Since 2007 and the crash of real estate sales, the housing market across the United States has recovered momentum. In many markets the pace of home sales is now fully recovered. However, there are some who may be looking at current expansive sales numbers and wondering, can we continue to expect home sales to increase in a busy market?
The Greater Charleston area registered real estate sales of 1,801 at a median price of $260,000 in May 2017, an increase from May 2016 when sales were 1,715 with a median price of $243,500. The Charleston Trident Realtors Association (CTAR) says this is a sustainable pace.
“While the increase in sales and median price seems extreme compared to last month’s [April 2017] sales of 1,514 homes at a median price of $248,500, the year-to-date figures continue to show a stable market. … Sales volume in the region is up about 8% compared to 2016, with median price about 5% higher than this point last year—growth rates that have remained consistent so far, this year. "
Why does Charleston’s real estate market continue to grow?
Charleston is continuing to attract new industry and new residents and the demand for houses is steadily increasing. The Charleston Regional Development Alliance estimates 34 people a day move to our area. Some of this is from the surge of millennials who are entering the home buying market for the first time (34% of new home buyers are millennials - read our post on millennials and home buying.)
2017 CTAR President Dave Sansom observes, “The interest in our market has only continued to grow in the last 12 months—for reasons on both ends of the spectrum—most people are either moving here for a job or to retire.”
Manufacturers continue to invest in the Lowcountry
Since 2015, manufacturers have revealed plans to invest heavily in the Charleston region. According to the S.C. Commerce Department, there have been announcements of 5,800 jobs and $1.5 billion to be put into our economy to grow a wide range of businesses.
Construction jobs growth reflected in statewide numbers
As reported by the Commerce Department, jobs in the construction industry across the state increased in May 2017, signaling the industry’s strong growth and presence in South Carolina.
Residential construction spending trends upward, reflecting consumer demand
Local Charleston trends reflect national ones. The National Association of Homebuilders (NAHB) announced on May 1, “private residential construction spending grew 1.2% in March [2017] to a seasonally adjusted annual rate (SAAR) of $503.4 billion. This is 7.5% higher than a year ago, and represents a new post-recession high.”
NAHB attributes the solid gains to private construction spending for multifamily and home improvements.
Chart credit NAHB in their article Private Residential Construction Spending at Post-Recession High
direct link to chart http://eyeonhousing.org/wp-content/uploads/2017/05/Slide1.jpg
The Charleston market is expected to continue to reflect increased buyer demand and activity
In their April 2017 summary report, CTAR says that they do not expect buyer demand to abate in the coming months. However, strong demand leads to increasing prices which can prevent some buyers from entering the market or finding an affordable home.
Looking ahead at the forecast of new home building permits The Charleston Metro Chamber of Commerce in their 2017 Annual Economic Forecast for the Charleston region predicts, “The forecast for the residential building market is for continued growth in 2017 and 2018.” They predict, “The forecast is for a 10.7 percent increase in the number of sales in 2017 and 11 percent in 2018. The average sales price is predicted to increase by 2.5 percent in 2017 and another 3.5 percent the following year.”
New home builder communities expanding to satisfy growth, demand
New home builders are bringing new phases on-line and adding new land to their development pipeline to support market requirements. To satisfy demand, Lennar's Saint John’s Lake on Johns Island opens this summer. Over in Mount Pleasant, John Wieland is developing Midtown. In Dorchester County, Dan Ryan Builders’ Cambridge Park is set to open, and they are building in three expanding communities: Magnolia at Cane Bay Plantation, Summers Corner, The Bluffs at Ashley River. Pulte's Parkside Townes at Nexton are now selling to meet buyers’ demands for more affordably priced homes in Berkeley County with 1400-1500 square feet.
The future appears bright for continued expansion of the new home market in Charleston. In fact, with mortgage funds more available than in prior months this might be exactly the time for you to find your new home in Charleston.
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Tagged as: Charleston Area Housing Market
Categories: The Guide