As we have watched businesses all around us struggle .to survive in this pandemic, one industry that has thrived, at least in the Lowcountry, is real estate.
But what is the true reason it’s doing so well here? Bill Payne, CPA and assistant branch manager at First Home Mortgage in Mount Pleasant, said that it is a combination of many factors.
In particular, he described what Mount Pleasant set out to do after the Arthur Ravenel Bridge was completed in 2005.
“Mount Pleasant set themselves up to have a strong infrastructure, along with some of the best school systems in place, which would be attractive to families. The area had already been attractive to retirees, due to the location by the water and the weather,” he said.
Payne said that interest rates are low right now — in the high 2% to 3% range, depending upon the day — for a 30-year fixed mortgage. The inexpensive cost to borrow money has driven the demand for housing and, in turn, pushed down the inventory of homes in the area.
“Basically, we expected there would be a boom in real estate here, but because of the pandemic, it pushed it up sooner than we thought it would happen. People are leaving metropolitan areas, especially from the Northeast, and moving to places like the Lowcountry. There has always been a push like this in our market after a heavy winter, so the inherent difference this time is it’s caused by the pandemic,” he said.
These lower interest rates have financially benefited families who chose to stay put, as well.
“Lower interest rates have also allowed homeowners to refinance thus increasing their disposable income. The Federal Reserve Board’s hope is that consumers will spend that extra cash in the local economy, which will help us turn things around quicker,” he added.
But all of this doesn’t mean that homes are necessarily more affordable. Payne explained that because the inventory is low, sellers are getting their asking price, due to the competitive nature of buying a home in the Lowcountry.
“I have noticed a willingness for buyers to offer more than the list price for a home and risk that the appraisal may come in for less than the agreed purchase price. That type of activity speaks to our incredible market.”
It’s hard to predict the future, but Payne said he believes this will likely continue for another two years, as the Fed continues with their current monetary policy to keep the economy afloat and eventually bounce back from the pandemic.
His advice to people thinking of buying a home is to go for it, but to be prepared for the competitive nature of the current real estate climate. “I don’t see the market getting less expensive here. I expect to see a greater trend of people buying farther up I-26, due to affordability, but home values will continue to increase as long as demand for housing exceeds the supply,” he said.
Payne said cities in the Northeast are seeing the opposite issue. “Working remotely is now the norm, so the cost of rent is falling in the largest and most expensive markets as people opt to relocate for more outdoor space. The Lowcountry checks most of the boxes for people looking for a change from the metropolitan lifestyle.”
For more information on First Home Mortgage, call 843-532-1392, or visit billpaynemortgagelender.com.