Climbing home prices didn't hurt Charleston-area home sales in May, but a lack of inventory nipped into closings and left transactions flat.
Residential real estate transactions slipped 0.1 percent last month from a year earlier, according to preliminary data Monday from the Charleston Trident Association of Realtors.
"The slower start to the summer buying season is likely a result of the ongoing lack of inventory in our market," said Wil Riley, CEO of the trade group. "We have plenty of buyers, eager and ready to buy, but the market is being held back because there are simply not enough homes for sale in accessible and affordable price ranges to satisfy the demand.”
Riley hopes for an uptick in inventory over the summer, but he said the market will likely remain "incredibly competitive" for buyers.
Last month, 1,811 homes changed hands throughout the region at a median price of $273,438 — up $13,538, or 5.2 percent, from a year ago. The number of homes that sold almost matched the volume of 1,813 from May 2017.
The tiny retraction in sales follows a 5.6 percent jump in April.
So far this year, 7,401 homes have sold at a median price of $263,940, up 6.4 percent during the first five months of the year. To put transactions in perspective, last year was a record-breaking year in home sales throughout the region, and so far this year volume is up 1.1 percent for January through May.
The number of homes on the market across the region continues to be low, with 5,244 residential listings as "active" for sale in the Charleston Trident Multiple Listing Service as of May 31. That's down 11.9 percent from the fifth month of last year.
A healthier number of available homes in the region to keep prices in check is about 6,500, according to a previous association president.
Homes are also selling faster. On average, residential listings stayed on the market about 48 days, or about seven weeks, in May. Last year, it took about eight weeks to sell a home during the same month, according to the Realtors group.
While the cost to own a home is on the rise, mortgage rates have been edging up, too, for much of the year. They still remain below 5 percent, but each uptick adds to the borrowing costs for buyers.
Last week, financier Freddie Mac reported average long-term interest rates dipped slightly.
The rate on a 30-year mortgage slipped to 4.54 percent while the rate on a 15-year loan edged down to 4.01 percent.
"Given the fact that gradually rising mortgage rates often infuse urgency to get into a new home before it costs more later, buyers need to remain watchful of new listings and make their offers quickly," the Realtors group said.
With low inventory and high demand, the price of housing is expected to continue to escalate.
Property information service CoreLogic expects home prices nationwide to jump 5.3 percent through next April, contributing to the squeeze on first-time buyers.
“The best antidote for rising home prices is additional supply,” said Frank Nothaft, chief economist for CoreLogic. “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.”
Nationally, home prices jumped 6.9 percent over the past 12 months through April, according to the property information provider.
The local Realtors group also adjusted April's sales figures slightly higher in the region to show 1,632 home transactions at a slightly higher median price of $270,562.