The last recession hit the home-building business hard, but demand for newly constructed residences is recovering as the economy rebounds, experts said today.
“Things have certainly turned around,” said research economist Joey Von Nessen of Columbia-based RESH Marketing Consultants Inc.
Von Nessen noted that the Charleston region was recently ranked by the Milken Institute as the ninth highest in the country based on its post-recession growth in three key employment categories.
“This is very good news for Charleston homes sales,” Von Nessen said at the Charleston Home Builders Association’s annual market outlook for newly built homes.
He also pointed out some potential trouble spots for the industry. Those include a slowdown in local job growth, the 2 percent payroll tax hike that took effect this year, the impact of budget cutbacks on federal employees and the prolonged recession in Europe.
Also, interest on mortgages is edging higher, though the average remains low by historic standards at around 4 percent for a 30-year loan. Will Jenkinson, broker-in-charge of Carolina One New Homes, said the recent uptick in rates is “a double-edged sword,” but for now ”it’s a positive,”
“It’s beginning to bring buyers off the sidelines, off the fence, to make purchases,” said Jenkinson who also spoke at today’s outlook.
Meanwhile, prices continue to rise because inventory has been dropping.
About 5,600 homes are on the market, representing a five-month supply, or how long it would take to sell all of them based on recent sales trends. A year ago the region had an eight-month supply.
Jenkinson said new homes account for about 30 percent of all sales in the tricounty area.
Demand for existing homes also is on the upswing.