It’s a great time to sell a home in Charleston. Buying one? Not so much.
Average home prices in the Charleston area rose 6.5 percent in 2015, an even faster pace than the 4.9 percent growth in 2014, according to the Charleston Trident Association of Realtors.
That hasn’t slowed down sales, however. The number of homes changing hands last year was up more than 13 percent.
In a lot of ways, that’s good news. It signals a strong economy in the area, with job growth and new manufacturing and tech industries pulling lots of new residents into the area and paying them good wages.
Indeed, the jobless rate in the metro area is lower than almost anywhere else in the state, and personal income rose more than 4 percent for South Carolinians last year.
The problem, however, is that the 4 percent increase in income is lower than the 6.5 percent increase in home prices. And without a huge increase in construction, the situation isn’t likely to get better in the near future.
Rental property availability is also well below demand, according to economist Stephen Slifer, who spoke at a recent event hosted by the Charleston Trident Association of Realtors.
A majority of renters in the tri-county area pay more than 30 percent of household income on rent, meaning that they exceed the acceptable level recommended by the U.S. Department of Housing and Urban Development. In Charleston County, the rate is 57 percent.
That’s a troubling economic trend — if renters are spending too much of their income on housing, they will have less to contribute to local businesses or save for the future. And high and rising home prices make it tough for cash-strapped renters to make the jump to homeownership.
Demand isn’t likely to let up anytime soon, of course. So the supply will have to increase or the Charleston area risks becoming unaffordable for many of its residents.
That means smart planning, carefully located pockets of increased density and a significant investment in improving the infrastructure necessary to handle sustained population growth.
It’s great that a lot of people want to live in the Charleston area, and it’s great that the local economy is strong enough to support those residents — new and old.
But if regional leaders don’t take action soon, it’s going to get a lot harder for some in the Charleston area to pay for a place to call home.