Economists offer rosy outlook for Lowcountry’s 2014 housing market
The Charleston region’s housing market will continue to put up higher sales numbers in 2014, but not at the blistering 21 percent pace set last year.
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That’s according to Joey Von Nessen, a research economist at the University of South Carolina’s Moore School of Business. He told the Charleston Trident Association of Realtors that home sales growth will pull back this year, mirroring the pace of employment growth. Job creation is a big factor in home sales, because employment triggers consumer spending.
“I just don’t think we will see the rate of (job) growth like in the last two years, and that’s going to affect ... sales activity as well,” Von Nessen said.
Von Nessen and economist Steve Slifer of Charleston-based NumberNomics shared similar outlooks for the year ahead at the association’s annual market recap and update.
Slifer, who focused largely on national trends, said the U.S. economy is expected to continue to grow for the next several years. He predicted the nation won’t fall into another recession until 2018 at the earliest.
Also, the improving economy has thinned the nation’s inventory of homes that are for sale, a situation that’s expected to put more pressure on prices and lead to more home construction.
“I think we will see demand will exceed supply for housing for some time to come. ... That will keep the housing sector revved up for the next couple of years,” he added.
The uptick in residential development activity has fueled the growth of construction jobs in the Lowcountry, one of the bright spots in the region’s economy, the economists said.
The Realtors group also released its 2013 home sales report for the region.
The association said 12,744 homes changed hands in 2013, or 21.1 percent more than in 2012. The region’s median home price climbed to $206,530 last year, up 8.7 percent.
Another highlight from last year was that buyers acted more quickly. The average home was on the market 77 days from the time it was listed to the point of sale, compared to 100 days in 2012.
Industry experts have attributed home sales growth to pent-up demand and low mortgage rates compared to pre-recession levels.
Slifer and Von Nessen cautioned that mortgage rates are poised to keep climbing and could top 5 percent, which is still low by historical standards. Von Nessen said the combination of rising rates and prices should force buyers to make fast decisions again this year.