-year mortgage edged down to 2.30 percent. One year ago it was 2.73 percent.
"The combination of low and stable rates, coupled with an improving economy, is good for homebuyers," said Sam Khater, Freddie Mac's chief economist. "It's also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow."
Low mortgage rates are expected to continue to drive the high rate of home purchases into the fall, according to Frank Martell, president of property information service CoreLogic.
While the cost to borrow money remains cheap, housing prices continue to increase. CoreLogic predicts prices will rise 3.5 percent nationally by March 2022.
First-time homebuyers are being pinched hardest by the housing shortage.
"Lower-priced homes are in big demand and short supply, driving up prices faster compared to their more expensive counterparts," said Frank Nothaft, chief economist for CoreLogic.
The local Realtors group adjusted its home sales total slightly higher for March to 2,183 transactions. The median price was unchanged at $337,073.