The COVID pandemic has had many effects on people and businesses throughout the country and the state. One thing that may have been missed by many is its effect on the home real estate market. University of South Carolina Finance and Real Estate Professor Steve Martin said there are fewer houses on the market than there normally would be, and COVID is part of the reason.
"I think that there are fewer homes available for sale because the people occupying the homes may not want to move. I think the pandemic in general has caused there to be a reluctance to move unless you have to. Because of that, we have fewer homes available for sale."
Fewer homes for sale make it a seller's market, making prices higher, said Martin. Morris Lyles, president of South Carolina Realtors, said these few homes were snapped up in 2020, a surprisingly good year for sales, considering the pandemic.
"Last year we had more closed sales than we ever have since we've been tracking it," he said. "That was a five percent increase over 2019, and in 2020 we saw a drop in inventory of almost 37%. Now most markets are carrying about two months of inventory, which means that some houses are selling the first day they go on the market. But two months of inventory is a lot lower than what we'd consider a balanced market." A balanced market would be closer to six months of inventory, Lyles said.
Buyers should expect more of the same in 2021, said Lyles. Martin agreed, but said he believed weather and the COVID vaccine could possibly have a salutary effect on sales.
"Traditionally, you can find a lot more homes available in the summer. Whether or not that happens this summer, in my opinion, depends on the vaccine. If the vaccines work, then maybe we can move back to something that is more in the direction of normal. Having said that, I think it'll be another year or two, or even three, before we see something in line with what we're accustomed to."
When the market will turn back to buyers may be affected by economic issues and trends, according to Lyles. Martin had his own ideas about what it would take to become a buyer's market once more.
"It's going to take sellers deciding to sell their homes. And in my opinion, we will start to see more of that as the vaccines start to take effect."
Until the market does favor buyers again, Lyles had some advice for how buyers can save money or improve their deals when purchasing homes.
"The biggest thing is saving that money...so you have a larger down payment. Because that's instant equity, and it helps you to get a lower interest rate, and it also may help you to get the right house," he said. "Because when you're bidding on a house and there are several other offers, they're gonna look at those things. They're gonna see how much you're putting down and how much you're borrowing from the bank, and so all those things are factors."
Lyles said for those who have homes they've been thinking about selling, it's a good time to do it, because the seller's market is strong and houses are needed.