South Carolina is at the center of the Southeast’s ongoing population boom, attracting buyers from across the country with its lower taxes, strong schools, and recreational amenities. The Columbia-Lexington area highlights this trend, where luxury homes are selling as quickly as entry-level properties, defying the national slowdown in high-end real estate.
Wendell Arsi, founder of the Arsi Home Group, covers the entire state and brings a perspective shaped by a career spanning the Marine Corps, mortgage lending, and real estate sales. Since 2019, his team has closed over $72 million in transactions, averaging 50 to 100 sales annually.
Geography and Lifestyle
Central South Carolina’s location is a major selling point for relocating buyers. Positioned in the middle of the state, Columbia offers easy access to both the mountains and the coast, each about two hours away. The greater Columbia area has a population of roughly 600,000 and benefits from Lake Murray, a 19-mile-long reservoir that anchors the region’s luxury waterfront market. The area’s appeal goes beyond recreation; as the state capital, Columbia offers a range of cultural events and is within a short drive of cities like Charleston and Asheville.
This central location has made the region a magnet for newcomers from across the country. Arsi notes that clients are moving in from states such as Oregon, California, New Jersey, New York, and Virginia, seeking both lifestyle improvements and financial advantages.
Tax Policies Fuel High-End Demand
South Carolina’s property tax structure is a key factor drawing affluent buyers. Taxes on a $1 million home are about $5,000 per year — far lower than in many other states, where annual property taxes can exceed $20,000. With income tax rates capped at 5.5% or less, these tax savings make a significant difference, especially for luxury buyers.
This favorable tax environment is reflected in current buyer behavior. Roughly 22% of buyers pay in cash, bypassing financing and making interest rate volatility less relevant for the luxury segment. For homes priced at $750,000 and above, cash offers are common, and high-end properties often sell faster than lower-priced homes, a reversal of typical market patterns.
Seller’s Market, with Signs of Moderation
Even as other states see housing markets cool, South Carolina remains a seller’s market, though conditions are gradually balancing. Arsi explains that while sellers still have the upper hand, buyers are starting to see more concessions and deal opportunities.
The average time a home spends on the market has increased to about 70 days, up from the 20 to 30 days typical during the pandemic, when inventory was extremely limited. Despite this increase, homes still sell much faster than in many other parts of the country. The speed of transactions means buyers who find a desirable property must act decisively; waiting often results in missing out, as homes rarely last more than two weeks on the market.
Changing Buyer Preferences
Pandemic-era shifts continue to shape what buyers want in a home. Demand for dedicated home offices remains high as more people work remotely. Millennials, in particular, are seeking smaller, low-maintenance homes that allow them to travel and avoid large mortgage payments.
Multi-generational housing is another growing trend in South Carolina. Families are pooling resources to purchase larger homes with separate living areas, allowing grandparents, parents, and children to live together. This approach enables buyers to afford more spacious, higher-quality properties and is especially common in the state’s fast-growing markets.
Infrastructure Strains
South Carolina’s population boom is straining local infrastructure, impacting both residential development and public services. Builders face significant delays as they struggle to keep pace with demand. Arsi notes that the time from land acquisition to breaking ground on new homes can stretch to a year due to slow permitting processes and limited infrastructure capacity.
School construction highlights the pace of growth. The region is adding one new elementary school each year, a new middle school every two years, and a new high school every three to four years just to keep up with the influx of families.
Investment Landscape
For investors, South Carolina presents attractive opportunities — particularly in acquiring land tracts between 25 and 200 acres for development. However, Arsi cautions that the state’s tax policies are less favorable for those purchasing second homes or investment properties. Taxes on non-primary residences are significantly higher, which can erode returns for one-off investors.
Despite these hurdles, rental market fundamentals are strong. In many cases, it is more affordable to buy or build a home than to rent, supporting steady demand for both owner-occupied and rental properties.
Steady Price Appreciation
Unlike many parts of the country where home values have plateaued or declined, South Carolina continues to see steady appreciation. Arsi reports that homes in his area are rising in value by 5% to 10% annually, down from the extraordinary 20% to 30% jumps seen during the height of the pandemic, but still well above national averages.
For property owners, this means tangible equity gains. A $200,000 home, for example, can increase by $10,000 to $20,000 per year—an attractive alternative to more volatile investment options like the stock market.
Market Outlook and Opportunities
South Carolina’s real estate market remains resilient heading into 2026, supported by strong migration, lifestyle appeal, and relatively low taxes. Demand continues to be driven by buyers relocating from higher-cost states, while sellers benefit from short listing times and steady appreciation.
Looking ahead, Arsi expects mortgage rates — currently around 5.675% to 5.875% for 30-year fixed loans — to gradually decline, potentially reaching the low 5% or even high 4% range. A drop in rates could trigger another wave of buying activity across the state.
While challenges such as infrastructure constraints and higher taxes on investment properties persist, opportunities remain strong in rental housing and land development. With migration continuing and market fundamentals holding steady, buyers and investors who act decisively and plan strategically are likely to find favorable conditions in the year ahead.
