As Charleston SC continues to experience robust population growth and economic development, its housing market is poised for notable changes in 2025. This end of year post examines anticipated trends in housing inventory, pricing, the balance between new and existing homes, mortgage rates, and the factors influencing migration to the Charleston area.
Population Growth and Economic Factors
The Charleston area metro population has been steadily increasing, almost 3x faster than the US average, with projections estimating a rise above 850,000 in 2024, a 6% annual growth. With a median age of 38.4 and 40+ individuals moving here each day, this surge is driven by economic opportunities and a coastal inspired lifestyle. The Charleston region offers local employers a growing pool of 400,000+ skilled workers. The region’s education and workforce training system continues to build a solid base of technically-skilled workers in engineering, information technology and more.
Housing Inventory Dynamics
The Charleston housing market has demonstrated resilience over the past decade. Between 2016 and 2019, the market maintained an average of 5,829 homes available annually. However, the COVID-19 pandemic caused inventory to plummet to 2,246 properties in 2021, less than half the pre-pandemic average. Recovery began in 2022, with inventory climbing to nearly 3,500 homes available that year, and this year we have seen a slow increase throughout the year up to just over 4,300 homes. This suggests the market is still weighted towards the sellers and another roughly 2,400 listings market wide would need to be achieved for a "balanced market" (5 months of inventory). Due to this narrowing gap we are beginning to see steady price reductions and more seller concessions to entice the buyers sitting idle on the sidelines.
In 2025, inventory levels are expected to stabilize further, with a gradual increase as new construction projects are completed and more existing homes enter the market. This rise in inventory will provide buyers with more options, potentially easing the competitive pressure seen in recent years.
Housing Prices: A Moderate Increase
The median home prices in Charleston have been in a tight band between $400K-425K where it has been for the past 27 months. While the median sales price remains in a tight band, the average sold dollar per square foot has been on a steady increase - now an all time high at $301 per sq ft. This is well above the $285 we saw at the end of 2023 marking a 6% increase year over year. This suggests that the consumer may be fatigued in terms of the dollars that they can/are willing to spend on a home (Median Sale Price remains stable) but the consumer is getting a smaller house for the money (higher Sold $/sqft). This means that homes are continuing to appreciate despite a stable Median Sale Price. Experts forecast that in 2025, home prices will continue to rise but at a more moderate pace, with an average national increase of about 2.6%. Locally, Charleston is expected to see a similar trend, with home prices rising by approximately 2.5% to 3% in 2025.
New Homes vs. Existing Homes
The balance between new and existing homes is anticipated to shift slightly in 2025. In 2024 new homes actually represent about 33% of the total Charleston metro sales market and here is a breakdown by county:
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- 13% of all closings in Charleston County are new construction
- 48% of all closings in Dorchester County are new construction
- 50% of all closings in Berkeley County are new construction
With ongoing construction projects, the availability of new homes will increase, offering modern amenities and energy-efficient designs that appeal to many buyers. However, Charleston's historic charm and well-established neighborhoods ensure that existing homes will remain in demand, particularly among those seeking the city's unique architectural styles, mature landscapes, and proximity to the coast.
Mortgage Rates: A Gradual Decline
Mortgage rates have been a critical factor influencing buyer behavior. While rates have been relatively high in recent years, experts anticipate a slight decline in 2025, improving home sales and affordability. This decrease is expected to encourage more buyers to enter the market, contributing to increased sales activity. To get a better indication on where rates are going, follow the 10 Year Treasury. Mortgage rates and the 10-year Treasury tend to move in unison. If the 10-year Treasury yield moves higher, mortgages typically do, too — but with a margin of separation. Historically, the spread between the two has been between one to two percentage points. More recently, that spread has widened to around two-and-half percentage points.
Factors Influencing Migration to Charleston
Several factors continue to make Charleston an attractive destination for new residents:
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Economic Opportunities: The city's diversified economy, with growth in sectors such as technology, manufacturing, and healthcare, offers ample employment opportunities.
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Quality of Life: Charleston's rich history, cultural amenities, and coastal lifestyle contribute to a high quality of life that appeals to many.
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Educational Institutions: The presence of reputable educational institutions adds to the city's appeal for families and professionals seeking advanced education opportunities.
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Climate: The mild climate allows for year-round outdoor activities, attracting those who prefer warmer weather.
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Conclusion
Charleston's housing market in 2025 is expected to experience moderate growth in home prices, a gradual increase in inventory, and slightly lower mortgage rates. The city's economic vitality and quality of life continue to attract new residents, sustaining demand in the housing market. For both current residents and potential newcomers, understanding these trends is crucial for making informed real estate decisions in the Charleston area. As your realtor across the entire Charleston Metro area, I'm here and available to be your guide and resource when the timing is right!
