Charleston home price nearly doubles in 10 years as sales fall for 25th consecutive month

Charleston-area home sales slipped for a 25th consecutive month in September as low inventory, rising interest rates and higher prices cut into demand.

The median cost of a house — $415,000 — is now nearly twice as much as 10 years ago.

Residential real estate transactions dipped 12 percent last month in Berkeley, Charleston, Colleton and Dorchester counties, according to preliminary data released Oct. 10 by the Charleston Trident Association of Realtors.

In September, 1,354 homes changed hands as the median price rose 3.5 percent from a year ago.

That’s the lowest number of closings for the month in five years when 1,244 sales were recorded in September 2018 as Hurricane Florence affected business activity. Measured against a September without a hurricane, home sales approached a level last seen nine years ago, when 1,315 transactions were recorded.

The downward spiral in home sales started in September 2021.

The price is now $130,000 more than in September 2019, the year the association uses for comparison of sales prices and transactions because it preceded the pandemic-induced surge in purchases. Home sales were down by 52, or 3.7 percent, last month from September 2019.

For the year, the region has recorded 13,067 sales, down 18.2 percent from the first nine months a year ago. The tally is also off by 1,214, or 8.5 percent, from 2019.

Higher mortgage interest rates, elevated prices and a dearth of available homes are causing sales to sag, though the percentage decrease in transactions was not as pronounced as in previous months, according to the Charleston Realtors group.

“This is a challenging market for most buyers, but particularly first-timers, as borrowing costs and sales prices continue to rise,” said Katesha Breland, president of the Charleston Trident Association of Realtors. “Potential buyers have become increasingly sensitive to even slight fluctuations in mortgage rates, which have remained above 7 percent since mid-August.”

Inventory levels remain well below the 9,000 needed for what the local industry considers a balanced supply. Last month, 2,896 homes were classified as “active” listings by the CHS Regional MLS. That’s 11 percent lower than September a year ago and marks the fifth straight month this year the number of available residences has declined.

Homes in the Charleston region are selling after an average of 32 days on the market, 10 days longer than in September 2022. By comparison, it took 53 days for a house to sell during the same month in 2019.

For prospective homebuyers, the cost of borrowing keeps climbing.

“Prices have continued to increase this fall despite softening home sales nationwide, as a lack of inventory has kept the market competitive for prospective buyers,” the association said in its monthly report.

Home loan financier Freddie Mac reported the average rate on a 30-year, fixed-rate home loan surged Oct. 5 to 7.49 percent, while the 15-year note rose to 6.78 percent. A year ago, interest rates averaged 6.66 percent and 5.90 percent, respectively.

Sam Khater, Freddie Mac’s chief economist, attributed the steady rise to shifting inflation data, a strong job market and uncertainty about the Federal Reserve’s next move to try to cool the overheated economy.

“Unsurprisingly, this is pulling back homebuyer demand,” he said.

The Charleston Trident Association of Realtors also adjusted its August figures higher based on new information to show 1,601 sales. The median price of $400,000 was unchanged.