Home sales activity in the tri-county region has been strong so far this year and that activity is expected to continue through the remainder of 2014, an economist said today.
Joey Von Nessen, a research economist at University of South Carolina's Moore School of Business, said the region's sales activity will continue to be largely tied to jobs growth. Job creation is a big factor in home sales, because employment triggers consumer spending.
"Charleston has been experiencing high employment growth relative to the rest of South Carolina - and we have seen higher levels of housing activity in Charleston as a result." he said.
Von Nessen was the guest speaker at today's Charleston Home Builders Association's market update meeting at the Crowne Plaza in North Charleston.
Von Nessen said the largest negative impact on the local housing market will be slow wage increases.
"Wage growth has been stagnant throughout the state, though Charleston has fared better than most regions," he said. "This is largely due to the fact that Charleston has a relatively large concentration of employees working in highly scientific and technical fields, such as engineering, that pay significantly above the state's average wage."
He added that Charleston is also benefiting from retirees moving to the coastal region.
"Unlike many other markets, a significant portion of new housing demand in Charleston is arising from retirees moving into the region," he said.
Von Nessen's update comes on the heels of the local housing market facing some issues like low inventory of homes for sales, a dearth of available land to build new homes and rising mortgage rates.
Von Nessen said what could be perceived as negatives are results of an improving market.
"Rising mortgage interest rates are usually seen as being generally bad for housing markets. However, rising interest rates are also a natural consequence of a recovering economy. We have to keep this in mind," he said.