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Folly Beach Long-term rental

While there are many issues on Folly Beach that need to be addressed, the topic of Real Estate remains a big topic of discussion and I felt it important to address some of the information being presented during the campaign.

2020-2022 Witnessed a Historically High, Bubble-Driven Market


In August 2020 Median Sales Price was $707,500.
In August 2021 Median Sales Price rose to $1,135,000
In August 2022 Median Sales Price rose to $1,950,000

To understand the current market, it is important to pull back and look at the trends and economic conditions leading up to 2023. The Median Sales Price for a house on Folly Beach in August 2019 was $622,000. In August 2023, that number was $1,100,000. A 76.88% increase! If we take that back to 2013, this increase rises from $572,000 to $1,100,000. A 92.31% Increase!

source: Folly Beach market, CTAR and MLS data.

Comparing today’s Folly Beach real estate prices against a historically high market leads to skewed conclusions. When you evaluate a more realistic investment time-frame, Folly Beach real estate exhibits incredible returns. Simply put, comparing against an outlier is not a good way to evaluate an any investment.

Comparing against an outlier is not a good way to evaluate an investment

I will concede that the Median Sales Price of a house on Folly has fallen in the past year. But it is important to see that this decrease follows historically high real estate prices on Folly Beach during the bubble of 2020-2021. To expect prices to continue to rise at that rate is completely unrealistic; especially given that interest rates are now at a 20 year high.

What We are Seeing Now is Simply a Correction: The Real Estate Market has Changed in 2023

Investors Are Buying Roughly Half as Many Homes in 2023 as They Were a Year Ago….Investors pulled back from single-family homes more than condos and townhomes, and high-priced properties more than low-priced properties.

redfin.com

High home prices and high mortgage rates have sidelined many would-be buyers.

Greg McBride, Bankrate Chief Financial Analyst

Contrast 2023 Market Correction to 2020-2022 Bubble

Again, it is important to see that the decrease follows historically high real estate prices on Folly Beach during the bubble of 2020-2021. Consider these realtor comments and statistics from 2020, commonly known as the height of the Pandemic Bubble and it’s easy to see that the overall real estate market has changed significantly:

These graphs from a local Folly realtor demonstrate the dramatic rise in million dollar home sales during the 2020 Covid bubble.

2020 Saw 35 sales over $1M, So Many The Author Split the Category in Two

2020-folly-beach-home-sales
Note the Huge Increase in Million Dollar Sales in 2020

Again, Comparing against an outlier is not a good way to evaluate an investment.

Moving Forward

Once you look at the data, it is clear that the 2020-2022 market data represents an inflated benchmark and that larger market forces are responsible for the current downturn of the real estate market on the island. Simply blaming the STR cap only promotes more division and does not acknowledge the bigger market dynamics are at play.

Many have asked me how Folly Beach can move forward on the STR issue. My response this that we need to stop looking back.

It is time to focus on the issues that improve our community and promote livability on the island:

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