Historically, real estate activity in the Lowcountry slows during the winter months. Between the cold weather and the holidays, the housing market typically goes into a hibernation of sorts, with both buyers and sellers shelving any major real estate moves until spring.
However, this winter's real estate market is shaping up to be unlike any other before it. Contrary to what some may have feared, the fall and winter are slated to be an excellent time to sell a home. In fact, Lawrence Yun, chief economist at the National Association of Realtors, predicts "it will be one of the best winter sales years ever."
What's driving these predictions for a strong winter market? Chalk it up to a perfect storm of low mortgage interest rates, sparse housing inventory, plus a pandemic that's fundamentally changed how, when, and where buyers are shopping for homes.
If you put your home-selling plans on hold until spring, read on for a surprising reality check on all the reasons this winter could be a great time to put your Lowcountry home on the market.
Pent-up Buyer Demand in the Lowcountry
While spring is typically real estate's busy season in the Lowcountry, the spring of 2020 saw the housing market grind to a near halt amid pandemic-mandated lockdowns. This, in turn, created pent-up demand to purchase property that is being unleashed.
"We currently see buyers sticking around in the housing market much later than we usually do this fall," says Danielle Hale, chief economist at realtor.com®. "If that trend continues, we will see more buyers in the market this winter, too. So this winter is likely to be a good time to sell."
"There are plenty of people in the pipeline ready to hit the market this late autumn and winter," Yun agrees.
Lockdowns Have Changed Buyers' Needs
The pandemic has not only created pent-up demand, but many buyers are also in the market because they realized their space is no longer big enough. And now that the temperature's dropping so they can't easily escape to their back patio to catch up on emails alone.
With people spending so much time in their homes, including working from home and virtual schooling, there's a great emphasis on being happy there. Lack of space is a complaint agents hear more often now.
And if people are allowed to continue working from home rather than commuting to an office, they might also realize that they can shop for homes farther outside cities—great news for home sellers who live in the Lowcountry.
Housing Inventory is Low
Although buyers are plentiful, the number of homes for sale is significantly lower than usual. According to realtor.com's Monthly Housing Market Trends Report, in September, national housing inventory declined 39% over last year.
"Because the number of homes available is currently at a record low, even if we see some improvement, which I expect, there will still be relatively few homes for sale," Hale says. "That will keep upward pressure on home prices and help ensure that homes continue to sell quickly."
"Inventory is low, so the overall advantage is with the seller," agrees Yun.
It's simple supply and demand: Low supply and high demand can lead to higher home prices, so sellers are in an excellent position.
Across the country, median home listing prices jumped 11.1% in September compared with a year ago, to $350,000, according to realtor.com. Additionally, the price per square foot increased by 13.9%.
"Sales prices and home values remain strong," McDaniels says. And since there are so many offers on the table, "sellers can call the shots regarding terms of contract and repairs."
The only challenge sellers face with such low inventory—if you can even call it a challenge—is dealing with too many offers at once, says Curtis.
"The challenge they face is navigating multiple offers and not accepting an offer too quickly to help ensure they get the most money for their home," he says.
Low Mortgage Interest Rates
Buyers in the market are facing stiff competition, but it's not all bad news for them. Despite higher home prices, record-low interest rates mean buyers stand to save money.
Interest rates on a 30-year fixed-rate loan were 2.8% as of Oct. 22, according to Freddie Mac.
This "boosts buyer home purchasing power," Hale says. "In fact, despite double-digit increases in home prices this year compared to last year, today's home buyers are likely actually paying slightly less on their mortgage each month, thanks to much lower mortgage rates."
The Federal Reserve has continued to lower interest rates this year to keep the economy going during the COVID-19 crisis, says McDaniels.
"Even before the COVID-19 pandemic, economists and real estate professionals predicted mortgage interest rates would remain below 4% in 2020," she says. "This means buyers that might have waited will consider entering the market this year."
Any Economic Shift May Not be Felt Until Spring
Although unemployment continues to rise due to COVID-19 layoffs, Hale says this could affect the real estate market, but the effects likely won't be felt for a few months.
"A worsening unemployment rate would lead to a slowdown in the housing market and home sales, but I don't expect that to happen immediately, more likely in the spring," Hale says. This could create a slower start to the spring home-buying season.