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Growth of S.C. economy shifting to cruise control, economist says

Real Estate - Residential
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South Carolina’s economic growth is shifting from acceleration to cruise control, according to a prominent S.C. research economist.

Joseph Von Nessen, who conducts economic impact analyses, forecasts and survey research at the University of South Carolina, spoke today at a residential market update event hosted by the Charleston Trident Association of Realtors.

Joseph Von Nessen, a research economist at the University of South Carolina, speaks during a residential market update event hosted by the Charleston Trident Association of Realtors. (Photo/Ashley Heffernan)“We’ve seen a paradigm shift in South Carolina over the last year, and that’s going to impact how we view growth going forward and how we ascertain what our expectations can be, what our realistic expectations can be for 2017 moving ahead,” he said.

Each year since 2010, South Carolina’s economy grew at a faster rate than the previous year. That trend broke in 2016 when the growth rate essentially leveled off, Von Nessen said.

The state’s economy is still strong and predicted to grow in 2017, but no major industries in the state are forecast to significantly expand beyond their current rate of growth in 2017, he said.

Von Nessen compared it to a person driving a vehicle on a highway, saying that the driver accelerates when just entering the highway and then eventually hits a cruising speed. The state’s economy was steadily gaining speed but is now on a cruise-control path.   

The Charleston region is leading the way for much of that growth. Charleston’s average employment growth between 2015 and 2016 was 3.2%, which is higher than the Columbia region’s rate of 1.4%, the Upstate’s rate of 1.7% and the statewide rate of 2.2%, Von Nessen said.

“We’re definitely not seeing uniform growth across the state, haven’t in the last year,” Von Nessen said.

The Myrtle Beach region saw 1.2% employment growth, while the Hilton Head area saw a 1.5% increase, he said.

“The coastal regions in general have been doing well in 2016. They’ve slowed down with the fourth-quarter numbers. Charleston is the only region that’s seeing very high rates of growth throughout the end of the year,” he said. “But if we look more broadly, it turns out that both Hilton Head and Myrtle Beach have been doing fairly well overall. But Charleston is still the clear leader when we look at overall employment growth in South Carolina.”

Housing activity tends to closely follow those employment growth numbers. MLS sales activity in the Charleston region grew 11.9% from 2015 to 2016, and Van Nessen forecasts it will go up about 8.1% in 2017.

“Housing has been the overall leader in terms of industrial sectors in 2016,” he said. “We expect it to continue to thrive in 2017.”

The Charleston Trident Association of Realtors released its annual report on the region’s housing market during the event as well. It found that there were 22,949 new listings in 2016, which is a 4.3% increase since 2015, and 17,720 closed sales during the year, which is a 9.3% increase from the previous year.

Inventory of homes for sale continued to drop, leaving just 4,733 available at the end of 2016, which is nearly 20% less than the same time in 2015, the report said.

The median sales price went up nearly 5% since 2015 to $240,000, while the average number of days a home was on the market dropped 3% to 58, according to the report.

Residential real estate data by county for 2016

Location

Total closed sales in 2016

% change from 2015

% new construction
in 2016

Days on market

Median sales price in 2016

% change from 2015

Berkeley County

4,442

+14.3%

30.5%

52

$210,143

+4.6%

Charleston County

9,221

+7.3%

19.9%

59

$310,000

+5.8%

Dorchester County

3,386

+13.2%

20.1%

54

$200,000

+5.5%

Source: Charleston Trident Association of Realtors

Reach Ashley Heffernan at 843-849-3144.

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