Double-digit October increase fueled by first-time buyers seeking to beat tax credit deadline
S.C. home sales spiked 18.1 percent last month as a crush of first-time buyers hurried to make purchases before a federal tax credit was about to expire, real estate officials reported Friday.
And median sale prices posted their first statewide gains of 2009, growing 2.6 percent from a year ago to $152,400, according to data released by the S.C. Realtors trade group.
But experts question whether the sales gain can be sustained without the boost provided by Uncle Sam.
Never miss a local story.
October was the second consecutive month that sales statewide have risen versus a year earlier. September's reported gain of 1.6 percent was the first positive result for home sales in more than three years.
Midlands home sales rose at a faster clip last month, gaining nearly 21 percent over a year earlier. That boost gave the Columbia area its first back-to-back home sales increases after 25 consecutive months of declines.
Meanwhile, the Columbia-area's median sales price rose 2.1 percent from the previous two Octobers' readings of $141,000.
Sales have spiked over the $8,000 tax credit for first-time home buyers, which was set to end Nov. 30. But two weeks ago, Congress extended and expanded the credit.
In addition to first-timers, now existing homeowners can get a $6,500 tax credit through the spring.
Whether the housing market has really turned a corner is hard to tell at this point, said Rhonda Marcum, executive director of the Mortgage Bankers Association of the Carolinas.
"We have to wait until the credits disappear to get a real handle on what the market is doing," she said. "I'd like to tell you we've hit the bottom and are on the climb again. But from what I hear from my members, that does not appear to be happening."
Marcum said she's hopeful South Carolina will get a boost in home sales in the next year or so from new industry coming to the state, most notably the Boeing 787 jet assembly plant bringing 3,800 jobs to the Charleston area.
"That might help ease existing inventory," she said.
While the tax credit has drawn many buyers, some have been lured by mortgage rates hovering around historic lows and bargains from foreclosures and short sales, said Jeff Wheeler, chief of operations for Coldwell Banker United, Realtors.
Without the tax credit, sales still would be rising though at a clip under 10 percent, he said.
"We're not going to see a steep climb up," he said. "Growth will be very deliberate."
Still the recent sales surge - and lack of new construction - has cut the inventory of Midlands homes to a 7 1/2-month supply from about 10 months. Normally, a healthy market has about a six-month supply of homes. That has gotten some home builders starting work again, he added.
The biggest sales spikes last month came along the coast where the home-purchase swoon started in South Carolina in 2006.
Last month's gains in Hilton Head Island (38.1 percent), Charleston (31.3 percent) and Myrtle Beach (26.2 percent) ranked first, second and third statewide.
Also showing healthy increases were the Rock Hill area (22.9 percent) and the Florence region (21.8 percent).
However, sales for the year, remain down from 2008.
Statewide, sales have dropped 14.5 percent in 2009 and are down 15.3 percent in the Columbia area.
Despite their good showings last month, Rock Hill and Florence have among the year's biggest sales shortfalls at 24.8 percent and 19.5 percent, respectively. Only Greenwood - down 24.9 percent - is worse.
Myrtle Beach's 2.3 percent downturn is the state's best for 2009.