2021 Charleston Real Estate Market Investing Forecast

Note: Our market forecast covers Charleston data and data from the area including North Charleston.

A leisurely stroll through Old Town Charleston takes visitors back in time, with old-world charm and a mix of architectural styles. Routinely named one of the world’s top travel destinations, Charleston has a rich history, world-class cuisine, sandy beaches, and much more.

Unlike many vacation spots where travelers only come for a week and then return, Charleston’s appeal has a growing number of visitors who choose to make it their permanent home. The city’s population growth has made it more attractive to real estate investors.

Here’s a closer look at the local Charleston property market.

Why should one consider Charleston for real estate investment?

Located in South Carolina’s Lowcountry region on the Atlantic coast, Charleston has a rich history. The city was founded in 1670 as Charles Town in honor of King Charles II and has become an important trading port. It was once one of the largest cities in North America. The importance of its port made Charleston an important naval battleground in both the American Revolution and the Civil War.

While the Port of Charleston remains a major economic engine in the region – it handles about 22% of the total container volume of South Carolina’s port system – the city has a diverse economy that has grown rapidly in recent years. According to the Federal Reserve Bank of St. Louis, GDP has increased 75% over the past decade.

As a result, Charleston is rated highly for job growth and the general business climate. Add this to the high quality of life in the city thanks to its rich history and warm weather, and it has been a magnet for millennials and baby boomers in recent years.

Overall, Charleston’s population has grown three times faster than the national average and has doubled the rate of growth of South Carolina. This upward trend is likely to continue over the next decade. Forecasters assume that the city will grow by a further 25% by 2030. As a result, the demand for residential property in the area should remain robust, making it an ideal location for property investors.

The state of the market

The Charleston real estate market remained strong in 2020 despite the impact of the COVID-19 outbreak on the city’s hospitality and tourism sectors. South Carolina quickly reopened much of its economy after the first wave, not restricting indoor eating or other activities during subsequent waves.

In the meantime, immigration to the city continued as the region’s economy barely skipped a beat and resulted in below-average unemployment. In addition, retirees and remote workers kept moving to the region due to the warmer weather, high quality of life and affordability. As a result, inventory levels remain low, causing house prices to continue to rise.

Here’s a quick snapshot of three major property trends for the Charleston market.

Unemployment is low

In January 2021, the Charleston unemployment rate was 4.3%. That is a slight increase compared to the level before the pandemic. However, it is well below the national average and has improved significantly from its peak in the early days of the COVID-19 outbreak. The city benefits from a diversified and generally stable economy thanks to a significant employment base in the healthcare, military, and aerospace sectors.

The real estate market is tense

The housing stock in Charleston remains low at less than three months. The region’s housing stock hit a 20-year low in 2021. It had only about a quarter of the housing stock that was needed for a balanced market. As a result, real estate prices have continued to rise.

Rents are plentiful

While Charleston has a shortage of single-family homes, there is a deluge of rental units in the area. As a result, the vacancy rate is well above the national average, while the average rental rate is below average. This is due to a significant development of apartment buildings in recent years. the transitory nature of some residents, as Charleston has a large student and military population; and a higher number of short-term rentals for the tourism industry.

Indicators of demand for residential property in Charleston

All data and graphs are from Housing Tides by EnergyLogic.

As mentioned earlier, the Charleston market is strong, as evidenced by the following key indicators of residential demand.

Unemployment trends

The unemployment rate in Charleston has been below the national average for several years. While it saw an increase in 2020 as a result of the pandemic, it rebounded quickly, although the city has a significant number of hospitality jobs due to the importance of the tourism industry to its economy.

While some restaurants were permanently closed because of the pandemic, the South Carolina government quickly reopened their economies, allowing many restaurants to be near full for most of the past year. As a result, tourists continued to visit the region, keeping their hotels occupied and their restaurants busy.