New single-family home construction is on the comeback trail in the Midlands

As the local and state economies continue to grow, more hammers and electric saws are being heard in residential areas throughout Richland, Lexington and Kershaw counties.

Construction permits issued for new single-family homes in those three counties topped 3,000 in 2015 for the first time since 2008. It is both an indication that homebuilding continues to claw its way back from the Great Recession and a grim reminder of how far the U.S. housing market fell. Ten years ago, more than 6,200 building permits were issued in those three counties.

Homebuilders and real estate agents say housing construction is strong throughout the area, but the most popular areas are in unincorporated areas of Lexington County. They accounted for 43 percent of the new housing starts approved in the three counties.

New houses are under construction in the county around Lake Murray, in the Chapin-Irmo areas and around Red Bank and the Interstate 20 corridor.

Last year, Lexington County had 1,350 new housing starts, according to statistics reported to the Building Industry Association of Central South Carolina. Nearly 500 permits were approved during the first two months of 2016. By comparison, Richland County issued 973 residential building permits in 2015 and 146 permits in January and February.

“New construction in Lexington County is actually west, south, north and east,” said Anne Wilkins Brooks, sales and marketing director for Southern Visions Realty, a development company in Lexington. “I would say west of (the town of) Lexington is probably one of the fastest growing areas.”

River Bluff High School, located at I-20 20 and U.S. 378, opened in August 2013 and created “a frenzy of new (home) construction” in the county, Brooks said.

Blythewood remains another hotbed of new home construction with contractors building in at least five subdivisions. Planning for some of those began as far back as 2008, when the full brunt of the housing bust was felt, real estate agents in that area said.

The Elgin and Lugoff areas of Kershaw County also have major single-family home construction projects underway. The area is poised to attract more after a project to widen I-20 between Spears Creek Church Road and I-77 was finished about two years ago.

Some of the construction could be similar to Woodcreek Farms. Located off I-20 northeast of Columbia, Woodcreek Farms is a golf course community in Elgin that features homes priced from around $350,000 to more than $1 million, flush with increasingly popular recreational amenities as tennis courts, swimming pool and a nature preserve.

New home construction also is underway in Richland County closer to downtown – in north Columbia, for instance – and in southeast Richland County in the Garners Ferry Road area, statistics show.

“We’re seeing a little bit of an uptick in the southeast part of town,” said Morris Lyles, an ERA Realty broker in Columbia and past president of the Central Carolina Association of Realtors.

“There’s a big demand with people that are maybe stationed at Shaw (Air Force Base), or couples where one is stationed at Fort Jackson and the other at Shaw,” Lyles said.

Lexington-based Essex Homes last year built about 500 houses across the local area including throughout Lexington County, in Northeast Richland and out I-20 toward Kershaw County.

Now, the contractor is also working in a new community off Garners Ferry Road called Burnside Farms. The community is a 175-acre residential and commercial development at Garners Ferry and Hazelwood roads that will feature 111-acres of single-family homes that average between 1,700-1,800-square feet.

“It’s interesting to see that side of town start to pick up,” Cansilla said. He expects Burnside Farms, which formerly was pasture land, to come onboard this year.

Residential development in Blythewood and Northeast Richland may have slowed some, but they are far from finished, said Doug Bridges, an agent in the Blythewood office of Coldwell Banker United Realtors.

The biggest challenge for builders is finding suitable lots, Bridges said. Stalled developments from as far back as 2008-09 have been sold. “Now they are trying to scramble to get developments out of the ground.”

The Jacob’s Creek and Forest Creek subdivisions, near the Richland-Kershaw county line, also have a lot of construction, Bridges said.

The Midlands’ new home construction growth meshes with activity elsewhere in the country, experts say, and is indicative of changing patterns in the economy and the way people want to live.

During the recovery so far, a lot of the new residential construction has been in apartments or “infill” housing, where homes are built close to downtown or in “mini-urban” areas in the suburbs, said Mark Vitner, a senior economist at Wells Fargo in Charlotte who studies South Carolina economics.

“What we really haven’t seen a whole lot of is traditional suburban development, which tends to be further out from the city center,” Vitner said.

One reason suburban home developments have lagged, Vitner said, is because their selling prices had not rebounded sufficiently farther from downtown for homebuilders to justify the higher costs of land and construction.

“That’s beginning to change,” primarily because homes closer to the city have appreciated so much that house hunters are being pushed into outlying areas, he said.

Vitner said 2016 holds the promise of a better year for single-family construction. He attributes that to improved employment conditions and continued historically low mortgage rates, buoyed by a Federal Reserve that is hesitant to raise interest rates too quickly.

The Midlands’ top homebuilders, including Great Southern Homes, Mungo Homes, D.R. Horton/Crown Communities and Essex Homes, all have construction underway in the region’s busiest new home areas.

“The Columbia area has become a fast-growing region for South Carolina,” Rob Haney, Crown Communities city manager in Georgia, said Friday.

The region’s rising popularity can be attributed to many factors ranging from retiree relocation because of lower taxes to the myriad of outdoor activities available, Haney said. Lexington is a top new home construction area in part because of the reputation of area schools.

DR Horton/Crown Communities local projects include Grey Oaks, which will soon open its third phase, and its newest community, Estates of Creekside, a mostly brick, more elite community right outside the town of Lexington.

Today’s homebuyers still prefer amenities such as granite countertops, hardwood flooring in the main areas of homes, and larger kitchens with built-in double ovens for family and entertainment, Haney said. Walk-out basement homes, finished or unfinished, also are quickly becoming popular in Crown Communities because of people from outside the region moving into Columbia area, Haney said.

Mungo Homes was responsible for more than 500 new building permits in the three-county area last year. The company’s homes have an average sales price of $230,000, said Steven Mungo, Mungo Homes CEO.

Mungo homes in the Columbia area average 2,300 square feet, and homebuyers still want hardwoods, granite counters, screened porches and fireplaces, Mungo said.

Morris Lyles, an ERA Realty broker in Columbia, said a lack of inventory in existing homes is causing a lot of people to choose new construction.

The lack of inventory is caused in part by baby boomers hanging on to their homes because they still aren’t sure whether their children will return home, Vitner said. Plus, baby boomers realize their house investment, currently refinanced at low interest rates, is building valuable equity for retirement.

Meanwhile, millennials are ready to have children and are looking for homes, Vitner said.

To accommodate the growing demand for homes, builders are constructing houses that average from 2,800 square feet to 3,300 square feet in the $250,000 price range, Lyles said. “That’s hard to duplicate in the resales market,” Lyles said.

This story was originally published March 26, 2016 at 5:53 PM with the headline "New single-family home construction is on the comeback trail in the Midlands."