Real Estate Market Update: Charleston, South Carolina

A note from the Brokers at Smith Spencer Real Estate:
FEBRUARY 2024 | WOE IS WE
It’s time we had a little chit, a little chat if you will, about the alarming surge in homeowner’s insurance premiums. Some say it’s the price you pay for living on the coast but it’s not just us; renewal costs increased by an average of 35% nationwide between May 2022 and May 2023. We are all littermates of rising costs. One of the biggest factors in the price of premiums is replacement cost, which is the expense to repair or replace damaged property without deducting for depreciation. And as we’re all painfully aware, the cost of *literally everything* but particularly housing supplies skyrocketed during the pandemic and has not returned to what most (anyone?) would consider an affordable level.
 
That, combined with escalating frequency and severity of hurricanes, wildfires, and floods is leading insurance companies to reassess and recalibrate their risk models and many are washing their hands of South Carolina. In California, legislators capped private insurance premium increases at 7% per year and as a result, several insurance companies opted to leave there as well after determining the risk just isn’t worth it. We’ve heard lore of homeowners without mortgages say “this math ain’t mathing” and opting to self-insure… ahh, the ugly side of chance.
 
Since this does not appear to be a short-lived problem, a word of advice from your trusty real estate troubadours: it is essential that you treat insurance almost like you would a mortgage pre-approval process. You must figure out what you can afford prior to or during your due diligence period. Shop rates and make sure you understand your coverage. We have a two-part series on recent insurance happenings on our Between Two Brokers podcast. Part one is out today!
 
In other “woe is we” news – mortgage rates increased about ½ a percent over the last three weeks to the surprise of just about everyone (except us - we warned of this in January’s newsletter!) thanks to job growth and continued inflation. But January is a big time for companies when it comes to hiring and firing so the next jobs report (March 8th) will be telling. Rates are still expected to be lower as the year goes on…prices are not.
 
How about some good news: The Charleston economy continues to be the belle of the ball. Redwood Materials, a producer and recycler of anode and cathode battery components for electric vehicles, announced it is breaking ground for the first phase of construction at its Battery Materials Campus. The entire project is set for 600 acres and a $3.5B investment in Berkeley County. It is estimated that 1500 people will be employed within the next 10 years. SHL Medical, a Switzerland based provider of advanced drug delivery solutions, is building a $150M facility in North Charleston. Nix Development received financing for a $26M 72-unit affordable senior housing community planned for Johns Island. The North Charleston City Council recently approved contract agreements for the 50-acre riverfront development known as Battery Park. A partnership consisting of Jamestown, Weaver Capital Partners, and WECCO Development will assist the city in transforming the former Charleston Naval Complex into a vibrant, mixed-use district and regional destination that will include over 1,400 residential units. Air Canada is boosting its North American network capacity with the addition of Charleston as a nonstop destination. The daily international service between CHS and Toronto Pearson International Airport begins March 28... in case you prefer an extended winter!
 
Cheers,
Erin + Stacy

𝘊𝘩𝘢𝘳𝘭𝘦𝘴𝘵𝘰𝘯 𝘏𝘪𝘨𝘩𝘭𝘪𝘨𝘩𝘵𝘴:

💥 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗿𝗮𝘁𝗲𝘀 𝘩𝘢𝘷𝘦 𝘥𝘳𝘰𝘱𝘱𝘦𝘥 𝘴𝘪𝘨𝘯𝘪𝘧𝘪𝘤𝘢𝘯𝘵𝘭𝘺 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦𝘪𝘳 𝘱𝘦𝘢𝘬 𝘭𝘢𝘴𝘵 𝘧𝘢𝘭𝘭 (𝘧𝘳𝘰𝘮 8% 𝘥𝘰𝘸𝘯 𝘵𝘰 𝘢𝘳𝘰𝘶𝘯𝘥 6.5%) 𝘢𝘯𝘥 𝘩𝘰𝘮𝘦𝘣𝘶𝘺𝘦𝘳𝘴 𝘢𝘳𝘦 𝘣𝘦𝘨𝘪𝘯𝘯𝘪𝘯𝘨 𝘵𝘰 𝘤𝘰𝘮𝘦 𝘰𝘶𝘵 𝘰𝘧 𝘵𝘩𝘦 𝘸𝘰𝘰𝘥𝘸𝘰𝘳𝘬, 𝘸𝘪𝘵𝘩 𝘕𝘈𝘙 𝘧𝘰𝘳𝘦𝘤𝘢𝘴𝘵𝘪𝘯𝘨 𝘢 13% 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦 𝘪𝘯 𝘦𝘹𝘪𝘴𝘵𝘪𝘯𝘨-𝘩𝘰𝘮𝘦 𝘴𝘢𝘭𝘦𝘴 𝘵𝘩𝘪𝘴 𝘺𝘦𝘢𝘳 𝘤𝘰𝘮𝘱𝘢𝘳𝘦𝘥 𝘵𝘰 2023.

💥 𝗣𝗿𝗶𝗰𝗲𝘀 𝘮𝘰𝘷𝘦𝘥 𝘩𝘪𝘨𝘩𝘦𝘳 𝘪𝘯 𝘑𝘢𝘯𝘶𝘢𝘳𝘺 𝘢𝘴 𝘮𝘦𝘥𝘪𝘢𝘯 𝘴𝘢𝘭𝘦𝘴 𝘱𝘳𝘪𝘤𝘦 𝘸𝘢𝘴 𝘶𝘱 7.7% 𝘵𝘰 $420,000. 𝘔𝘰𝘯𝘵𝘩𝘴 𝘴𝘶𝘱𝘱𝘭𝘺 𝘰𝘧 𝘪𝘯𝘷𝘦𝘯𝘵𝘰𝘳𝘺 𝘸𝘢𝘴 𝘶𝘱 11.1% 𝘵𝘰 2.0 𝘮𝘰𝘯𝘵𝘩𝘴, 𝘪𝘯𝘥𝘪𝘤𝘢𝘵𝘪𝘯𝘨 𝘵𝘩𝘢𝘵 𝘴𝘶𝘱𝘱𝘭𝘺 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦𝘥 𝘳𝘦𝘭𝘢𝘵𝘪𝘷𝘦 𝘵𝘰 𝘥𝘦𝘮𝘢𝘯𝘥.

💥 𝗗𝗮𝘆𝘀 𝗼𝗻 𝗠𝗮𝗿𝗸𝗲𝘁 𝘍𝘦𝘣𝘳𝘶𝘢𝘳𝘺 2023 𝘩𝘢𝘥 𝘵𝘩𝘦 𝘩𝘪𝘨𝘩𝘦𝘴𝘵 𝘯𝘶𝘮𝘣𝘦𝘳 𝘰𝘧 𝘥𝘢𝘺𝘴 𝘰𝘯 𝘵𝘩𝘦 𝘮𝘢𝘳𝘬𝘦𝘵 𝘰𝘷𝘦𝘳 𝘵𝘩𝘦 𝘭𝘢𝘴𝘵 𝘺𝘦𝘢𝘳 𝘸𝘪𝘵𝘩 46; 𝘑𝘶𝘭𝘺 2023 𝘩𝘢𝘥 𝘵𝘩𝘦 𝘧𝘦𝘸𝘦𝘴𝘵 𝘸𝘪𝘵𝘩 27.

💥 𝗣𝗲𝗻𝗱𝗶𝗻𝗴 𝘀𝗮𝗹𝗲𝘀 𝘪𝘯 𝘑𝘢𝘯𝘶𝘢𝘳𝘺 𝘫𝘶𝘮𝘱𝘦𝘥 8.3% 𝘧𝘳𝘰𝘮 𝘋𝘦𝘤𝘦𝘮𝘣𝘦𝘳, 𝘮𝘢𝘳𝘬𝘪𝘯𝘨 𝘵𝘩𝘦 𝘭𝘢𝘳𝘨𝘦𝘴𝘵 𝘨𝘢𝘪𝘯 𝘴𝘪𝘯𝘤𝘦 𝘑𝘶𝘯𝘦 2020.

💥 𝗖𝗵𝗮𝗿𝗹𝗲𝘀𝘁𝗼𝗻-𝗮𝗿𝗲𝗮 𝗺𝗲𝗱𝗶𝗮𝗻 𝘀𝗮𝗹𝗲𝘀 𝘱𝘳𝘪𝘤𝘦 𝘩𝘢𝘴 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦𝘥 𝘧𝘳𝘰𝘮 $𝟯𝟲𝟬𝗸 𝘪𝘯 𝘑𝘢𝘯 2022 𝘵𝘰 $𝟰𝟮𝟬𝗸 𝘪𝘯 𝘑𝘢𝘯 2024.

💥💥💥 𝟭 𝗼𝗳 𝗲𝘃𝗲𝗿𝘆 𝟱 𝘀𝗶𝗻𝗴𝗹𝗲-𝗳𝗮𝗺𝗶𝗹𝘆 𝗵𝗼𝗺𝗲𝘀 𝘁𝗵𝗮𝘁 𝘄𝗲𝗻𝘁 𝘂𝗻𝗱𝗲𝗿 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝗹𝗮𝘀𝘁 𝘄𝗲𝗲𝗸 𝗵𝗮𝗱 𝗮 𝗹𝗶𝘀𝘁 𝗽𝗿𝗶𝗰𝗲 𝗼𝘃𝗲𝗿 $𝟭𝗠.**

Sign up for my Newsletter to receive this monthly in your inbox. 💌

* data from Chas MLS
**𝘧𝘰𝘳 𝘥𝘦𝘵𝘢𝘤𝘩𝘦𝘥 𝘩𝘰𝘮𝘦𝘴 𝘰𝘯𝘭𝘺 - 𝘥𝘰𝘦𝘴 𝘯𝘰𝘵 𝘪𝘯𝘤𝘭𝘶𝘥𝘦 𝘤𝘰𝘯𝘥𝘰𝘴 𝘰𝘳 𝘵𝘰𝘸𝘯𝘩𝘰𝘮𝘦𝘴.