The housing market in Charleston has come full circle since before the bubble burst in 2008, and new home construction will continue at a brisk pace for the foreseeable future.
That’s the message laid out Tuesday by an economist from the University of South Carolina and the Charleston Home Builders Association.
“We are in growth mode,” said Will Jenkinson of Carolina One New Homes after giving a report on new home growth in the Charleston region during a luncheon in North Charleston. “We have not seen this kind of new growth since 2006.”
All three counties in the area are “thriving” with more homes being built, he said.
Charleston County, with major developments on the northern side of the Metro area at Carolina Park in Mount Pleasant and on the western side of Charleston at Carolina Bay, leads the area with 41 percent of the new home construction.
Not far behind is Berkeley County with 37 percent and Dorchester County with 22 percent.
Jenkinson said that as new subdivisions come online in Berkeley with developments at Nexton and Cane Bay, and in Dorchester with Summers Corner and others, the percentages will start to even out.
“Twenty-eight percent of closings in the Charleston area are made up of new home sales,” he said. “The national average is 8 percent.”
For the first four months of the year, more than 1,100 of the 4,700-plus closings in the tri-county area were new homes. Jenkinson expects the year to end with between 3,500 and 3,600 new home closings. That would be up between 3.6 percent and 6.6 percent from 3,378 in 2014 and would reflect a rising trend since 2011, when 2,085 closings for new homes was reported.
He also said permits are at their highest point since August 2007.
Homebuilders will continue to stay busy, he said, as new developments on Johns Island and in Cainhoy take shape.
The demand for new homes is a reflection of low interest rates, more jobs being created and an influx of people to the Charleston region, said USC research economist Joey Von Nessen.
“We have moved from a period of recovery to a period of expansion,” he said. “Housing is demand-driven. You can’t buy a house if you don’t have a job.”
Though most metropolitan areas of the state have seen employment growth, Von Nessen said the Charleston region is leading the way with 2.8 percent job gains over the past five years.
“Only Charleston has seen consistent high rates of employment growth,” he said.
He cited Boeing’s 787 Dreamliner assembly plant in North Charleston as a principal catalyst and said announcements by Volvo Cars and Daimler to build $500 million auto manufacturing operations in Charleston and Berkeley counties will underpin the region’s employment picture and housing outlook.
“Housing demand is responding to broader-based growth in the region,” Von Nessen said. “Charleston is in a position now to continue the growth it has had.”
New-home construction took off during the past 12 months, he added, because of increasing wealth and jobs and decreasing debt after the Great Recession.
He doesn’t see the market overheating because housing prices are growing at a slow, steady pace and inflation is low and stable.
Von Nessen said he also does not expect the inevitable rise in interest rates to have a major impact on the housing market because most industries realize it’s coming and have factored it in. He expects interest rates to rise in the fall if the nation continues to add about 200,000 jobs a month.
For the state and the region, Von Nessen sees slow and steady growth for the rest of the year.
“Going forward we are in pretty good shape,” he said.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.