Charleston Home Sales Way Behind Projections

Home sales projection off to a rough start

May 19, 2008

By Katy Stech – The Post and Courier

When the Charleston Metro Chamber of Commerce and the College of Charleston released their annual economic forecast in March, the real estate market predictions stole the show.

The group’s forecast, based on figures spit out by an econometric forecasting model, called for the local housing slump to reverse over the course of the year. It predicted that the year’s home sales, a dominant indicator of market health, would beat last year’s numbers by an encouraging 6 percent. Specifically, it calls for 12,972 Charleston-area home sales in 2008. Last year, 11,530 homes changes hands.

But my skepticism about this projection grows each month with the arrival of new sales figures from the Charleston Trident Association of Realtors. For the first four months of this year, sales numbers haven’t increased over last year. In fact, they’ve fallen far below last year’s numbers, by 29.9 percent so far.

That’s a lot of catching up to do during the next 7 1/2 months.

Mary Graham, the chamber’s senior vice president for public policy, said she’s still optimistic about hitting a 6 percent increase. She said the local real estate market perked up a bit in April, and she pointed to a national pickup in construction permits.

Plus, the forecast does call for the turnaround to happen in the second part of the year.

“I still think that all the second half of the year is going to be stronger than the first,” she said.

College of Charleston economics professor Frank Hefner doesn’t think local home sales will record a 6 percent increase. Instead, he predicts “maybe some growth” by the end of the year.

Growing industry, which leads to more jobs, is the key economic factor that will determine an uptick. So far, that indicator is expected to be positive throughout 2008, he said. “How positive? That’s the big question,” he added.

If sales don’t meet the chamber’s projections, it would mark the second year that the group’s forecast called for an increase in sales but the region ultimately recorded fewer sales.

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