Area businesses are struggling to recruit new staff due to housing costs and some are taking matters into their own hands.
The Post and Courier recently reported that Cynthia Feldman of Sweetgrass Pharmacy who has looked for job applicants across South Carolina and into Georgia, stated. “The number one thing they all said is it’s too expensive to live here,”
The owner of Sweetgrass Pharmacy is now purchasing three townhomes in Twin Rivers Towns, just across the Wando River from Mount Pleasant. The homes start in the mid-$300,000 range. She will rent them to staff at below market rates and is considering buying more.
Likewise, Roper St. Francis Hospital is now soliciting proposals to build housing on its campus in northern Mount Pleasant to offer as an affordable solution. “The need is so pervasive,” said Roper’s interim CEO Megan Baker. “We do have a sense of urgency that’s palpable.”
Sweetgrass and Roper could be the first Charleston-area businesses to decide to buy or build housing in order to hire and retain employees, but they likely won’t be the last.
To be considered affordable, the cost of housing should not exceed 30 percent of one’s income. An annual income of $55,000, would translate to a monthly target housing cost of no more than $1,375, which is an amount that is getting harder to achieve.
In the tri-county area, the federal Department of Housing and Urban Development now considers a salary of $58,900 yearly to be “low income.” To put that in perspective, In 2023 The SC Department of Employment and Workforce reported that the average annual wage across all occupations in South Carolina was $54,250 (based on 2,080 hours of work in a year at an hourly rate of $26.08). This was up $3,600 from the average salary of $50,650 in 2022, a 7.1 percent gain.
“As residents are required to live further away from the communities in which they work and engage, more cars are on major roads for longer amounts of time, leading to increased traffic across the region,” the Charleston Metro Chamber of Commerce said in April. “As individuals and families spend more than 30 percent of their income on housing expenses, less money is available to be spread across businesses in our region.”
“It’s taken a while for the business community to come around, but they are aware that housing is a workforce issue,” said Josh Dix, who handles advocacy for the Charleston Trident Association of Realtors and chaired Charleston County’s housing task force.
Mortgage rates continued to fall this week, with the average rate for a 30-year fixed home loan sinking from 6.95% last week to 6.87% for the week ending June 20, according to Freddie Mac.
“Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “These lower mortgage rates coupled with the gradually improving housing supply bodes well for the housing market.”
Mortgage rates have hovered around the 7% mark, fluctuating slightly above and below this benchmark for nearly two months, creating a market largely stuck in neutral.
“For mortgage rates to drop more, the [Federal Reserve] needs to see more evidence of slowing inflation vis-a-vis lower [Consumer Price Index] readings and moderating employment growth,” Ralph McLaughlin, a senior economist at Realtor.com, said in a statement.
“Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024/early 2025,” he added.
The big picture: The more the economy shows signs of slowing, the more the market thinks that the Federal Reserve will cut interest rates, which in turn pressures mortgage rates down.
If you’re planning to move soon, you might be wondering if there’ll be more homes to choose from, where prices and mortgage rates are headed, and how to navigate today’s market. If so, here’s what the professionals are saying about what’s in store for this season.
Odeta Kushi, Deputy Chief Economist, First American:
“. . . it seems our general expectation for the spring is that we will see a pickup in inventory. In fact, that already seems to be happening. But it won’t necessarily be enough to satiate demand.”
“Where we are right now is the best of both worlds. Price increases are slowing, which is good for buyers, and prices are still relatively high, which is good for sellers.”
“There are slightly more homes for sale than this time last year, and there is still plenty of competition for well-priced houses. Buyers should prep their credit scores and sellers should prep their properties now, attractive listings are going pending in less than a month, and time on market will shrink in the weeks ahead.”
“While mortgage rates remain elevated, home shoppers who are looking to buy this spring could find more affordable homes on the market than they saw at the same time last year. Specifically, there were 20.6% more homes available for sale ranging between $200,000 and $350,000 in February 2024 than a year ago, surpassing growth in other price ranges.”
If you’re looking to sell, this spring might be your sweet spot because there just aren’t many homes on the market. Sure, inventory is rising, but it’s nowhere near enough to meet today’s buyer demand. That’s why they’re still selling so quickly.
If you’re looking to buy, the growing number of homes for sale this spring means you’ll have more choices than this time last year. But be prepared to move quickly since there’ll be plenty of competition with other buyers.
If you need assistance buying or selling a home in the Charleston Area, feel free to contact me! I would be glad to help!
Recognized as the No.1 master-planned community in the U.S. by the National Association of Home Builders (NAHB), Nexton is currently one of the Top 30 best-selling communities in the nation and has surpassed its 3,000th home sale in February 2024.
Nexton’s four unique neighborhoods feature local and national builders and include a diverse array of homes including villas, townhomes, cottages and single-family homes, with home prices ranging from $300,000 to over $1 million with an average home price of approximately $500,000.
Nexton has established itself as a live-work-play destination that features dining, shopping, services and hospitality. Nexton has delivered over 500,000 square feet of office space, attracting thousands of jobs, all in a walkable and bikeable environment adjacent to I-26.
Nexton also offers conveniences such as sought-after schools, grocery stores, modern infrastructure, 20 miles of trails and 2,000 acres of green space and high-quality apartment communities.
The $510 million land deal for the undisclosed business that I posted about in October 2023 has been revealed. Internet giant Google confirmed Feb. 15 that it is planning to build a $510 million data center at the Pine Hill Business Campus west of Summerville — the company’s second in the Charleston region.
The project has received historic tax breaks from Dorchester County and a discount electricity deal from Dominion Energy. Google also has not said when it will begin construction or how many jobs it will create at the 231-acre site along Highway 17A.
The Pine Hill data center will join another that the company completed in 2007 at Mount Holly Commerce Park off Highway 52 near Moncks Corner in neighboring Berkeley County.
Google, going by the aliases Project Evergreen and Gannett Enterprises LLC, has also purchased 206 acres for a proposed third data center near the county’s Winding Woods Commerce Park along Highway 78. The company said it only plans to develop the Pine Hill project for now but will hold onto the other land near the town of St. George for potential future needs according to business demands.
The sale of the properties had not been recorded with the Register of Deeds as of Friday (2-16-24)
Members of Dorchester County Council have said the Pine Hill data center is expected to generate about $2 million a year in new revenue and they have praised Google’s community involvement, including providing free laptops to local schools.
Chances are at some point in your life you’ve heard the phrase, home is where the heart is. There’s a reason that’s said so often. Becoming a homeowner is emotional.
So, if you’re trying to decide if you want to keep on renting or if you’re ready to buy a home this year, here’s why it’s so easy to fall in love with homeownership.
Customizing to Your Heart’s Desire
Your house should be a space that’s uniquely you. And, if you’re a renter, that can be hard to achieve. When you rent, you don’t have much control over the upgrades, and you’ve got to be careful how many holes you put in the walls. But when you’re a homeowner, you have a lot more freedom. As the National Association of Realtors (NAR) says:
“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”
Whether you want to paint the walls a cheery bright color or go for a dark moody tone, you can match your interior to your vibe. Imagine how it would feel to come home at the end of the day and walk into a space that feels like you.
Greater Stability for the Ones You Love Most
One of the hardest things about renting is the uncertainty of what happens at the end of your lease. Does your payment go up so much that you have to move? What if your landlord decides to sell the property? It’s like you’re always waiting for the other shoe to drop. Jeff Ostrowski, a business journalist covering real estate and the economy, explains how homeownership can give you more peace of mind in a Money Geekarticle:
“Homeownership means you are the boss and have the biggest say in your lifestyle and family decisions. Suppose your kids are in public school and you don’t want to risk having them change schools because your landlord doesn’t renew your lease. Owning a home would remove much of the risk of having to move.”
A Feeling of Belonging
You may also find you feel much more at home in the community once you own a house. That’s because, when you buy a home, you’re staking a claim and saying, I’m a part of this community. You’ll have neighbors, block parties, and more. And that’ll give you the feeling of being a part of something bigger. As the International Housing Association explains:
“. . . homeowning households are more socially involved in community affairs than their renting counterparts. This is due to both the fact that homeowners expect to remain in the community for a longer period of time and that homeowners have an ownership stake in the neighborhood.”
The Emotional High of Achieving Your Dream
You’ll be able to walk up to your front door every day and have that sense of accomplishment welcome you home.
Overview of Benefits – Published by NAR
Appreciation. Historically, real estate has had long-term, stable growth in value and served as a good hedge against inflation. Census data shows the median price of a home jumped from $172,900 in Q4 2000 to $417,700 in Q4 2023. That’s greater than 6% appreciation per year on average.
Equity. Money paid for rent is money that you’ll never see again, but paying your mortgage month over month and year over year lets you build equity ownership interest in your home.
Tax benefits. If you itemize deductions on your federal tax return, the U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes (up to $10,000 according to current tax law), and some of the costs involved in buying a home. Be sure to talk to your accountant to see if it’s advantageous for you to itemize.
Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally exclude up to $250,000 ($500,000 for a married couple) of gain without owing any federal income tax. The IRS provide guidance(link is external) on how to qualify for the exclusion.
Predictability. Unlike rent, your fixed-rate mortgage payments don’t rise from year to year. So, as a percentage of your income, your housing costs may actually decline over time. However, keep in mind that property taxes and insurance costs may increase.
Freedom. The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.
Stability. Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.
A home is a place that reflects who you are, a safe space for the ones you love the most, and a reflection of all you’ve accomplished.
Let’s connect if you’re ready to buy or sell a home!
The deserted movie theater located at 2055 Eagle Landing Blvd., within walking distance of Northwoods Mall, in North Charleston is now the future site of the city’s next public affordable housing neighborhood.
The North Charleston Housing Authority recently purchased the 6.5-acre site for $3.85 million. The sale closed in late October.
Jeremy Erling, the housing agency’s executive director, said the group is currently searching for a developer to build “much needed” affordable housing units on the site. Preliminary studies suggested 130 units, but the end count could be higher or lower.
The authority has been on the hunt for a large property since last summer. After a few offers fell through, Erling said that the former theater site was an ideal fit.
The site has been vacant since 2006, when the discount North Charleston Cinema 10 closed. At one time a hotel was planned to be built but it never materialized.
Tax credit: These are dollar-for-dollar reductions on your tax bill. When you claim a tax credit, the amount you owe goes down the exact same dollar amount.
Tax incentive: These encourage taxpayers to do something, like install efficient appliances, in exchange for a tax reduction.
Tax refund: You’re probably familiar with this one already. You’ll get a refund if you pay more in taxes — say, through your paycheck withholdings — than you actually owe.
Tax rebate: These are retroactive tax decreases. Unlike refunds, they can come at any time of year. Rebates are often offered to stimulate the economy, because people tend to spend them immediately.
Tax break: A general term referring to various tax benefits. These could be credits, deductions, exemptions and others.
Tax benefit: Similar to a tax break, these lower your tax liability.
Home improvement tax deduction: Qualifying improvements to your home that qualify for tax deductions.
Most home improvements, like putting on a new roof or performing routine maintenance, don’t qualify for any immediate tax breaks. However, some (known as capital improvements) may raise the value of your home. In that case, you may see a benefit when you sell.
For immediate benefits, check out these incentives that will reduce your 2023 taxes:
Energy efficiency tax credits
Reducing energy consumption saves money and natural resources. The IRA includes multiple clean energy tax credits to help you do both.
Heat pumps: Your air conditioning and furnace are two of the biggest energy users in your home. Switching to an energy efficient heat pump can net you a 30% credit, up to $2,000.
Windows and doors: Replacing leaky doors and windows brings a 30% credit on the cost, up from 10% last year. Credits are capped at $600 for windows and $500 for two doors.
Electrical upgrades: If you need to update your electrical panel to handle new appliances, the government will pay 30%, up to $600.
Home energy audit: To get the most out of these tax incentives, start with a home energy audit. A credit of up to $150 offsets the cost.
Don’t stop there. “[I]incentives on items like solar, energy storage, EVs [electric vehicles] and more are incredibly generous,” says Greg Fasullo, CEO of Elevation, a residential clean technology company.
Installing solar panels gets you a 30% credit. Depending on the size of the project, Fasullo predicts you could save $6,000, based on the average rooftop solar installation cost of $20,000.
Home office tax deduction
Working from home since the pandemic? Fifty-eight percent of American workers are, too, at least part of the time.
If you use a portion of your home exclusively for business purposes, “you may be able to deduct a portion of your mortgage interest, property taxes, and other expenses related to that space,” says Seth Diener, a private wealth manager at Diener Money Management.
The Internal Revenue Service (IRS) has specific rules about what qualifies as a home office, though. If you’re doing Zoom calls from the kitchen table where you eat dinner every night, that doesn’t count. You must have a separate room or area that’s only used for your home office. If that’s you, you can calculate this deduction two ways:
Regular method: Figure out the percentage of your home you use for work. The deduction you can claim is based on this number, and whether your expenses are direct or indirect.
Simplified method: Calculate the square footage of your home office and multiply it by $5 per sq. ft., up to 300 sq. ft., with a maximum deduction of $1,500.
Medical improvements
“If you have medical upgrades that are prescribed by a doctor, such as wheelchair ramps or other accessibility features, these may be deductible as medical expenses,” says Andrew Latham, a certified financial planner and director of content at SuperMoney.com.
The IRS website offers a non-exhaustive list of qualifying capital expenses, including widening doorways, moving electrical devices, adding handrails and grading the exterior.
Note: If the medical home improvement raises the value of your home, the deduction will be based on the difference between the cost of the improvement and the increase in property value.
Rental property investments
Improvements to rental properties fall under a deduction called depreciation.
“Improvements to a rental property are usually considered deductible business expenses,” Latham says. “However, these incentives are subject to specific rules and limits, so it’s advisable to check current tax laws or consult with a tax professional.”
Federal vs. State Home Improvement Tax Incentives
What if you put in that heat pump and got back $2,000 from the federal government? Could you also claim the credit on your state return?
“Yes, in some instances, you can qualify for multiple tax breaks for the same project,” Latham says. “[I]f you install a new energy-efficient heat pump, you might be eligible for a federal tax credit, a state-level incentive, and potentially a rebate from your local utility company.”
Always check with a tax professional for advice as rules and laws change.
The economists at CoreLogic recently released a special report entitled, Evaluating the Housing Market Since the Great Recession. The goal of the report was to look at economic recovery since the Great Recession of December 2007 through June 2009.
One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from December 2012 to December 2017 to show how prices over the last five years have fared.
Frank Nothaft, Chief Economist at CoreLogic, commented on the importance of breaking out the data by state,
“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011. After finally reaching bottom in 2011, home prices began a slow rise back to where we are now.
Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”
The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state.
Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.
Where were prices expected to go?
Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
According to the December 2012 survey results, national homes prices were projected to increase cumulatively by 23.1% by December 2017. The bulls of the group predicted home prices to rise by 33.6%, while the more cautious bears predicted an appreciation of 11.2%.
Where are prices headed in the next 5 years?
Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.
Bottom Line
Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even higher than before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, contact ME!
Ground has been broken for the anticipated retail development in Summerville, Nexton Square.
Nexton Square is a 17-acre site that will feature 140,000 square-feet of shopping and dining. Located on 17A, in Berkeley County, Summerville.
Nexton Square will be in walking/biking distance from Brighton Park Village and a valuable amenity for Summerville. The site will feature a variety of retail and dining with 40-plus restaurants expected to occupy the square. So far, Hall’s Chophouse, Taco Boy, Fuji Sushi, Optical Impressions, Chatime & Ice Cream Café, The Bicycle Shoppe and Diamond Nails are some of the retailers and restaurants that have been announced. Stay Tuned, more information will be available soon!
Real Estate Matters in Charleston SC - Gena Glaze 