Real estate tracker's 2015 'housing outlook' touts greater Charleston as among a half-dozen markets with bustling new-home activity

Charlotte builder Saussy Burbank is unveiling a few custom homes it's framing in the Old Village of Mount Pleasant. The Lowcountry is considered one of the top markets for new-home construction, a new report has found (Provided).

The Charleston area stands out as one of the few places ahead of the pace in terms of new-home building, a big step toward a fundamentally sound housing market.

That's a nugget culled from the 2015 Housing Outlook released in late December by CoreLogic, a national real estate analysis firm.

The company finds that "single-family construction has stagnated nationally." Yet a few spots are bucking the trend, "exhibiting strong sales growth for new builds."

They include three in the Carolinas - Raleigh, Charlotte and Charleston - as well as Houston, Dallas and Austin in Texas.

The homebuilding surge has benefited those metro areas doubly by keeping prices steadily rising without soaring out of control.

"While each of those markets is exhibiting healthy home price growth," CoreLogic notes in its report, "solid new construction builds are helping to alleviate prices from increasing further."

Based on the firm's outlook, the national housing market in 2015 is expected to progress along the lines of metro Charleston with rising sales and construction and solid but not excessive price growth.

"The U.S. economy is picking up steam, as strong employment growth is exhibited within the first-time homebuyer age group," CoreLogic forecasters say.

"Home sales will increase by 9 percent in 2015, housing starts are expected to grow 14 percent and home price growth is expected to moderate."

The property information researcher believes home sales, construction and prices will be driven by steadily rising job growth for the first time since the housing market nosedived more than half-a-decade ago.

"As Yogi Berra once said, 'The future ain't what it used to be,' which is an apt description of the current and future state of residential real estate in the U.S.," according to CoreLogic.

The analyzer suggests that "economic fundamentals (are) finally back in the driver's seat." Markets in which home prices are increasing show rock-solid economic strengths, "particularly technology and energy."

Four of the top 10 price appreciating markets, notably San Francisco, San Jose, Austin and Seattle, have high concentrations of technology industries, CoreLogic notes. Employment growth in those areas is increasing at a 2.8 percent rate from a year ago as of October, "roughly twice the national rate."

CoreLogic does echo a word of caution. "However, the drop in oil prices may alter the equation," it says. Also, the lower-end home price category is growing faster than the higher-end price category in the top 25 U.S. markets, "reflecting tight supply and lack of new construction."

Positive signals for 2014 include a "post-crisis economic expansion" celebrating its fifth anniversary. There's also a steadily improving forecast for "drivers of demand" such as consumer spending and capital investment.

Employment grew at a 2 percent rate year-over-year basis for the three months ending in November. That was the strongest rate since the three months ending in March 2006, "which was the peak employment growth of the last economic expansion," CoreLogic points out.

What the company calls perhaps the most important economic trend involves the employment rate among millennials beginning to "markedly improve in 2014." The 25-to-29-year-old segment alone saw a 3 percent improvement in employment growth.

"This age cohort is the key first-time homebuyer segment," and its jobs growth should lead to more consumption and higher spending.

At the same time, "The improving economic backdrop helped the housing market withstand the modestly higher-rate environment in the early part of 2014," even as home prices shot up.

In December, mortgage rates dipped below 3.9 percent for the first time since May 2013. "While rates are still very low, home prices are not," CoreLogic notes. In 2015, rates on a 30-year fixed mortgage are expected to rise to no higher than 4.3 percent.

In conclusion, the real estate analysis firm believes that the economy will be strong enough in 2015 to help nudge the housing market toward a long term recovery.

The combination of stronger employment growth and especially millennials job growth "makes for solid footing for the real estate market," the property information firm says.

"Moreover, the recent drop in oil prices cannot be overstated, because not only does it directly lower the transportation and home energy costs for households, but it also improves consumer confidence.

"And confident consumers are more likely to spend on big ticket items," CoreLogic points out, "which is sweet music to the ears of the real estate market."

Reach Jim Parker at 937-5542 or jparker@postandcourier.com.