Steering factors to watch for 2023 real estate market

By Chip Collins CONTRIBUTOR

As we look to the year ahead for real estate in the Lowcountry, here are a few of the steering factors that we’re paying close attention to.

• Seller inventory. In the spring of 2022, newly listed inventory was beginning to climb, causing some buyers and market analysts to speculate that we might see a sharp spike in inventory as the hot market began to cool. However, continued strong buyer demand absorbed the best opportunities in that new wave of listings, leaving only those listings that were overpriced or in non-premium condition to add to the longer-term inventory.

Fast forward to the start of 2023, we see a higher active inventory than a year before, but there’s only a trickle of new listings coming on the market. Owner property retention is at an all-time high as many owners are compelled by their low-interest-rate loans, and confident in the stability of property values in the Lowcountry. The net effect is a continued seller’s market amid low inventory and steady demand.

• Buyer demand. For the second year in a row in ’22, Collins Group Realty ushered in buyers from 30 states, deeply diluting the long-standing joke that everyone comes from Ohio. 2023 has started off with not only a steady stream of new buyer interest, but we’ve also seen that the new year has clicked existing prospects into a new gear, and post-holiday market activity has sprung into full swing.

The Lowcountry has received a tremendous amount of positive press over the past several years, and we are fielding increasing inquiries from folks who are just hearing about our area recently. And, as always, the rule that “friends follow friends” has never been more at play than in the wake of the record-setting market we just experienced.

• Money. An obvious factor when it comes to any real estate market, money promises to be a particularly impactful steering factor this year. The stock market has finally shown its other face, which has sent investors (once again) back into real estate as a diversified investment avenue. Plus, as baby boomers are poised to conduct the greatest wealth transfer ever (some $68 trillion!), we expect to see a continuation of impressive cash purchases, especially as we attract buyers from higher sales price markets. Meanwhile, mortgage money is readily available as lenders are getting creative in their programs to help offset the rise in rates we saw develop last year.

• The Ripple and the Bubble. It’s well established that not much that happens in our local market causes a ripple effect in the national market. Quite the opposite, we have more often felt the effects when markets elsewhere experience substantial change. As the sense of wealth and equity has grown for those who enjoy the Lowcountry, our market has grown as a result. And, in times (like 2008) when financial insecurity has taken hold, we’ve suffered from that decline. Yet, given the significant growth in our year-round population, the expansion of our market area, and the more dynamic nature of our economy, it’s possible that we may be building somewhat of a protective bubble around our market, making us less vulnerable to the ripple effect that has previously impacted our market demand and values. The Lowcountry is coming into its own, and it’s exciting for all of us!

For more steering factors in their 2023 Annual Market Analysis, visit CollinsGroupRealty.com/2023-2.

Chip Collins is the broker-owner of Collins Group Realty. chip@collinsgrouprealty.com or collinsgrouprealty.com