SC has a more overvalued housing market than CA and NY, new study shows. Here’s why
South Carolina has the fourth most overvalued housing market in the U.S. this year, a new study shows.
According to the analysis from Moody’s Analytics, South Carolina home prices are 37.33% over their fundamental value. Higher than 10% is considered overvalued, while 20% higher is considered extremely overvalued, the analysis states.
In comparison, the study estimates that national median home prices are about 15.7% above their fundamental value. Meanwhile, markets in states like California and New York are deemed undervalued — with California at at -1.81% and New York at -1.65%.
But why is this the case?
Why SC housing market is overvalued
The analysis considers factors such as household formation rates, construction costs and where home prices stand compared to median incomes. Over the last couple of years, home prices in South Carolina have continually skyrocketed, far outpacing income.
According to Redfin, the median home sales price is currently $370,500 in South Carolina, up 3.2%, year-over-year.
A recent analysis by Redfin shows that in a city like Charleston, a resident would need to earn $112,231 a year to afford a home in 2023 — a 17.9% jump from a year ago.
According to current U.S. Census data, $58,234 is the median household income in South Carolina.
And while housing prices have jumped in other states too, such as California, income growth has kept up at a relatively better pace than in states like South Carolina, the Moody analysis shows.
10 states with most overvalued housing markets
Idaho: 41.87%
Tennessee: 40.81%
North Carolina: 37.66%
South Carolina: 37.33%
Georgia: 32.92%
Indiana: 32.39%
Arizona: 30.08%
Nevada: 29.79%
Hawaii: 29.63%
South Dakota: 29.02%
10 states with most undervalued housing markets
Maryland: -9.17%
California: -1.81%
New York: -1.65%
Illinois: -0.78%
Alaska: 2.37%
West Virginia: 3.79%
Pennsylvania: 4.74%
Delaware: 5.26%
Mississippi: 6.54%
Connecticut: 6.92%
10 SC metros with fastest growing median home sales prices
Litchfield Beach: $540,000/ 44% year-over-year
Bluffton: $620,000? 35.1% year-over-year
Beaufort: $395,000/ 31.2% year-over-year
Fort Mill: $640,000/ 29.8% year-over-year
Charleston: $589,990/ 20.1% year-over-year
Red Hill: $321,000/ 19.4% year-over-year
Fountain Inn: $368,450/ 18.9% year-over-year
Five Forks: $515,000/ 14.8% year-over-year
North Augusta: $289,900/ 11.5% year-over-year
Mount Pleasant: $812,500/ 11.8% year-over-year
