Hampered by rising job losses and high numbers of foreclosures South Carolina housing markets are trying to reach a balance. But an onslaught of residents fleeing the state for new job opportunities is causing havoc with any sort of recovery.
Bargain hunters seeking to close transactions before the government imposed deadline to take advantage of the first time home buyers’ tax credit triggered a two-thirds rise in closed sales in Columbia. But the surge in transactions did little to raise housing prices in the state’s biggest market. The incentive helped to make up for buyer uncertainty in the face of a weak economy.
Lower home prices, near record low mortgage rates and the expansion of the tax credit should prod more buyers into the market the early part of the year, but ailing economic conditions and a deteriorating job base will hurt Columbia’s chances for any sort of robust recovery. Columbia is forecast to see average housing prices decline 11.2% in 2010.
An uptick in home sales also boosted Charleston from its downturn. The local government is taking over vacant properties to revitalize with federal surplus funds and then plans on re-selling or renting them in order to push Charleston’s housing market towards stabilization.
The special effort is particularly active around Charleston’s waterfront tourist area, where home prices are some of the most expensive anywhere in South Carolina. However, lower housing prices are taking a toll on Charleston, which is forecast to sustain housing deflation of 11.1% in 2010.
In Greenville homeowners are fleeing from their properties in rising numbers as the former text tile capital of the world suffers from fall out of the financial crisis. The tax credit triggered a flurry of sales, but slowed when buyers realized that asking prices on homes were still declining, some at double digit clips monthly. More people are out of work in hard hit Greenville in manufacturing and the construction trades than any where else in the state with forecast deflation for the year at 13.4%.
In tourist filled Myrtle Beach year-over-year home sales were down by more than 80% before the first time buyers’ credit took effect. However, the impact of the tax incentive has been less felt in Myrtle Beach since most of the buyers are second home or vacation destination purchasers. The expansion of the credit to move-up buyers should aid the market in the first half of the year, but won’t be enough to off-set falling prices. Myrtle Beach is forecast to sustain a decline in prices that will average 10.2% in 2010.
An over abundance of homes to choose from will make it difficult for South Carolina markets to start any real sort of recovery until the inventory is absorbed. Until the supply drops home and condo prices will decline along with a growing inventory of foreclosures due to hit the market in early 2010. Bankers are slashing home and condo prices to get foreclosures sold before the next round.