Home prices in SC spiked in 2022 but these 5 places had it the worst. Will costs fall in 2023?

By Corruption Buzz On Jan 19, 2023

South Carolina home prices jumped by double digits in 2022 year over year, but some relief could be in sight.

The state’s housing market, while hot at the start of 2022 like it was during 2021, slowed in sales and price hikes in the later part of the year, the South Carolina Realtors’ annual housing market report states. Depending on inflation and mortgage rates, that slowing trend in prices could continue in 2023, the report adds. Meanwhile, some industry experts say the U.S. overall will see home prices in 2023 fall year over year for the first time in a decade.

According to the annual report, the South Carolina overall median sales price increased 15.4% to $315,000 in 2022, year over year. The price was also a 57.5% jump from 2018.

Here are the top five housing markets in South Carolina that saw the biggest jumps in median sales prices in 2022.

Coastal Carolinas: 23.5%
Beaufort: 18.4%
Hilton Head: 18.3%
CMLS: 16.1%
Piedmont: 15.8%

While the jump in median price was significant, the rate of increase slowed during the course of 2022, the report states. The year of 2022 began like 2021 ended, with mortgage rates near historic lows and homes selling quickly after multiple offers, due to pent up demand and insufficient housing supply.

“But all that changed a few months later as mortgage rates began to rise, adding hundreds of dollars to monthly mortgage payments and causing housing affordability to plummet to its lowest level in decades,” the report states. “As borrowing costs continued to increase, home sales and home prices began to slow.”

The report states that, looking ahead in 2023, whether prices drop will depend on inflation, mortgage interest rates and the overall state of the economy. However, some areas of the U.S. that remain relatively affordable and in high demand could still see some price growth, the report adds.

According to economists at online real estate brokerage Redfin, U.S. home prices in 2023 will see their first year-over-year drop in a decade.

“We expect the median U.S. home-sale price to drop by roughly 4% — the first annual drop since 2012 — to $368,000 in 2023,” Redfin states. “That’s due to elevated rates and final sale prices starting to reflect homes that went under contract in late 2022. We expect new listings to continue declining through most of next year, keeping total inventory near historic lows and preventing prices from plummeting.”

Joey Von Nessen, research economist at the Darla Moore School of Business at the University of South Carolina, said he did not expect South Carolina home prices to drop in 2023.

“I think we’ll more likely see pullback in the rate of growth,” Von Nessen said of South Carolina home prices. “Prices are not likely to go down, but the rate of increase will slow.”

He noted that like some other parts of the U.S., South Carolina continues to see strong demand for housing despite rising prices … “largely driven by population growth.”

The Palmetto State’s population grew by 1.7% to a total of more than 5.28 million as of July 1, 2022, according to the latest U.S. Census data. Only the states of Florida at 1.9% and Idaho at 1.8% had faster growth by percentage.

Redfin also predicts that U.S. mortgage rates will decline in 2023 to below 6% by the end of the year.

“The Fed’s series of interest rate hikes should cause inflation to continue slowing, which is likely to bring mortgage rates down,” Redfin states. “If inflation cools faster than expected and the job market moderates, rates may decline sooner and/or more, dropping to 6% in the beginning of the year, then settling around 5.8% for the rest of the year.”

Here is how much the median sales price increased by percentage for every housing market in South Carolina in 2022, along with the overall median sales price for homes by the end of the year.