Great News for our housing market
By Liz Segrist
Published March 14, 2016
More than 9,000 net new jobs were created in the Charleston region last year and at least 20,000 more are expected by the end of 2017, according to the Economic Outlook Forecast produced by the Charleston Metro Chamber of Commerce and the College of Charleston.
Those numbers put the region well on its way to hitting 25,000 jobs by 2019, which the Charleston chamber predicted in its 2014 Talent Demand Analysis.
Last year’s forecast:
The Economic Outlook Forecast is the result of tracking and analysis of regional economic indicators, such as number of new jobs, unemployment percentages, housing permits, real estate sales and tourist numbers. CofC research economist Frank Hefner reviews the data and a projection is created using a forecasting model.
In addition, a board of industry leaders provides insights into current conditions and challenges, as well as other factors that might influence the data. Based on the region’s post-recession job growth, the board rejected the computer-produced indicators this year and adjusted each one upward.
“In many ways, it said we weren’t going to grow very much, and we all knew there was way too much happening in our community for that to happen,” Mary Graham, the chamber’s chief advancement officer, said Thursday during the 25th Economic Outlook Conference in North Charleston.
When the chamber began producing the forecasts 25 years ago, the Charleston region had 500,000 residents and the Navy base and tourism sector defined much of its industry.
The region has since added more than 200,000 residents and 106,000 net new jobs, “and that’s with the Navy base closing and the Great Recession,” Graham said. Boeing, Mercedes-Benz Vans and Volvo Car Group are creating an automotive and aerospace hub in Charleston, and tech companies are expanding in the area.
Average home sale prices have jumped 238% over the past 25 years to a median price of $229,000 as of the end of 2015, according to the forecast. Retail sales have jumped from $8 billion to $24 billion during that time.
“But probably the most dramatic thing that’s happened is the absolute transformation and diversification of our region’s economy,” Graham said. “Twenty-five years ago, we were a United States military town and tourism was here, and those were really our economic engines. Today, we are a high-tech, advanced manufacturing, STEM-based economy — and yes, tourism and military are still a very important part of our economy, but there’s so much, much more.”
Airport: The region’s tourism and business economies are expected to continue bumping up passenger volumes atCharleston International Airport. Several airlines have ordered larger airplanes, which Graham said supports the forecast of 6% passenger growth in 2016.
Tourism, hotels: Charleston continues to be regarded internationally as tourist magnet, which helps the region attract around 5 million visitors annually.
“This is what happens when you’re the No. 1 tourist destination in the country several years in a row,” said Graham, referring to Conde Nast Traveler’s annual ranking of best small U.S. cities.
The region’s challenge now is to strike a balance between nurturing that industry and maintaining quality of life for residents, Graham said.
Additional nonstop flights at the airport, as well as new restaurants and hotels in the region, spurred a prediction that hotels’ revenue per available room will increase 5% in 2016. The average daily hotel rate last year was $143.75.
Graham said the region’s tourism sector is so robust that the influx of hotel construction on the peninsula is expected to absorb it. The city created a committee last month to study whether too many hotels are being built in Charleston.
Port: The forecast projected moderate growth of 3% for containerized cargo coming through the Port of Charleston in 2016. The S.C. State Ports Authority has reported a drag in cargo volumes for several months, which could be from the traditional seasonal blip or could be the result of slowing world trade.
The opening of the Panama Canal expansion later this year and continued work on the harbor deepening project, which will bring Charleston Harbor to 52 feet, is expected to boost volumes by 8% in 2017, Graham said.
Population growth, residential real estate: Growth in the tourism, manufacturing, technology and health care sectors has played a big role in attracting a flood of new residents — averaging out to about 30 each day — to the region. The 730,000-resident population is expected to hit 1 million by 2027.
New jobs and residents have created a flurry of construction of single-family homes, apartments and mixed-use communities.
The report predicts a 10% boost in single-family residential permits this year. Home sales are expected to climb 6%, with the average sales price following at 4%. The region’s 2015 median home price of $229,000 is expected to hit $238,000 this year, data show. The median was $236,484 in February, according to monthly numbers from the Charleston Trident Association of Realtors.
Development of multifamily units is expected to continue, but Graham said the pace is forecast to slow because 10,000 units are already either permitted or under construction.
“We have a region with a very strong, robust economy. ... Now we need to focus on sustaining it. We want to make sure the economic prosperity that’s happening in our community is happening for everyone, not just for some,” Graham said. “We have issues we need to address.”
Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.