Senatory Poll
Pier Goodmann
PARTY SECRETERY
[totalpoll id="1868"]
Vote Now
Folly Beach Long-term rental

A common refrain from those opposing the Short-Term Rental Cap on Folly Beach is that the Cap has somehow lowered home values.

The rules and STR limits defined by the ordinance passed in February are in place because the community wishes to protect the balance of full time residents and short term rentals. Once you look at the data, it will be clear that the STR Cap has had a negligible effect on the overall Folly Beach Real Estate market and that larger market forces are responsible for the current real estate market on the island.

Communities impacted as neighbors are replaced with a revolving door
of strangers

The Cap is in place simply to insure that a viable long-term community continues to thrive. It is time to move past the STR issue and focus on the issues that improve our community and promote livability on the island:

  • Enforcing STR Rules and Regulations
  • Enacting a wait-list for STR Licenses
  • Exploring ways to expand long-term rental opportunities on Folly

Want to learn more? Take a closer look at the real estate data for the Folly Beach real estate market and see how it has always experienced fluctuations. Furthermore, a look at recent home sales shows that despite a historically slow national real estate market, sellers on Folly Beach continue to see incredible returns on their property sales.

The median sales price of a home on Folly Beach increased by approximately 131.9% from 2019 to 2022.
Source: https://www.movoto.com/folly-beach-sc/market-trends/

Folly Beach Real Estate Price Trends

Putting Historical Data Into Perspective

The idea that real estate prices are falling in 2023 is correct. However, it has little or nothing to do with the implementation of the STR Cap and more to do with larger market factors:

  • In 2019 the median sales price of a home on Folly Beach was $657,617. In 2022, that number was $1,524,512. To expect prices to continue to rise at that rate in completely unrealistic.
  • People are using the past few years as their pricing benchmark; particularly 2020.

Consider these statistics from 2020, commonly known as the Pandemic Bubble:

  • Folly Beach real estate sales were over 30% above their previous best year
  • Demand was off the charts and home inventory at record lows. This set up huge price gains as buyers competed over a record small amount of listings
  • The average mortgage rate was 3.10%

Currently, the United States real estate market is facing significant headwinds from several market factors and Folly Beach is not immune to their impacts:

  • The national average 30-year fixed mortgage rate was near 7% at the beginning of August
  • All major U.S. regions are experiencing year-over-year sales declines
  • Nationally, existing-home sales are down by 18.9% from one year ago.
  • Mortgage originations are at their lowest since the second quarter of 2014
  • Companies are beginning to call employees back to the office, which impacts the demand for Folly homes
  • The rapid increase in house prices has made homes unaffordable for many, naturally reducing demand.

Clearly, the Folly Beach real estate market is vastly different in 2023 than it was it 2020. When you combine interest rates that are almost twice as high with inflated home prices, it is easy to see that our real estate market was primed for a correction. This type of correction is nothing new, the average home price dropped 14.1% in 2019, only to rise over the next few years.

Additionally, if you look closely at recent house sales, you will see that sellers are still seeing huge profits from their Folly properties.

Recent Transactions Reflect Incredible Returns on Investment

113 W Erie Avenue
3/8/2021 Sold $600,000
5/24/2023 Sold $800,000
List: $865,000
ROR: 33%

402 E Indian Avenue
8/19/2013 Sold $1,080,000
8/4/2023 Sold $2,995,000
Listed for $3,950,000
Rate of Return 177.31%

917 E Arctic Avenue
7/7/2023 Sold $2,250,000
2015 Sold $825,000
Listed: $2,450,000
ROR: 172.73%

Source: c21charlestonrealestate.com

Top Related Post

Leave A Comment

X