S.C. economy firm amid shift in attitudes

Attitudes about the value of owning a home are changing, experts say.

College of Charleston economist Frank Hefner has had a stock answer for people who ask him to predict the coming year's economy in South Carolina: "If you liked last year, you'll like this year," he'd say.

For 2015, he's revising that old phrase.

"If you liked 2014, you'll like 2015 even more," Hefner told the state's Small Business Regulatory Review Committee last week. "We're gangbusters right now."

Employment is up, gas prices are down and consumers generally feel good about their near-term economic future. On top of that, tourism and manufacturing in the Charleston area are booming, creating a Utopian impression for many people looking to relocate.

"People want to move here, with or without a job," Hefner said.

But the preferences about where people live once they get here are changing - a trend driven by millennials and changing attitudes about the value of owning a home.

"A house is no longer an asset, it's an anchor," Hefner said. "It ties you to your location. If you want to get that job in the next state, you've got this anchor dragging around your neck. You can't sell the house, you're underwater on the mortgage. ... This has kept the labor market from being as dynamic as it used to be."

Young adults no longer see the long-term value in owning a house, Hefner said, adding that it generally makes sense to only purchase a home when a person plans to live in it at least 10 or 15 years.

"We're looking at generational issues now," Hefner said. "A 10-year horizon is way outside their thought process. When they are forming a house, they're buying a futon."

Even for those who build long-term equity in their homes, ownership isn't necessarily an economic boon.

"How do you make money on privately owning a house?" Hefner said, adding that the only way to realize that equity is to "move to a worse location or buy a smaller house."

Even so, for those who still want to buy a home, Hefner said no time has been better than now with fixed-interest rates at around 3.7 percent last week for a 30-year mortgage.

No Charleston area projects were on the most recent "greatest hits" list issued by the state Department of Commerce, but the region still expects to benefit plenty from some of those that did make the cut.

Commerce Secretary Bobby Hitt pointed to a pair of announcements during the first quarter of 2014 - by Tokyo-based Toray Industries and German automaker BMW - as two of the agency's top accomplishments for the year. Textiles and fibers manufacturer Toray said it will spend $1 billion over the next decade on a new facility in Spartanburg County that will employ 500 workers. BMW announced its own $1 billion expansion of its existing plant, also in Spartanburg County, to build the X7 sport-utility vehicle.

"The state's positive momentum kept rolling in June as Giti Tire announced the establishment of its first North American manufacturing facility in Chester County, a $560 million investment creating 1,700 jobs," Hitt said in a statement. "Then, in the fall, South Carolina's strong aerospace and power generation industry sectors got even stronger as Wyman-Gordon announced plans to create 400 new jobs in Dillon County."

The announcements are good news for the Port of Charleston, which already calls BMW one of its top export customers. Giti Tires also is expected to be a major importer of raw materials and exporter of tires, while Wyman-Gordon - a maker of large titanium and super alloy forgings for the aerospace and power generation markets - said it plans to export its S.C.-made products to Europe and Asia.

Reach David Wren at 937-5550 or on Twitter at @David_Wren_