Evaluating the South Carolina Land Market

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Evaluating the South Carolina Land Market
By

Bart Waldon

South Carolina is located in the Southeastern United States, bordering the Atlantic Ocean. Known for its beaches, historical charm, and southern hospitality, it has become an increasingly popular destination for both visitors and potential residents looking to relocate. This growth and development has led to an active real estate market across the state, including the land market.

Local Real Estate Market Conditions in South Carolina

When evaluating the South Carolina land market, it’s important to understand the overall real estate conditions across the state. Key factors to consider include:

Population and Job Growth - South Carolina has seen steady population growth over the past decade, with estimates predicting the state’s population to reach over 5.5 million by 2030. Employment opportunities are also on the rise to match, especially in major metro areas like Charleston and Greenville. This influx of new residents and jobs fuels demand for housing and development.

Development Hot Spots - Coastal regions like Hilton Head Island, Myrtle Beach, Charleston and Beaufort are magnets for vacation homes and retirement properties. Greenville, Spartanburg, and Aiken are growing as well. Knowing where development is occurring can help identify potential land opportunities.

Infrastructure Expansion - With the above growth and development comes the need for improved infrastructure. South Carolina has invested billions in recent years into roads, broadband access, utilities, and other critical infrastructure to facilitate expansion. This also enhances land values.

Real Estate Prices - Home prices in South Carolina continue reaching new highs, with 10%+ yearly appreciation in many markets. Charleston saw median home values rise from $315K to $381K from 2020-2022. Land prices follow suit.

Understanding these key real estate factors provides critical context when researching the South Carolina land market.

How To Evaluate Land Parcels in South Carolina

When researching a specific land parcel in South Carolina, there are several key factors savvy land investors consider:

Location

As with any real estate, location plays a pivotal role in land value. Proximity to major metro areas, tourist destinations, highway access, and other infrastructure are huge value drivers. Also consider adjacency to existing housing, schools, retail centers, etc. Prime locations demand higher prices per acre. Those off the beaten path will trade for less.

Zoning, Entitlements & Development Potential

Understanding how a land parcel is currently zoned, what future entitlements allow, and the potential for commercial or residential development is critical. Land zoned for denser development—like multi-family housing—often commands significantly higher values than raw, unzoned acreage.

Access, Shape & Topography

Does the parcel have road frontage or access? How easily can utilities be run to the site? Is the topography flat and properly graded for building? Irregular shapes and lands with wetlands or steep slopes will limit usable area and require expensive prep work. These factors impact cost and buildability.

Condition & Usage

Undeveloped lands with no prior usage are most desirable. Contaminated sites, former landfills, mining areas, etc. can require substantial environmental remediation before development. Understanding this land history is vital.

Comps & Market Data

Researching the sales histories and current asking prices for comparable land parcels will help benchmark value. Market data gives realistic estimates of what buyers have recently paid. Significant deviations above/below comps warrant further inspection.

Analyzing all these attributes will allow an informed negotiation and fair market price assessment when evaluating land deals.

Key Factors Impacting the South Carolina Land Market

In addition to location-specific parcel details, several macro-level trends influence land values and deal velocity across South Carolina:

Demographic Tailwinds

South Carolina is benefiting from major demographic shifts driving real estate demand. First is the Baby Boomer retirement wave, as seniors cash out of Northern states and resettle looking for affordability, warm weather and golf course living. Families are also relocating here given the still-lower cost of living compared to other regions.

Millennials now represent the largest portion of homebuyers in South Carolina. With that comes demand for townhomes, starter homes, and walkable mixed-use developments. These demographic segments all spur demand for land.

Constrained Housing Inventory

While population and employment rises steadily across South Carolina, housing inventory has failed to keep pace. There is now a decade’s long under-supply of homes for purchase or rent—especially affordable options. This motivates developers to acquire new land parcels for residential construction.

Ongoing Investment Appeal

South Carolina markets like Charleston, Greenville and Myrtle Beach have seen skyrocketing home price appreciation and compressed rental yields. Investors priced out now look to smaller metro areas and tertiary markets to find more attractive returns. This spurs land buying activity in up-and-coming areas.

These factors create the perfect storm for high land demand. And growing value.

Navigating the Complexities of Land Transactions

However, for the average homeowner or individual not familiar with development practices, the land buying and selling process can be very complex. There are months of due diligence, complicated financing, zoning approvals, utility connections and ownership transfers to navigate. Not to mention accurately determining property valuations.

Selling land entails extensive marketing efforts across digital listing sites, print publications and yard signage before finding an interested buyer. Even then, only 1-2% of real estate buyers search for vacant land. This inventory can take 1-2 years to sell in South Carolina, despite vibrant market conditions.

This is why specialized land companies and investment firms are increasingly active buyers in South Carolina and other high-growth states. Companies like Land Boss possess the expertise to appraise land accurately, move quickly to buy sites without traditional bank financing, and assume the carrying costs until development. Selling land for cash to such companies offers landowners a faster, simpler exit strategy.

Outlook for the South Carolina Land Market

Given the strong population and economic growth forecast across South Carolina over the next decade, both Metro and rural land markets will continue benefiting. Retirees cashing out of Northern states, millennials forming households, and investors seeking groups should keep land demand vibrant.

Short term, inflation concerns, rising interest rates and recession fears may cool the sales pace. Values should continue rising, however more moderately. We predict South Carolina land prices to appreciate 5-10% annually over the next five years. More affordably priced rural and tertiary markets will likely outperform coastal resort areas, as the boom times drive buyers inland.

In such dynamic local market conditions, relying on a land specialist can help sellers accurately price and market land parcels to maximize value. For those seeking a swift and certain cash sale, selling to an investment firm like Land Boss also remains an option sans the wait.

Staying abreast of population and employment trends, infrastructure expansion plans, and demographically-fueled housing demand allows land investors to pinpoint emerging geographic opportunities. With South Carolina seeing no slowdown in migration and development activity, the land market looks poised for stability and appreciation for years ahead.

Final Thoughts

With idyllic beach towns, vibrant upstate cities, and charming Southern hospitality, it’s no mystery why South Carolina remains such an alluring destination for new residents and real estate investors alike. This influx of people and capital has created a thriving land market right now across the state, spanning major metros like Charleston and Greenville to more rural economies. However, accurately valuing land parcels relies on carefully analyzing factors like location, zoning, access, comparables, and understanding the demographic drivers fueling housing demand. Actually transacting raw land can also prove complex without an expert real estate professional well-versed in land deals. Sellers aiming to exit land ownership swiftly may opt to work with specialized land buying companies like Land Boss too. We foresee South Carolina's land market prospering thanks to bullish population growth and economic expansion, especially in smaller tertiary cities as buyers shift inland seeking affordability. Savvy land investors who properly underwrite deals given local market dynamics stand well-positioned to capitalize on this upswing in the years ahead.

Frequently Asked Questions (FAQs)

What parts of South Carolina are seeing the most land development? 

The coastal regions like Charleston, Hilton Head Island, Beaufort, and Myrtle Beach are magnets for vacation home and retirement community development. Upstate areas like Greenville, Spartanburg, and Aiken are also growing rapidly.

How much does vacant land cost per acre in South Carolina? 

Land prices vary dramatically based on location and zoning/entitlements. Raw, undeveloped land can trade from $2,000-$5,000 per acre in rural areas and up to $100,000+ for an acre in prime coastal zones. Land permitted for denser housing development demands the highest values.

How can I estimate the value of a land parcel in South Carolina? 

Research prices paid for comparable vacant land sales nearby to benchmark value. Adjust for property differences in acreage, road access, zoning, etc. Also account for wider market conditions and growth trends in that local area. An appraiser can formally assess value too.

Should I sell my South Carolina land myself or use a land company? 

Attempting a FSBO (for sale by owner) land deal requires substantial marketing efforts. Just 1-2% of homebuyers view vacant land, so selling solo takes 1-2 years typically. Land companies like Land Boss purchase land directly at discounted prices, providing sellers a quicker and simpler cash sale.

Will land values continue rising across South Carolina? 

Driven by rapid population growth and private/public investment, we forecast South Carolina land appreciation of 5-10% annually over the next 5 years. More affordable rural/small metro markets should outperform pricier coastal cities as buyers shift inland.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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