WHAT TO EXPECT IN 2023: Real Estate on Seabrook
Curious about what to expect in 2023 in terms of real estate? The real estate market is fluid — always has been, and always will be. We all know this intuitively, but still feel a sense of shock or concern when dynamics shift. Certainly, the past year has been one of uncertainty. In January 2022, mortgage rates were around 3%, and then, in the blink of an eye, they crept up to 4%, then 5%, and even flirted with 7%. From a nationwide perspective, inventory increased gradually and demand waned somewhat, meaning the fierce competition amongst buyers subsided. Naturally, the question I receive the most from Seabrook Island owners and club members is, “What will 2023 hold for real estate on Seabrook island?” The short answer: everything will be fine.
Don’t Buy Into The National Rhetoric
Above all, Seabrook Island owners are concerned about their property’s value or liquidity. With many pundits and so-called experts in the market playing into this fear, it’s no wonder people are uneasy. However, it is not the doom and gloom some would have you believe. After going through multiple cycles in the market as a real estate professional and broker, my 40 years of experience lead to a different conclusion. Each past downturn had multiple economic causes that influenced the market to decline precipitously. The good news for Seabrook is that we are simply not in that type of environment heading into 2023. Let’s take a deeper look.
Seabrook’s Available Inventory Is Low
The market is decelerating, not depreciating. That’s important to understand when considering what to expect in 2023. Current inventory conditions indicate the market is stable and supply-and-demand principles will resist a rapid downturn for the near future. In January of last year, Seabrook Island inventory stood at historic lows with 12 properties on the market. That number had dropped rapidly year-over-year due to great demand. That number was quite different from 2018 figures, when Seabrook Island
inventory stood at 394 properties for sale. And while inventory rose to 74 properties for sale this past November, it has since fallen each of the last three months and now stands at just 51. Quite simply, our inventory level won’t allow for a looming bubble that so many are concerned about.
The Interest Rate Factor
Wondering what to expect in 2023 in terms of interest rates? Rising rates have certainly been slowing the market absorption of properties for the last 90 days. However, the main dampener has been buyer confusion and perceived uncertainty more so than the actual rates. Now that the steep increase in inflation month-over-month has stabilized—and actually begun to recede—the upward pressure on rates has decreased. The Fed has signaled the possibility of two more quarter-point increases in 2023, which will not have a dramatic effect on rates. As it stands now, rates for a 30-year fixed mortgage are at 6% with no points. It’s worth noting, for purchasers over the age of 50, current rates are below what they were accustomed to during their prime home-buying years.
The deceleration of the marketplace is not due to a dearth of buyers shaken by high interest rates or other economic uncertainty. Buyers are still plentiful. It is sellers and their properties that the market requires to accelerate again. Sellers have been slow to accept the deceleration in the marketplace. Having attempted to take advantage of rising sales prices, many listed their property for additional gains beyond what the current market yields. Remember, it is closed sales, pending contracts, and what a buyer is willing to pay based on those figures that determine value — not list prices. While list prices are correcting, actual closings still offer the tremendous gains realized over the past two years. Buyers likewise may be disappointed that values are not falling and creating an opportunity to secure a property “below market.” But as fears and confusion in the marketplace ease, sales values and the pace of sales will normalize.
High Visibility Increases Demand
Seabrook Island is no longer a secret. Increased exposure and awareness is attracting prospective buyers from across the country. A scarcity of in-demand properties in Charleston—oceanfront, deepwater, riverfront, marsh, and golf course offerings—have drawn buyers and agents to discover Seabrook’s natural beauty and elevated lifestyle. This will only grow stronger in the future, driving demand and home values even higher, regardless of fluctuations in the real estate market at large.
So Now What?
Make sure you know exactly what to expect in 2023, including all of the realities and opportunities so that you can make an informed decision you’ll feel good about long-term. Partner with a real estate expert who not only understands the complicated, ever-shifting dynamics of the market, but also your specific situation on Seabrook Island. At Seabrook Island Real Estate (SIRE), we list and sell more Seabrook Island properties than all other companies combined. In 2022, we were involved in 188 of the 257 property sales here. That’s 73%. Drop by our office, or contact me or our team with any questions. We are always available to share our expertise and assist Seabrookers with your real estate needs.