When it comes to residential real estate, the Upstate is in the right place at the right time. The vibrant, diverse market continues to attract millennials, retirees, and relocating and expanding companies and their employees. The region is a welcome alternative to larger cities like Atlanta and Charlotte, with many of the same amenities but less density.
“The challenge is that everyone wants to move here but no one wants to leave,” said Mark Bardo, Allen Tate Companies regional vice president, Upstate SC region. “This contributes to a lack of inventory, but it’s a wonderful problem to address.”
The 63-year-old Allen Tate Companies entered the Upstate region in 2008, expanded to the Mountain Lakes region in 2018 and operates eight local offices spanning from Greenville and Easley to Lake Keowee and Lake Hartwell.
In 2020, the Carolinas’ real estate leader found itself navigating a real estate market like never before, said Pat Riley, Allen Tate Companies president and CEO.
“Since June, housing across this country has recovered in an unparalleled way. After a considerable loss due to COVID in the spring, we have made up for the market in the second half of the year,” Riley said.
Across the country, about 6 million homes were sold in 2020, an increase of 10.5 percent over 2019, Riley said. One million of these homes were new construction, an increase of 43.2 percent over the previous year. And mortgage applications are up more than 30 percent, thanks to historic low interest rates.
“Today, the word is move – or refinance,” Riley said.
In the Upstate, low interest rates will continue to sustain active buyer demand, Bardo said. But interest rates could spike as early as summer 2021, as the country continues in an inflationary cycle, Riley said. That could cause some undecided buyers to get off the fence in the short term. But finding a home to purchase is the bigger issue.
Inventory will remain a challenge for several reasons. Baby Boomers – who have been dragging their feet for the past decade – have delayed selling for another year because of COVID. New construction still lags because of a builder labor shortage, tighter government regulation, and a COVID-disrupted supply chain. And all those people who bought new homes – or refinanced their home – will contribute to the inventory issue, as they comfortably settle in and stay put, Bardo said.
“High demand with low supply is expected to provide the catalyst for additional appreciation,” Bardo said.
Riley said that throughout the Carolinas, homes will continue to appreciate at a rate of 8 to 11.4 percent, but he reminds sellers that real estate is very, very local.
“This appreciation is the result of lack of inventory, but it does not forecast another housing bubble like 2006, when lending standards were very relaxed and people were disenchanted with the stock market,” Riley said. “Depending on inventory and demand, some areas could see lower appreciation.”
One strong advantage for the Upstate region is the secondary housing market.
“COVID has taught us that we deserve an escape home at the lake, mountains or beach. And interest rates say, if ever, now is the time,” Riley said.
First-time homebuyers and buyers relocating from other markets will create most of the demand in the region, Bardo said.
“Our region is blessed with a culture that is attractive to buyers who desire to escape the larger cities for less dense markets,” Bardo said. “But we still need to remedy the inventory problem — which is happening in many desirable markets, not just the Upstate.”
With a limited number of starter homes, first-time buyers must be ready to purchase and prepared to compete, Riley said.
Despite the unpredictability of 2020, the New Year brings promise.
“The forecast for the Upstate residential real estate market remains optimistic, with strong tailwinds,” Bardo said.