U.S., Charleston housing markets boosted by jobs, higher rents
Local housing activityWhile nowhere near their record highs, home sales in the Charleston region are showing signs of a recovery.
As of April 10, sales volume was 7 percent higher and median price was up 4 percent higher than at the same point last year, the Charleston Trident Association of Realtors said in its latest monthly report.
In all, 2,064 homes changed hands at a median price of $177,500.
During the same period of 2011, 1,933 homes had sold at a median price of $170,000.
The apartment development business also is booming. Charlotte-based Real Data estimated that about 1,600 units are under construction and nearly 3,000 have been proposed.
Most of the activity is in Mount Pleasant.
Rising rents and a healthier job market are inspiring more people to consider buying.
Builders are responding to the demand by laying plans for more homes this year than at any other point in past 3½ years.
And banks are helping both by approving more loans.
All that points to a better year for the housing market, though a full recovery could take several years.
“We’re doing so much more business than we have in years,” said Ed Kopal, who runs a construction company in East Texas and has seen his business more than double this year compared with 2011.
Others, too, foresee more enthusiasm among buyers after four sluggish years.
Charleston builder Jeff Meyer of J. Meyer Homes said he senses it.
“People are starting to feel a little bit of excitement, and they are cautiously optimistic,” said Meyer, who also is chairman of the Charleston Trident Home Builders Association. “It’s almost funny. I look at other builders and they look at me and we ask, ‘Are you doing as well as I am?’ You’re afraid to jinx it.”
Meyer said his company sold five houses over the past seven weeks in its two developments near Summerville and in Hollywood, “which is good for someone like us.”
Buyers seem to be less fearful than they were a few years ago, he said.
“Job growth is the key,” Meyer said last week. “I think we’re lucky here in Charleston that we’re seeing some job growth.”
Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday. The pace hasn’t been that high since September 2008.
Of those requested, 462,000 permits were to build single-family homes. That’s 12 percent more than just six months ago. Still, the figure remains far below the 800,000 permits a year that signify a stable new-home market.
Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent to 285,000. A healthy number is closer to 400,000 a year.
In Charleston, 1,600 new units are under construction, mostly in Mount Pleasant, and nearly 3,000 have been proposed for the region, according to Real Data.
In many markets, rents are rising, which has spurred construction for both kinds of housing.
So while apartment developers in many markets are chasing higher rents, renters are seeing more incentive to buy. A survey of builders has shown an increasing amount of foot traffic at open houses across the country since September.
Kennon Reinard and her husband were among those who felt the time was right. The couple have rented a two-bedroom apartment in Chicago for the past six years. Over the past month, they looked at 14 houses before making an offer of nearly $260,000 on a four-bedroom home on the Northwest side of the city.
“We’ve always wanted a house, but we never thought we could afford one,” said Kennon Reinard, 33. “But we started noticing friends buying houses last summer, and when we checked it out, we realized we could own a whole home with a backyard without paying that much more than what we’re paying in rent.”
The Reinards and other potential homebuyers have another reason to feel good about trading rent payments for a mortgage: The job market has strengthened since last summer.
The unemployment rate has fallen from 9.1 percent in August to 8.2 percent last month. Employers have added an average of 212,000 jobs a month from January through March.
More jobs and a better outlook among buyers also could make 2012 the first year since 2008 that construction adds to growth, rather than detracts.
Record-low mortgage rates have helped persuade buyers. Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan rose to 3.90 percent from 3.88 percent. The rate touched 3.87 percent in February, which was the lowest since long-term mortgages began in the 1950s. The 30-year loan is the most common financing option for home buyers.
Banks also are seeing more qualified buyers apply for loans. Two of the nation’s biggest banks, JPMorgan Chase and Wells Fargo, approved more mortgage applications in the first quarter, based on their recent earnings reports.
“The ones buying now are older, they’ve saved up for a while, they have good jobs, they are not risky,” said Karen Mayfield, senior vice president of Bank of the West, a national bank lender based in San Francisco.
Among the most basic requirements needed for home buyers: good FICO credit scores typically above 700, substantial down payments, stable job histories and thorough documentation.
The Reinards had been socking away a portion of their paychecks for all the years they rented, and both have solid credit histories. They are coming to their closing in May with a down payment of more than $25,000.
“We feel very safe in our jobs,” Reinard said. “We’ve been pretty financially responsible, so we got thumbs up after all the checks.”
John P. McDermott of The Post and Courier contributed to this report.