New homes spurt driving up Charleston area housing totals
Joseph Von Nessen (right), economist with the University of South Carolina, talks with a home building proponent after his talk.
Area real estate prices and sales through the end of 2017 can be likened to “same song, second verse” — but a catchy tune all the same.
That’s the outlook from a top financial watcher and local new homes specialist, speaking to the Charleston Home Builders Association last week.
“We expect the second half of the year to be very comparable to what we’ve seen in the first half,” says Joseph Von Nessen, economist with the University of South Carolina Moore School of Business. The results are not bad, showing a 2 percent growth rate. But the pace failed to accelerate. “There’s no big industry breaking out,” he says.
Another economic holdup surrounds the tight labor market, which is “constraining (businesses from) getting to the next level,” Von Nessen says. The job shortage impacts skilled and unskilled workers.
A dropping jobless rate down to 4 percent in South Carolina bids up wages as workers become increasingly in demand. Average hourly earnings rose 1.2 percent statewide in the past year.
Wages are particularly strong in the Lowcountry, climbing 9.3 percent in the past year from $23.35 an hour in June 2016 to $25.53 this June. “The bottom line is the Charleston market is booming, leading the state,” he says.
A key indicator that Von Nessen cited stems from the Federal Reserve Bank of Philadelphia listing states with the highest anticipated growth. “South Carolina is consistently in the top 10,” he says, adding that the state is on “solid footing the rest of 2017.”
Von Nessen and Will Jenkinson, broker-in-charge of Carolina One New Homes, were upbeat in presenting home builders with the latest figures on the local and state economy and housing market.
“What a difference a few years will make,” Jenkinson says.
The Charleston area real estate market gradually recovered from the late 2000s recession and housing slide, but it wasn’t until the past two or three years that home sales and prices rallied.
Among the recent highlights:
Forecasters are predicting 21,000 new jobs in the Lowcountry.Unemployment should fall to 3.3 percent locally by the end of next year.Real estate sales up 10 percent through 2017.Prices rose 2.5 percent this year, and 3.5 percent in 2018.Multifamily permits including apartments, townhomes and condos.
Home sales shot up noticeably this year, Jenkinson says, noting that the 1,987 deals closed at a $260,000 median price in greater Charleston was the highest figure in the history of the local Multiple Listing Service. The numbers compared with 1,936 house sold at $250,000 midpoint a year earlier.
The new homes broker also zeroed in on pending sales, a “pulse of the market” listing properties under contract or otherwise really to finalize. Around 3,200 house sales are pending, with 32 percent of them newly built homes. New homes account for one-third of the market now, with Berkeley County the highest rate at 40 percent, Dorchester County at 24 percent and Charleston County at 18 percent. Nationally, one in four homes are new construction, he says.
Even with the new homes growth, tight inventories are holding down the market. There are 5,200 homes for sale on Charleston Trident MLS. “This is about a three-month supply. Based on demand, it should be six months,” Jenkinson says. Meanwhile, the resale market has fallen below 4,000 houses for sale, he says.
New home are pricier today, Jenkinson says. In June, the area had a near record closing total of 434 homes at an average sales price of $333,000. The last time June had as high a figure was 2005, with 445 sales. The average price, though, was $236,000.
“A lot (of the increase) has to do with the cost of lots and development,” Jenkinson says.
In reflecting on the “hot spots in home building,” Jenkinson pointed to one county in particular. “The bull’s-eye is on Berkeley County,” he says. Cane Bay posted more than 500 permits last year, leading a group of large communities in the works.
Afterwards, home builders were generally pleased about the real estate outlook. “I think the biggest problem we have now is the labor (shortage),” says Tori Stein, HBA president. But overall, “Everything is going fabulous for us. (Charleston) is a great place to be.”
For more information and photos, go to www.postandcourier.com/business/real_estate/jim-parker. Reach Jim Parker at 843-937-5542 or firstname.lastname@example.org.