The Charleston region’s housing market will continue an upward trend of sales and values this year as long as local job growth continues.
Local home sales are rising again as inventory levels are dropping, putting upward pressure on prices.Closed sales 2012 10,5082011 9,2752010 8,7622009 8,3362008 8,988Inventory of homes for sale2012 5,7782011 7,3012010 8,7222009 9,4522008 10,254Source: Charleston Trident Association of Realtors
That was the forecast by Joey Von Nessen, a research economist at University of South Carolina’s Moore School of Business. “It will be on par with what we saw in 2012 ... even through the housing market is coming back, we still have market uncertainty and the payroll tax cut will have an effect,” he said. Von Nessen and economist Steve Slifer of Charleston-based NumberNomics shared similar outlooks for the year ahead at the Charleston Trident Association of Realtors home sales conference Tuesday.
The association reported 10,574 homes changed hands in 2012, the most since 2007, when 12,921 homes were sold. The region’s median home price climbed to $190,065 last year, nearly 5 percent higher than 2011. It remained about 9 percent off the comparable figure of $207,850 for 2007.
Housing experts have said the combination of falling prices, low borrowing costs and the mending economy have driven home sales higher.
Slifer predicts 30-year mortgages rates will fall to 3 percent this year, even lower than 3.4 in 2012.
Von Nessen said home sales have already bottomed out, which will nudge the market along.
“A lot of buyers were on the fence because nobody wants to get an asset that will depreciate in the short term,” he said. “This can move people off the fence.”
He and Slifer said job growth will ultimately push more home sales this year, but there could be some hiccups based largely on how the federal government deals with the debt limit issue in the coming months.
The budgets talks have given employers another reason to be reluctant about hiring, they said.
“Why would you want to hire somebody if there is a chance, however remote, that the economy may go into a recession in a couple of months. So you hire some temps and work existing workers longer hours,” Slifer said. “There’s a lot uncertainty and that has been holding back employment and holding back investments, and I think a lot of it has to do with this budget stuff.”
South Carolina ended 2012 with an 8.4 percent jobless rate, down 1.2 percentage points from 2011.
Sluggish job growth has stalled household formations, which, in turn, affects demand for residential real estate and the spending that creates, Von Nessen said.
“These are households that haven’t been formed but eventually will once there’s job growth when they can attain a position they haven’t had before,” he said.
Von Nessen said Charleston is one of the best places to be in the state, citing employment gains in manufacturing, such as the jobs created by the Boeing 787 plant. He also noted that construction hiring is finally coming back, as builders get to work on new homes and other projects.