Housing fuels a $45 billion industry across South Carolina, but it could be higher if more homes were being built to meet the demand.
Those are the findings of a new study prepared by University of South Carolina economist Joey Von Nessen for the South Carolina Realtors Association.
From the lumber to build a new home to the person selling the dwelling and the buyer furnishing it, housing in the Palmetto State is big business, especially when its ripple effect is added to the initial sale.
"Every property transaction clearly has a tremendous impact on our state's economy," said Drew Streett, president of S.C. Realtors, which represents about half of the state's 43,000 licensed and active real estate professionals.
The study found housing supports more than 281,000 jobs and provides $10.2 billion in labor income. About 54 percent of the industry's total economic impact comes from the real estate sector while construction makes up 40 percent and the move-in effect contributes the rest. The latter could include renting moving trucks, buying new furnishings or changing paint colors, among myriad other expenses.
The report says the significance of the industry is often underreported because much of the focus is on new construction activity.
The analysis includes the effect of agents on transactions, consumer purchases and the benefits of owning a home, such as establishing credit and building equity.
The state's shortage of housing comes from higher costs for land and materials along with building regulations and a lack of enough skilled labor. But other factors are at play as well.
More people are moving to the Palmetto State for jobs, retirement, the low cost of living and natural amenities such as climate, mountains and beaches. Robust population growth and an unemployment rate below the national average in a historically rural state also are driving demand for housing.
South Carolina is currently the ninth-fastest growing state in the nation, according to the Census Bureau, but home construction is near its lowest level in 60 years.
To maintain the state's economic momentum and capitalize on its competitive advantages, Von Nessen said, "A strong and vibrant housing market ... is more important than ever."
South Carolina's major metropolitan areas have tried to address the imbalance by issuing more building permits in recent years, but more housing needs to be built for the influx of new residents seeking jobs, relocating and retiring to South Carolina.
The study calculated the direct, indirect and induced effects of the housing industry on the state's economy.
"The importance that a strong housing market has for supporting South Carolina's long-run economic growth cannot be overstated," Von Nessen concluded.
The direct impact reflects all in-state purchases made by entities within the housing industry. They can include employee wages and benefits, equipment, building construction and remodeling, technology services, vendors and administrative costs.
As spending increases, it leads to more jobs and more income for related suppliers.
Von Nessen placed the direct economic impact of the state's housing industry at close to $27.6 billion, supporting nearly 148,000 jobs and $4.77 billion in wages.
The indirect impact comes from companies buying supplies, increasing the need for their vendors to buy more goods, creating a ripple of spending.
The economist pegged its effect at roughly $10.9 billion, more than 85,000 jobs and $3.5 billion in income.
The induced effect can come from more employees being hired in vendor industries to meet the demand of suppliers in the housing market. Part of that income will then be spent locally on food, entertainment or health care, for instance, raising incomes for those industries and their workers. That comes out to about $6.2 billion, nearly 49,000 jobs and $1.9 billion in wages.
And while the total economic impact of the state's housing industry is $44.7 billion, it is not uniformly distributed. Much of it is concentrated along the coast, mountains and Midlands, where the state's major job and population centers are concentrated. More than $31 billion of the total economic impact is around the metro areas of Charleston, Greenville-Spartanburg, Myrtle Beach, Hilton Head and Rock Hill, with its spillover from Charlotte in neighboring North Carolina.
On a breakdown of the housing industry's economic impact by congressional district, the 1st District which runs from Charleston to Hilton Head, leads the state at $7.7 billion.
Charleston County also comes in No. 1 among the state's 46 counties for its total economic impact of $7 billion. That supports more than 40,000 jobs and nearly $1.7 billion in wages. Greenville, Horry, Richland and Beaufort round out the top five, which altogether represent about 69 percent of the state housing industry's economic fuel.
Rural Bamberg County near Orangeburg offers the lowest economic output from housing in the state at about $13 million, supporting 90 jobs and $2.4 million in labor income.