The Charleston residential real estate market has been steadily improving since the fall of 2011, and the chief economist for the National Association of Realtors said it looks like a “very sustainable” recovery.
“I feel great about the second half of 2012, going into 2013,” said Lawrence Yun, who addressed a sold-out crowd of area real estate professionals Wednesday at the Charleston Trident Association of Realtors’ midyear market update.
“It could be a sustained recovery over the next five years,” he said.
In Berkeley, Charleston and Dorchester counties, home sales have been increasing this year, at a time when the inventory of homes for sale has fallen sharply. Prices also have started rising, after falling for five years.
Statistics released by the local association show that the Charleston area saw a ninth consecutive month of rising home sales in July, with Charleston County accounting for most of the three-county region’s 10 percent gain in home sales.
A combination of depressed home prices and record-low mortgage interest rates have made homes more affordable than ever, but tighter bank lending standards have made it harder for people to qualify for loans, Yun said.
“Statistically, there has never been a better time to buy,” he said, acknowledging that agents tend to say it’s a good time to buy just about all the time.
A measure of national home builder confidence tracked by the National Association of Home Builders/Wells Fargo builder sentiment index hit a five-year high Monday, and the stock market value of home builders has soared since last fall.
Home sales nationally fell sharply from 7.08 million in 2005 to 4.12 million in 2008, and hovered around that level through 2011, when 4.26 million were sold, according to Yun.
“In 2012 it looks like it is finally going to break out,” he said.
Sales to owner-occupants continued to fall through 2011, but investor purchases have increased, feeding the demand for rental housing, Yun said.
He said he thinks pent-up demand — all the young adults living in their parents’ homes or sharing apartments with roommates — is “like a coiled snake” that will spur the market in the coming years.
Typically, more than 1 million new households are formed each year, but that number fell sharply during the recession, according to Yun, representing lots of people who could soon want homes of their own.
Yun said the number of homes for sale nationally sits at a six-year low, and the number of new homes is at a 50-year low. The reduced number of homes for sale should support prices, he said.
Sheryl Hill, sales manager for Weichert Realtors Palmetto Coast in Mount Pleasant, said she found Yun’s forecast reassuring.
“I feel especially positive after hearing him,” she said.
Hill said that Yun’s ideas about pent-up demand rang true as well.
“Just about everyone I know has someone living at home,” she said.
Reach David Slade at 937-5552 or Twitter @DSladeNews.