By Erich Hartmann
“Real Estate Always Goes Up!” and “Housing is the American Dream!” were the two famous slogans that nearly broke the world in 2008. Now we have another mantra driving housing market mania: “Housing Crisis!”
Yes, housing is overpriced right now, and that sucks for most people. But it’s certainly not a “crisis,” and we do ourselves no favors by pretending it is. Overreacting may feel righteous, but it’s also how we make really bad decisions.
If we want to have an honest, productive conversation on this important issue, we must first acknowledge and understand how prices across the nation have become so expensive in the first place: over a decade of artificially low mortgage rates, massive inflation from COVID-era money printing, lingering supply chain issues, and ever-rising taxes, fees, insurance, tariffs, and energy costs. It’s a perfect storm of stupid.
But “expensive” is not the same thing as “scarce.” And, despite the hype, our current housing inventory is actually pretty normal, even here in Beaufort.
In addition to the thousands of new apartments and homes coming online soon in the city and county, additional factors are also continuously adding to our supply. AirBnBs are being converted back into long-term housing as the Short Term Rental boomlet cools. The FHA is propping up delinquent loans that will soon flow back into the market as foreclosures or resales. Aging Baby Boomers are downsizing or, unfortunately, passing away, freeing up homes and apartments. On top of that, stricter immigration enforcement and deportations are opening up lower-end units. When you put all of this together, it becomes clear that our problem is not a lack of housing. It’s price.
So what to do about these sticky prices? Well, the newest idea floating around D.C., declaring a “National Housing Emergency,” would be counterproductive, to put it mildly. It would flood the market with more subsidized financing, gimmicks, and/or another round of dirt-cheap rates, which would undo all the price progress currently being made. We also already tried that for 15 years, and it caused a lot of the problems we’re dealing with now, so do we really want to repeat those same mistakes just as the market is finally beginning to heal?
At the core of all this is the fact that vested interests need the illusion of a “crisis” to justify building more and charging more. They don’t really care whether “more” is actually needed or not. And they will always resist falling prices tooth and nail because that means less profit and tax revenue for them. To be clear, that’s a perfectly understandable and very human motivation, but it’s our responsibility as a community to be aware and honest about those inputs.
The good news is we are finally in the midst of a natural market correction, even here in Beaufort. Housing is like an aircraft carrier; it doesn’t turn on a dime, but it is drifting in the right direction. National home values grew only 1.3% year-over-year in August, well below inflation. And rental prices are falling nationwide, -0.31% month-over-month in October, marking the steepest October decrease in over 15 years, with year-over-year rent growth slowing to just 0.8%. This is a good thing, and we need to allow it to continue.
None of this means we should “build nothing” or “stop growth” in Beaufort. That is a straw man argument repeated by unserious people. But it does mean we should do a better job of managing our future. We need to pay more attention to other locales’ bad decisions, learn from our own past mistakes, and proceed cautiously instead of panicking and blindly trusting big builders and their consultants to “save us.”
We must let this natural housing correction play out and keep our national and local policies steady so prices, rents, and inventory can find their natural balance. That’s how we create true “affordable” and “workforce” housing.
Above all, we must protect Beaufort from the overdevelopment and glut that has ruined so many other once-great communities (with the best of intentions, of course). Our small, unique area simply cannot absorb the avalanche of new units already approved, much less the thousands more proposed. These high-density eyesores are not only being built on our fragile marshes, they are being built on lies.
We must find ways to reduce the size of these incoming projects or cancel them altogether. We also need to find the courage to begin downzoning properties and stop the one-way ratchet of zoning maximization. It’s time to end the destructive inevitability of overdevelopment.
There’s another slogan politicians and powerful interests love to recite, and that is “Never let a crisis go to waste.” But when everything is a “crisis” … nothing is.
Erich Hartmann is a creative director, brand strategist, and writer. He lives in Beaufort with his wife and two sons.
