Real estate 'snapshot' finds new home construction in Charleston area leveling off temporarily, while prices continue to advance

Creekside Village is a small new mid-priced neighborhood off College Park Road in Ladson. New home construction has been flat since last June but is expected to pick up later this year. File/Leroy Burnell/Staff

Just as certain motorists want nothing but the latest model cars, a swath of home shoppers set their sights on just-built or soon-to-be-framed houses.

Such a strategy can be tenuous now, what with a slowdown of new homes for sale and climbing costs for the fewer dwellings on the market.

But patient house hunters can expect to see the tide turn, as builders look to erect a plentitude of ranches, colonials and Charleston single homes in the coming months. In turn, individuals, couples and families who purchase now should see the value of their new dwellings escalate by the end of the year and into 2015.

Those are among the "observations and trends" in the recently released Charleston New Homes Snapshot for the second quarter. Will Jenkinson, broker-in-charge of Carolina One New Homes, prepares the report in conjunction with Charleston-based Real Estate Information Service Inc.

"Our local real estate market continues to improve and at the mid-year mark, it is outpacing 2013 in closed (housing) units and volume," Jenkinson says.

"This is all being done while our local new-homes market continues to develop new opportunities that will result in future closings in 2015 and beyond," he says.

The novel advancements include home builders securing additional property for construction as they catch up from the recession-era housing slump.

Jenkinson says his prediction this spring of a diminished market for new properties materialized. "We are facing a shortage of finished lots, therefore, the permit activity in the first half of this year is flat," he says.

But, that tightness in the new-homes business won't last for long. "As new communities open for sales later this year and into first half of 2015, we will see the permit activity rise in our market."

Jenkinson says he and the real estate analysis firm fine-tuned their study of the greater Charleston new-homes industry and expectations for growth.

In the July report, the pair agreed to "take a closer look at the permit activity over the past couple of years as this is a strong indicator of health of the market."

First, the study probed single-family permit activity over the past four years.

Real Estate Information Service discovered that new homes permit activity in Charleston, Berkeley and Dorchester counties has risen 50 percent since 2011 and stands at the highest level since 2007, just before the market started to tumble.

"Typically, strong permit activity is a good sign that builder confidence is increasing in the market," Jenkinson says. "This is always a strong indicator of the future and it seems positive."

At the same time, there can be bumps along the way. The real estate researcher provided a graphic on permit activity in the past 12 months. Jenkinson says it's "flat" compared with the past four years.

"The biggest reason for this plateau is the lack of finished lots in our market to build on," he says. "As more finished lots come online over the next 12-18 months, we will see the number of permits continue to rise."

A steadier indicator has been the "permit value," or cost of new homes on the market, according to Jenkinson.

Real Estate Information Service graphed the prices for homes being built from February 2011 through May 2014. "As the overall market has continued to recover, we have seen the steady rise of the value of new homes being built in our market," Jenkinson says.

The broker-in-charge cited the Charleston area's strengthening economy as providing a boost to home prices.

"With the continued job growth, I predicted this trend will continue in the near term," Jenkinson says.

Reach Jim Parker at 937-5542 or