It’s a good time to be selling a luxury home in South Carolina, as sales have been increasing since the start of 2017. In particular, the state’s wealthy residents have been purchasing houses near the coast to serve as their vacation homes.
Although prices have been going up across the board when it comes to real estate, the prices of luxury homes have increased more than the prices of non-luxury homes, which is the first time that has happened since 2014.
But why has the luxury home market been so strong in South Carolina recently? Two of the most significant factors are the stock market’s steady rise and improvements in the United States’ economy, both of which lead to the wealthy being more willing to spend on a new home.
Neighborhood Scout provided a few statistics about home sales in Southern Carolina. Median home values reached $296,964 in Charleston, $139,091 in Columbia and $165,311 in Myrtle Beach. Among those three cities, Charleston had the most luxury homes, with 9 percent having asking prices over $977,000.
As far as luxury home sales since the start of 2016, there have been several notable examples:
• The James Simmons House, which is at 37 Meeting Street, went for $7.51 million.
• In December 2016, there was a house located on 2 Water Street that went for $6.2 million.
• In January 2017, there was a house on 69 Meeting Street that went for $5.35 million.
• In July 2017, a buyer purchased a mansion at Kiawah Island for a whopping $15.25 million.
Charleston alone had 172 houses available on Zillow with asking prices over the $1-million mark, as of July 2017, with the most expensive being set at $19.5 million. Myrtle Beach had 32 houses on Zillow with asking prices over $1 million, and the most expensive was priced at $3.5 million.
Columbia had 13 homes available on Zillow with asking prices over $1 million, with the most expensive having a price of $1.89 million. Another notable home in the Columbia area was the former house of Steve Spurrier, who coached at the University of South Carolina and also in the NFL.
This bull market for luxury homes isn’t confined to South Carolina, and real estate agents tend to agree on the reason why the market is doing well nationwide.
Real estate is a large investment, and even the wealthy consider it carefully before making a purchase. They typically prefer to buy when the economy is doing well and outlook is positive for the future, which means that the health of the real estate market is closely tied to the health of the stock market and the overall economy.
Another important point in regards to the stock market is that wealthy people are more likely to invest their money and take greater charge of their investments. This makes them even more likely to take the current position of the stock market into account when they decide whether to buy a house. If the outlook on the stock market is positive, wealthy people will have a positive feeling regarding their money and its potential for growth, making them more likely to make extravagant purchases, such as luxury houses.
The fact that the 2016 Presidential Election is over also plays a role. Before the election, there was quite a bit of uncertainty surrounding the economy and the stock market. People get wary about the unknown. Now that the United States has elected a President, there’s no longer an unknown about who will be running the country.
Obviously, luxury homes are far more expensive than non-luxury homes and tend to have better amenities, along with better locations. The market for each type of home is also quite different.
There’s a much more limited supply of luxury homes, but also a more limited demand. For example, oceanfront properties are extremely popular in the luxury home market, but the reality is that there’s only so much oceanfront property to go around. It’s a limited amount of space. This results in oceanfront property often selling very quickly.
Luxury homes do tend to stay on the market longer because the number of potential buyers is smaller. A non-luxury home could be listed and sold in just a couple months, whereas a luxury home could be on the market for one or two years before a buyer snatches it up. Still, this is faster than it used to be, when luxury homes could be on the market for several years.
And who is a part of that luxury home market? Obviously it’s the wealthy, but they also tend to be people purchasing a second or third home, not their first. Retirees are frequent luxury home buyers.
The market for luxury homes varies significantly throughout the state, which is one reason why median prices are so different from city to city. Charleston is undoubtedly the state’s most well-known city, and it’s a popular tourist attraction.
The result is that luxury homes in Charleston get interest from buyers all over, whereas luxury homes in Columbia tend to get more interest from buyers already in Columbia. Even within Columbia, certain areas are much better for luxury home sales than others.
What’s next for luxury homes in South Carolina? Real estate agents are expecting the market to stay strong in the foreseeable future. Interest rates continue to be low, making financing a home an affordable option. Home sales aren’t as common during the summer, but the busy fall season is right around the corner and will likely result in another boost. Much of it comes down to the home itself and its location, but as long as it’s the right home in the right place, it’s usually easy enough to get the sale.