The S.C. housing market continued to march toward full recovery in July with higher sales and prices.
Sales across the state blossomed by 21.4 percent, according to the S.C. Realtors’ July report, while Columbia home sales rose by 23.6 percent.
Home prices across the Palmetto State increased nearly 5 percent last month to a median of $163,063.
Columbia home prices rose by 4.6 percent in July to a median of $150,000, the trade group’s monthly report stated.
“It won’t be long before the housing recovery is simply referred to as ‘housing,’ ” the report said indicating a full recovery from the five-year housing bust lies ahead.
After years of a sour economy in which many builders exited the business and homeowners couldn’t find buyers, high housing stocks finally began falling last year.
In July, inventory levels shrank in the state by 7.3 percent to 47,078 units.
That contraction left single-family homes at a nine-month supply, the report said, with 9.5 months supply of condos on hand. A six-month supply is considered normal.
Historically low interest rates, a modestly improving economy and pent-up demand – both from buyers and sellers – eventually drew buyers back to the market. That diminished inventories and helped send home prices higher.
“As prices continue to rise, institutional and cash buyers have effectively priced themselves out of the real estate market,” the July report stated. “There’s less incentive for these kinds of buyers, yet affordability for consumers remains attractive.”
New listings of homes in South Carolina, which should somewhat help ease inventory problems, rose in July by 16 percent to 9,430 units, according to the report.
“I think that we’re seeing, finally, the consumers out there are taking a look at it (and realizing) it makes a lot more sense to buy, in certain situations, than rent,” said Morris Lyles, ERA Wilder Realty’s broker-in-charge at the downtown Columbia office. “We’re seeing rents going up and we’re seeing house prices stay pretty steady. I think what we’re going to start to see is some prices improve – for the seller. There’s still that demand and there are less and less homes for sale.”
More homeowners will put their houses on the market as the market continues to improve, Lyles said.
“The big issue is, sellers have got to price their homes competitively and have it in good condition, because buyers are not wanting to go in and do work,” Lyles said.
“They want to move in. That’s all they want to buy a house for,” Lyles said. “They’re spending everything they have to buy this house. They don’t want to do this other stuff. That’s what I’m hearing from buyers a lot.”
Sales at ERA Wilder are up 28 percent over this time last year, Lyles said.
Home builder permits for July, meanwhile, were mostly not as strong as the month before for the area’s top 20 builders.
Mungo Homes, however, the area’s leading builder, said business is booming. Mungo, which commands about 20 percent of the local home building market share, has pulled 376 permits so far this year in Columbia, it said, and sold 375 houses.
“We’re crazy wide open,” said Kim O’Quinn, Mungo Homes’ marketing director said. “We’re pulling one (permit) for one (sale). That’s good.”
Sales are up 48 percent over last year, O’Quinn said, and demand has been strongest in the $375,000 to $500,000 price range, she said, mimicking statistics reported by the Realtors in their monthly report.
Both Lyle and O’Quinn attributed the strong sales showings at least in part because of buyers’ growing confidence their employment will allow them to pay for the home they purchase.
“I think people are able to move their previously used homes and want to be in a new home,” O’Quinn said, “so the resale market has improved as well.”
The inventory of existing homes is lower now than it has been in years, O’Quinn noted. At Kingston Harbour, one of the builder’s higher-end developments on Lake Murray in Lexington County, Mungo projected 13 sales by July, O’Quinn said, but has sold 20 homes instead, at the higher price points, in a neighborhood where homes average $430,000.
“That upper price point is coming back and that’s making a lot of difference in the market,” O’Quinn said.
Go to the home show:
The Home Builders Association of Greater Columbia’s 19th Annual Home Improvement Show starts Friday with more than 80 product and service vendors:
U.S. home builder confidence nears 8-year high
Confidence among U.S. home builders is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year.
The brighter sales outlook is the latest sign pointing to a sustained pickup in construction in coming months and comes as applications for permits to build single-family houses are at a five-year high.
The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday jumped to 59 this month from 56 in July. It was the fourth consecutive monthly gain.
The Associated Press