Residential Real Estate Booming and Big Economy and Home Market To Continue Surging Through 2017
Apr 04, 2017 01:53PM
● By Makayla Gay
By L. C. Leach III
Photography By Greenville Headshots
Pick any area of South Carolina – Upstate, Midlands, Lowcountry, or coastal areas. Then pick any facet of the housing market: condos, townhomes, apartments, suburban neighborhoods, million-dollar properties, or just open acreage with possibilities for development.
Whether you’re a buyer, seller, realtor, builder, developer, or just someone with a developable piece of land, the residential real estate market throughout South Carolina is booming, broad, and big – with indications of staying that way for a long while to come.
“South Carolina’s economy is on solid footing,” said Dr. Joseph Von Nessen, University of South Carolina business school economist, during a residential market update presentation before nearly 600 state realtors on Jan. 18 at Trident Technical College. “And home sales throughout the state should continue to do well in 2017.”
The state’s economy is one key factor to this market.
For example, since opening the first of three new facilities in 2011, Boeing South Carolina in Charleston has increased its number of employees from 800 to more than 7,500 in only six years.
Volvo and Mercedes have also announced significant investments in the Charleston region.
In Greenville, Clemson University’s International Center for Automotive Research has created 770 on-site jobs since 2012, with plans to expand in the future.
And in Richland County, which encompasses Columbia, Pure Power Technologies, Inc. announced in 2016 plans to expand its existing operations in Richland County with 79 new employees and $15 million in new investment.
“Markets are cyclical,” said Meghan Byrnes Weinreich, marketing and communications director with the Charleston Trident Association of Realtors® (CTAR). “And they are highly dependent on outside economic factors like consumer confidence and the jobs market.”
With these economic factors in place, here is a look at how the state’s three principal residential real estate markets have recently fared:
The Greater Greenville Association of Realtors (GGAR) recently reported that between January and October 2016, 67,452 homes sold in all of South Carolina.
Of this number, more than 18,600 units were sold in the combined greater Greenville, Spartanburg and Western Upstate regions, a 7.3 percent increase from 2015 year-to-date.
“And we’re now up to eight percent ahead of where we were in 2015 in units sold,” said Nick Sabatine, CEO of GGAR. “And the popularity of the downtown area, whether for rentals, condos, or townhomes, has taken off.”
He added that the average sell time for a residential home or property has also continued to improve.
“In 2015, the average time that a residential home or property stayed on the market before a final sale was 76 days,” Sabatine said. “Now it’s only 62 days.”
Factors contributing to the GSA real estate boom include low inventory, low interest rates, available money to lend to homebuyers – and the almost equal balance of a buyer’s and seller’s market.
“Every kind of residential unit, be a home or a rental unit, is in growing demand, regardless of price tag,” Sabatine said.
He added, for example, that prices for a single-family home in downtown Greenville have shot up in recent years, rising to a range of $750,000 to $1 million.
And apartments now have an average price tag around the equivalent of a house payment – often starting above $1,100 per month, depending on location.
“But despite the prices, people are buying them,” Sabatine said. “And I’m not expecting that trend to go away anytime soon.”
Columbia and the Midlands
In the Midlands, the state’s healthy real estate market is in sharp contrast to the economic downtown of almost 10 years ago.
The Central Carolina REALTORS Association (CCRA) in Columbia recently released information showing that 2016 just eclipsed 2007 as the area’s most successful real estate sales year in its history, with 13,467 residential units sold.
“It’s a total reversal of our worst year in 2011, when sales were barely half that number,” said CCRA member Todd Beckstrom of ERA Wilder Realty, Inc. “And consumer confidence is soaring to the highest rate since 2004.”
One reason for such confidence is low interest rates, which are now hovering around 4.25 percent – and national market analysts predict them to reach no higher than 4.75 percent by year’s end.
And in the eight Midlands counties represented by CCRA, the market as a whole currently has 6.23 months of inventory, which means the buyer/seller aspect is in almost perfect equilibrium.
“And we expect this market to continue for a while,” said Stuart Reynolds, CCRA board member and broker-in-charge with ERA Wilder Realty, Inc. “The only factor that could slow sales is lack of inventory.”
Beckstrom added that for buyers who cannot find what they want among existing inventory, part of his job is to understand what they want and why, “so I can get them to the best new properties first.
“Realtors used to just be keepers of information, but now Internet buyers and sellers have access to most of the same information I do,” he said. “So my role has shifted to that of a market expert. I can interpret mountains of information, and add local knowledge so that people can make informed decisions whether they are buying or selling. Being their local market expert is now key.”
The dream of owning a home in Charleston is more evident now than in antebellum days.
Based on recent regional data from the Charleston Trident Association of Realtors® (CTAR) 1,029 homes sold in January 2017 at a median price of $238,900. To compare, in January 2016, 972 homes sold at a median price of $218,020.
Comparing the first month of 2017 to January 2016, sales volume has increased 6 percent and CTAR buyers are paying 9.5 percent more for homes in the region.
“This marks the twelfth consecutive month that sales in the Charleston region have surpassed 1,000 homes, and the first time in a decade that January sales have exceeded that benchmark,” Meghan Weinreich said.
She added that while inventory has declined about 20 percent since January 2016, with only 4,746 homes listed for sale, “We expect that inventory will begin increasing slightly in the coming months.”
CTAR ended 2016 with 17,785 home sales – almost as many as in 2005. Through March 2017, median home prices have held at a level of $240,000 for the region.
“We are pleased to see the residential market starting on such solid ground in 2017,” said current CTAR president Dave Sansom. “We’re poised to see another year of consistent growth in our market, supported by the flourishing local economy.”
One variable, however, that will most likely continue to fluctuate in any kind of future market is buyer preferences.
Weinreich, Sabatine and Beckstrom all said that while construction of the ranch style house was prevalent in 1950s and 1960s, today’s buyers want open layouts with lots of space, central heating and air conditioning, kitchens with updated appliances, large closets with more storage, and the electrical infrastructure to handle the growing phone and computer technology.
“In the years to come, that will likely be a growing trend,” Weinreich said. “Technology-based homes with the ability to monitor and control your home from afar will continue to grow in favor among buyers, particularly as the Millennial generation begins buying homes.”