It’s a great time to try to sell a house in the Charleston area. It’s not such a great time to try to buy one. And good luck paying the rent in the meantime.
“For January, 1,112 residential properties changed hands throughout the region at a median price of $258,000 — up $19,000, or 8 percent, from a year ago,” reported The Post and Courier on Monday. That comes off last year’s record for home sales.
Suffice it to say that most Charleston- area residents didn’t get $19,000 raises last year. And with high demand meeting a limited supply, prices are only going to continue to rise.
The good news is that home sales and increasing property values reflect a strong and growing local economy. The Charleston area is attracting new residents with good jobs and a high quality of life. And homeowners are seeing the value of their investments increase.
The bad news is that higher home values are pricing a lot of existing residents out of the places they work, adding to traffic congestion, parking problems and a variety of other negative impacts. With prices rising by as much as three times the rate of incomes, the problem is likely to get worse.
And unfortunately renting isn’t much of an effective alternative. Rents are skyrocketing as well — rising about twice as quickly as area incomes, according to a Post and Courier analysis in November.
It’s not just the Charleston region either. Home values increased last year in 92 percent of the 177 metro areas tracked by the National Association of Realtors. Eighteen regions set new records. The available inventory of homes dropped by more than 10 percent nationwide.
Eventually, that’s going to take a toll on the economy as people spend more and more on rent or a mortgage and have less to spend on other essentials or are forced to take on more debt. Solutions, however, are likely to prove challenging.
The most obvious response would be to build new housing, and a lot of it, at lots of different price points. But that’s a tough sell in the Charleston area, where more homes have almost always translated to more congestion and other headaches.
In fact, James Island recently ended a six-month moratorium on new apartment developments, Johns Island residents recently pushed for their own moratorium and Mount Pleasant is in the midst of a two-year pause.
But more housing doesn’t have to mean more traffic. Putting more homes and apartments in the right places could actually improve mobility in the region.
City of Charleston voters took a step in that direction in November, when they approved a $20 million bond issue to build and renovate affordable housing on the peninsula. City officials must make it a priority to turn that money into the maximum number of high-quality units as quickly as possible.
Still, it won’t be enough.
The entire region needs to cooperate to make needed infrastructure and transit investments, plan for modest increases in density in suitable areas and build for livability and affordability. Otherwise, the Charleston area will be left with a lot of expensive houses entirely out of reach for the people who live and work here.