2019 Midlands Real Estate Forecast Prospectus

2019 REAL ESTATE PROSPECTUS Housing. Real Estate.

Home Building.

Central South Carolina.

Sponsored by:

McDonnell & Associates, P.A. Palmetto Citizens Federal Credit Union prospectus-19.indd 1

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UPCOMING EVENTS

Building Industry Association of Central South Carolina

For more information or to register for the following events, visit www.BIAofCentralSC.com or call 803-256-6238.

October 1

Annual Meeting of the Membership

Seawell’s, Columbia

October 8

BIA After Hours

Fully Promoted, Columbia

October 10

Job Shadowing for Construction

October 17

Chili for Charity

700 Huger Street, Columbia

October 21

Build PAC Golf Tournament

Cobblestone Park Golf Club, Blythewood

October 23

SMC New Homes Bus Tour

Downtown/Southeast Richland County

November 21 Big Thursday Annual Oyster Roast December 13 Holiday Ball

DoubleTree by Hilton, Columbia

Central Carolina REALTORS®Association

For more information or to register for the following events, visit www.CentralCarolinaRealtors.com or call 803-771-8852.

October 3

Affiliate Appreciation Night

Hunter Gatherer Hangar, Columbia

October 24

Boos and Blue Jeans

Central Energy, Columbia

November 21

Prayer Breakfast

Hammond School, Columbia

December 12

Holiday Cocktail

SC State Museum, Columbia

Columbia Chamber of Commerce

For more information or to register for the following events, visit www.ColumbiaChamber.com or call 803-733-1110.

October 3

117th Annual Gala

Columbia Metro Convention Center, Columbia

October 17

Partner Engagement After Hours

Senate’s End, Columbia

October 25

Small Business Breakout

Columbia Chamber, Columbia

October 29

Military Outreach Group

State Fairgrounds, Columbia

October 30

Partner Orientation & Reception

Columbia Chamber, Columbia

November 5

Chamber Issues Forum

Richland Library, Columbia

November 21 Partner Engagement After Hours

Graduate Columbia, Columbia

November 22 Small Business Breakout

Columbia Chamber, Columbia

December 3

Richland Library, Columbia

Chamber Issues Forum

Mortgage Lenders Association of Greater Columbia

For more information or to register for the following events, visit www.mlagcsc.org.

October 2

MBA of the Carolinas 46th Annual Convention Wilmington, NC

December 4

Holiday Luncheon

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The Palmetto Club, Columbia

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TABLE OF CONTENTS Speaker Bios 4-5 State & Local Demographics

6-7

NAR Outlook 8 Economic Impact of Housing

9

Top 20 Builders 10 Housing Permits 11 SC REALTORS® Report

12

Real Estate Indicators

13-15

Housing Economics Report

16-19

Presented by:

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SPEAKERS Robert Dietz, Ph.D. Chief Economist & Senior Vice President for Economics and Housing Policy National Association of Home Builders

Dietz’s responsibilities include housing market analysis, economic forecasting and industry surveys, and housing policy research. He has published academic research on the private and social benefits of homeownership, federal tax expenditure estimation, and other housing and tax issues in peerreviewed journals, including the Journal of Urban Economics, Journal of Housing Research, the National Tax Journal and the NBER Working Paper series. He has testified before the House Ways and Means Committee, the Senate Finance Committee, and the Senate Banking Subcommittee on Economic Policy on housing and economic issues. Prior to joining NAHB in 2005, Dietz worked as an economist for the Congressional Joint Committee on Taxation, specializing in revenue estimation of legislative proposals involving housing, urban development and other business tax issues. He is a native of Dayton, Ohio and earned a doctorate degree in economics from the Ohio State University in 2003.

WWW.NAHB.ORG

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Mark Vitner, MBA Managing Director & Chief Economist Wells Fargo Securities, LLC Wells Fargo & Company

Vitner’s responsibilities included tracking U.S. and regional economic trends. He also writes for the company’s Monthly Economic Outlook report and the Weekly Economic & Financial Commentary, provides regular updates on the housing markets, commercial real estate, regional economies, consumer spending, and issues impacting small business. His commentary has been featured in the New York Times, The Wall Street Journal, Bloomberg, and many other publications. Vitner serves as a distinguished lecturer and practitioner at the University of Georgia. He is a member of the American Economic Association and the Western Economic Association. He is a member of the Blue Chip economic forecasting panel and the Western Blue Chip forecasts panel, and he serves on the Joint Advisory Board of Economists for the Commonwealth of Virginia. Originally from Atlanta, Mark earned a B.B.A. in economics from the University of Georgia and an M.B.A. from the University of North Florida.

WWW.WELLSFARGO.COM

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DEMOGRAPHICS The Central South Carolina area includes Richland, Lexington, Kershaw, and Sumter counties.

POPULATION DENSITY PER SQUARE

POPULATION

MILE

16,592

295,062

84.9

375.4

414,576

106,512

507.9

161.6

Kershaw County Richland County

Lexington County Sumter County

Kershaw County Richland County

MEDIAN HOUSEHOLD INCOME

Lexington County Sumter County

TRAVEL TIME TO WORK MINUTES

$45,565

$57,482

Lexington County

26.8

Kershaw County

25.5

$52,082

$41,946

21.4

22.3

Kershaw County Richland County

Sumter County

Richland County

Lexington County Sumter County

SOUTH CAROLINA 5,084,127 Population

1,871,307

Number of Households

$220,000

Median Single-Family Home Sales Price

$48,781

Median Household Income

2,379,401 Labor Force

3.4%

Unemployment Rate

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NUMBER OF HOUSEHOLDS BY TYPE Kershaw County

100%

TOTAL

23,928

71.5% 17,114

FAMILIES SINGLE MEN 13.2% 3,163 SINGLE WOMEN

15.3% 3,651

Lexington County

100% 102,733

TOTAL

69.1% 70,952

FAMILIES SINGLE MEN 14.5% SINGLE WOMEN

14,875

16.5% 16,906

Richland County TOTAL

100% 61.5%

FAMILIES SINGLE MEN SINGLE WOMEN

17.3%

145,194

89,357

25,060

21.2%

30,777

Sumter County

100%

TOTAL

70.1%

FAMILIES

40,398

28,311

SINGLE MEN 14.2% 5,735 SINGLE WOMEN 15.7%

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If You Build It, Buyers Will Come People are hungry for moderately priced homes and ready to spend.

Lawrence Yun, Ph.D., Chief Economist & Sr. Vice President NATIONAL ASSOCIATION OF REALTORS® Consumer confidence remains high and many people are saying now is a good time to buy. Inventory is also increasing, reducing buyers’ concerns they’ll be elbowed out of the way when they try to buy.

But the market is bifurcated. Moderately priced homes are in high demand while upper-end homes are moving slowly. Affordability is what consumers are looking for. What happened with Amazon in New York is a cautionary tale. People rebelled against the company’s plans to locate there in part because of the upward pressure it would put on rents and housing prices. Other expanding technology companies could do well to look at affordable metro markets like Columbus, Ohio; Kansas City, Mo.; and Raleigh, N.C. With the economy set to grow this year, we expect to set a record with more than 120 “Moreover, 37 percent of consecutive months of GDP expansion. consumers strongly believe now More than 20 million net new jobs have been added, and the average wage rate is a good time to buy, according has increased to $23.18 per hour, up 3.5 to National Association of percent, the largest annual rise in a decade.

REALTORS® figures for the first Consumer confidence is following suit; the index reached 124 in March compared to the quarter of 2019, up from 34 50-year average figure of 93. Moreover, 37 percent in the prior quarter.” percent of consumers strongly believe now is a good time to buy, according to National Association of REALTORS® figures for the first quarter of 2019, up from 34 percent in the prior quarter.

Low mortgage rates help. But a good economy and more inventory are also boosting consumers’ outlook.

Even with the slowdown late last year, the price on a typical home soared to a new high at $259,300.

Now that buyer interest is up, you can expect home prices to rise even more. The expected price gain of 3 percent would bring the median price to around $265,000 and would lead to a commensurate gain in equity that could total $900 billion. Just as encouraging, people’s wage growth will outpace home price appreciation for the first time since 2010.

This is all good news, but we still need more supply. If builders can ramp up production of lowerpriced homes, plenty of business awaits them.

This article appeared in the May/June issue of REALTOR® Magazine.

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ECONOMIC IMPACT The real estate industry accounted for $40.9 billion or 17.8% of the gross state product in 2018. The following data indicated the economic impact of the typical home sale in South Carolina TOTAL ECONOMIC IMPACT

$17, 380

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TOP 20 BUILDERS The Top 20 Builders list is calculated by single family attached/detached building permits for the period January-August 2019.

1

603 | Great Southern Homes

2

506 | Mungo Homes

3 4

337 | Essex Homes 200 | DR Horton

5

81 | McGuinn Homes

6

79 | Eastwood Homes

7 8 9 10

67 | Ryan Homes, NVR, Rymarc 55 | Hurricane Construction 31 | Hensley Builders/LGI Homes 30 | Executive Construction

11

27 | Dean Gainey Construction

12

23 | C and C Builders of Columbia

13

20 | Wade Jurney

14

19 | Edge City Homes

15

16 | Schumacher Homes of SC

16

14 | Magnolia Custom Homes

17

13 | Epic Homes

18

13 | Southern Traditional Homes, Inc.

19

11 | Americas Home Place

20

8 | 3-way tie: JMJ Homes, Madison Home Builders & Richard Sanner

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HOUSING PERMITS Housing Permits History by County 2019 Data: Jan-August

2015

2016

2017

2018

2019

Kershaw County

161

174

135

195

185

Lexington County

930

1,006

1,047

1,061

1,133

Richland County

642

709

673

636

700

Sumter County

N/A

173

174

199

190

Housing Permits History by City 2019 Data: Jan-August

2015

2016

2017

2018

2019

Cayce

37

3

2

0

0

Columbia

183

144

227

308

297

Lexington

107

94

135

163

165

West Columbia

57

41

45

8

14

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SC REALTORS® STATISTICS

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REAL ESTATE INDICATORS Real estate overviews on the following pages were provided by the Central Carolina REALTORS® Association, and covers Richland and Lexington Counties. Additional information can be obtained through its website, centralcarolinarealtors.com.

As the summer draws to a Quick Facts as of August 2019 close, multiple opposing One-Year Change in One-Year Change in One-Year Change in factors and trends are Closed Sales Median Sales Price Inventory competing to define the direction of the real estate á1.4% á11.8% á8.0% market. After the Federal Reserve lowered its benchmark interest rate on July 31, 30-year mortgage rates continued to decline, approaching all-time lows last seen in 2016. Yet most experts agree these reductions are unlikely to bring sufficient relief, at least in the short term, for first-time home buyers. The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than-expected existing home sales at the national level.

New Listings

Data presented for new listings are a count of the properties that have been newly listed on the market in a given month. New Listings were up 8.3 percent to 1,620. Pending Sales increased 6.2 percent to 1,346, the eighth consecutive month of year-over-year gains.

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Inventory

Inventory represents the number of properties available for sale in active status at the end of a given month. During August, inventory grew 8.0 percent to 3,425 units.

Median Sales Price

Median sales price is the point at which half of the sales sold for more and half sold for less, not accounting for seller concessions, in a given month. In August, prices moved higher as Median Sales Price was up 11.8 percent to $185,000.

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Days on Market

Days on Market is the average number of days between when a property is listed and when an offer is accepted in a given month. During August, Days on Market decreased 5.7 percent to 50 days.

Months Supply of Inventory

Months Supply of Inventory is the inventory of homes for sale at the end of a given month, divided by the average monthly pending sales from the last 12 months. During August, Months Supply of Inventory was up 3.6 percent to 2.9 months, indicating that supply increased relative to demand.

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HOUSING ECONOMICS The Housing Starts, Employment, Housing Prices, and Housing Market Index overviews on the following pages were prepared by the Economics and Housing Policy Department of the National Association of Home Builders. Additional information including market research, economic forecasts, and housing statistics can be obtained, by subscription, through its website, housingeconomics.com or its daily economics blog eyeonhousing.org.

Housing Starts

Nationwide, the number of housing starts fell by 4.0% over the month of July 2019 to 1,191,000.

Single-family starts rose by 1.3% to 876,000. Multifamily starts fell by 16.2% to 315,000. Over the past 12 months, total housing starts are up by 0.6%. Single-family starts are up by 1.9% but multifamily starts are down by 2.8%.

In the South Region, which includes the state of South Carolina, the number of housing starts fell by 4.3% over the month of July 2019 to 600,000. Single-family starts fell by 3.9% to 463,000. Multifamily starts fell by 5.5% to 137,000. Over the past 12 months, total housing starts are down by 4.0%. Singlefamily starts are up by 1.3% but multifamily starts are down by 18.5%.

Single-Family Starts

Multifamily Starts

Total Housing Starts

United States

á1.9%

â2.8%

á0.6%

South Region South Carolina Columbia, SC

á1.3% â2.5% â16.6%

â18.5% á1.8% â73.9%

â4.0% â1.9% â22.1%

On a year-to-date basis, total permits over the past 12 months ending in July 2019 are down by 1.9% across the state of South Carolina to 20,886. Single-family permits are down by 2.5% to 17,951 but multifamily permits are up by 1.8% to 2,935. In Columbia, SC, total permits year-to-date are down by 22.1% to 2,390. Single-family permits are down by 16.6% to 2,314 and multifamily permits are down by 73.9% to 76.

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Employment

The United States added 2.2 million jobs over the past year.

Since reaching a low of 127.8 million in January 2010, total non-farm payroll employment, 151.2 million, is currently 8.4% above its pre-recession peak level of 139.5 million. Meanwhile, the unemployment rate is currently 3.7%, 0.2 percentage point below its level one year ago and 6.3 percentage points below its recession-era peak of 10.0%.

The U.S. added 2.2 million jobs over the past year.

The South Region, which includes the state of South Carolina, added 1.00 million jobs over the past year. Since reaching a low of 46.12 million in January 2010, total non-farm payroll employment, 55.04 million, is currently 9.9% above its pre-recession peak level of 50.10 million. Meanwhile, the unemployment rate is currently 3.6%, 0.1 percentage point below its level one year ago and 6.0 percentage points below its recession-era peak of 9.6%.

The state of South Carolina added 33.6 thousand jobs over the past year. Since reaching a low of 1.76 million in January 2010, total non-farm payroll employment, 2.18 million, is currently 11.0% above its pre-recession peak level of 1.97 million. Meanwhile, the unemployment rate is currently 3.4%, 0.1 percentage point above its level one year ago but 8.3 percentage points below its recessionera peak of 11.7%.

The South Region added 1 million jobs over the past year.

South Carolina added 33.6 thousand jobs over the past year.

Columbia, SC lost 200 jobs over the past year. Since reaching a low of 339.80 thousand in January 2011, total non-farm payroll Columbia lost 200 jobs employment, 402.10 thousand, is currently 8.1% above its over the past year. pre-recession peak level of 372.10 thousand. Meanwhile, the unemployment rate is currently 3.4%, 0.2 percentage point above its level one year ago but 6.3 percentage points below its recession-era peak of 9.7%.

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Housing Prices

Nationwide, house prices grew by 0.8% over the second quarter of 2019 and over the past year house prices across the country rose by 5.0%. At its low, reached in the second quarter of 2012, house prices in the US were 18.8% below their second quarter of 2007 peak level. Currently, house prices are 17.2% above their boom-related peak level.

Across the South Atlantic Division, a component of the South Region which includes the state of South Carolina, house prices grew by 1.1% over the second quarter of 2019 and over the past year house prices in the Division rose by 5.6%. At its low, reached in the second quarter of 2012, house prices in the South Atlantic Division were 26.3% below their fourth quarter of 2006 peak level.

Currently, house prices in the South Atlantic Division are 9.5% above their boom-related peak level.

National house prices rose by 0.8% over the 2nd quarter 2019 and by 5% over the past year.

South Atlantic Division house prices grew by 1.1% over the 2nd quarter 2019 and by 5.6% over the past year.

Across the state of South Carolina, house prices grew by 2.0% over the second quarter of 2019 and over the past year house prices in the state rose by 6.5%. At its low, reached in the second quarter of 2012, house prices in South Carolina were 12.8% below their fourth quarter of 2007 peak level. Currently, house prices in South Carolina are 20.2% above their boom-related peak level.

South Carolina house prices rose by 2% over the 2nd quarter 2019 and by 6.5% over the past year.

Across the area of Columbia, SC, house prices grew by 0.1% over the second quarter of 2019 and over the past year house prices in the metro area rose by 4.5%. At its low, reached in the first quarter of 2014, house prices in Columbia, SC were 12.4% below their second quarter of 2009 peak level. Currently, house prices in Columbia, SC are 9.9% above their peak level.

Columbia house prices increased by 0.1% over the 2nd quarter 2019 and by 4.5% over the past year

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Housing Market Index

According to the NAHB/Wells Fargo Housing Market Index (HMI), sentiment among builders for the single-family housing market nationally rose by 1 point to 66 over the month of August 2019. Over the past year, the HMI has fallen by 1 point from 67 in August 2018. Any value above 50 means more builders are seeing improvement rather than decline. The HMI fell to a low of 8 in January 2009.

Sentiment among builders for the single-family housing market in the South Region, which includes the state of South Carolina, was unchanged at 69 over the month of August 2019. Over the past year, builder sentiment in the South Region has fallen by 3 points from 72 in August 2018. Builder confidence in the South Region fell to a low of 10 in December 2008.

How to Interpret the Housing Market Index Any value above 50 means more builders are seeing improvement rather than decline.

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BIAofCentralSC.com @columbiabuilders

@BIAofCentralSC

Building Industry Association of Central South Carolina

Building Industry Association of Central SC

CentralCarolinaRealtors.com @CCRARealtors

@CCRAsc

@ccra.sc

CCRAsc1717

ColumbiaChamber.com @ColumbiaChamber

@ColaChamber

@columbiachamber

@ColumbiaChamber

MLAGCSC.org

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