The South Carolina economy is suffering. Builders are laying-off workers. Factories are shutting down. Home developments have been placed on hold or cancelled and bankruptcies are rising amid a growing unemployment rate that could reach 14%, crippling the housing market.
The economy has gotten so bad in South Carolina that Governor Mark Sanford is calling for elimination of the state's corporate income tax, and to lower individual state income taxes. The former textile capital of the world has lost hundreds of thousands of jobs over the last decade and the housing market is reeling with foreclosures.
South Carolina is projected to lose another 22,000 jobs in 2009, and as homeowners lose jobs foreclosures increase. In Columbia, the state's largest city, falling tax revenues are impacting the city's budget. Housing prices have fallen as much as 40% from the market's peak, and increasing foreclosures are projected to produce a sluggish home market again in 2009. Housing Predictor forecasts Columbia homes will deflate 15.7% on average during the year.
The housing bubble meltdown and the fall of financial markets are also taking a toll on Charleston and neighboring Summerville, where home sales are only nearly supported by the sale of foreclosures. The market has been decaying for more than two years, but the state's economists say South Carolina is just entering the recession.
 |
| City |
Forecast |
| Columbia |
− 15.7% |
| Charleston |
− 14.8% |
| Myrtle Beach |
− 13.6% |
| Greenville |
− 14.5% |
Things are expected to get much worse in Charleston, where home sales will slow further. After years of double-digit appreciation, Charleston has a long way to fall. Charleston's homes are forecast to lose 14.8% in average values in 2009.
In Greenville, the former text tile capital, more homeowners are giving up on paying the mortgage, forced to walk away as a result of higher mortgage payments and a decaying economy. The credit crisis is hitting hard in Greenville and nearby Spartanburg, which could have more people out of work in 2009 than since the Great Depression. As a result of the weakening economy, rising foreclosures and slower home sales Greenville homes are forecast to deflate 14.5% for the year.
An excessive inventory of condos and houses are pressuring prices in Myrtle Beach, long regarded as an ideal vacation spot for Easterners. The inventory of properties for sale is growing at a time when most markets are experiencing less homes marketed for sale. Two-bedroom condos can be had for $51,900, which sold at the market's peak for more than double.
Vacation markets aren't immune from the falling prices even Myrtle Beach, which attracts many summertime visitors, is ailing amid a decelerating housing market. Sales are projected to be slow again in 2009 as prices are forecast to fall another 13.6% on average.
