Housing Market Forecast - Home Builders Association of Greenville

HOUSING PROFILE
A Marketplace Snapshot
Housing + Real Estate + Home Building
for Greenville, Pickens, and Laurens counties, South Carolina
Produced by:
Home Builders Association of Greenville
Greater Greenville Association of REALTORS®
Sales and Marketing Council of the Upstate
Upstate Mortgage Lenders Association
Presented by:
WELCOME
Welcome to the Upstate Housing Market Forecast. We are happy to have, as our guest speaker, Dr.
David Crowe, Chief Economist and Senior Vice President, National Association of Home Builders.
We are excited about the development of this annual event. Each of our associations has independently produced economic briefings each year. This year, for the first time, the Home Builders Association,
the Greater Greenville Association of REALTORS®, the Sales and Marketing Council of the Upstate,
and the Upstate Mortgage LendersAssociation have partnered to produce a single annual event.
The document you are reading is a compilation of important information about the Greater Greenville
Housing and Real Estate Market. We are interested in your feedback on information you would like
to have from us in the future.
We also would like to thank our Presenting Sponsor, The Greenville News, for their generous support
of our program.
Susan Vernon, President
Home Builders Association of Greenville
Matthew Thrift, President
Greater Greenville Association of REALTORS®
Wendy Miller, President
Upstate Mortgage Lenders Association
Gary Cohen, Chairman
Sales and Marketing Council of the Upstate
About Dr. David Crowe
Dr. Crowe is responsible for the National Association of Home Builders’
forecast of housing and economic trends, survey research and analysis of
the home building industry and consumer preferences as well as microeconomic analysis of government policies that affect housing.
Before becoming NAHB’s Chief Economist, Dr. Crowe was NAHB’s Senior
Vice President for Regulatory and Housing Policy. Prior to joining NAHB,
Dr. Crowe was Deputy Director of the Division of Housing and Demographic
Analysis at the U.S. Department of Housing and Urban Development.
He has served on federal advisory committees to the Census Bureau and to
the U.S. Department of Housing and Urban Development. Dr. Crowe holds
a PhD in Economics from the University of Kentucky.
OUR COMMUNITY
Greater Greenville Market
Our study area, Greater Greenville, includes Greenville, Pickens, and Laurens counties. We have
gathered data, in one place, that is most commonly requested by our members.
Population:
653,498 (2012 - Greenville, Pickens, and Laurens counties)
Real Metro GDP:
$28.3 billion
Per Capita Income:
$35,700 (2012)
The U.S. Census Bureau provides all Americans with excellent data about our community. In this report we have
shown data that provides information about the quality of life in our Greater Greenville community.
Population Density
Cost of Living Index
The number of people per unit of land.
Measures relative price levels for consumer goods and services.
= 1000 people per square mile
Greater Greenville
U.S.=100
Greater Greenville
Raleigh, NC
Charleston, SC
896.5
Charleston, SC
Transit Usage and Stops
1,101.9
Raleigh, NC
2,896.3
Housing Density
The number of homes per unit of land.
= 500 housing units per square mile
Raleigh, NC
1,232.5
Greater Greenville
Charleston, SC
In the U.S. 69% of residents live near a transit stop, but
only 30% of jobs in the country are reachable by transit.
Residents Near Transit
Greater Greenville
Raleigh, NC
Charleston, SC
28%
46%
61%
Jobs Reachable by Transit
Greater Greenville
29%
Raleigh, NC
30%
Charleston, SC
27%
Average Travel Time to Work
U.S. Average: 25.4 minutes
1,026.1
188.6
90.3
98.2
98.3
Greater Greenville
Raleigh, NC
Charleston, SC
17.7 minutes
21.4 minutes
21.0 minutes
HOUSING MARKET SNAPSHOT
Our study area, Greater Greenville, includes
Greenville, Pickens, and Laurens counties. We
have gathered data, in one place, that is most
commonly requested by our members.
Housing Units By the Numbers
Number of Units/Type
1*: 188,940 (68.2%)
2-4: 12,765 (4.6%)
5 +: 37,099 (13.4%)
Mobile Home: 38,454 (13.9%)
*includes attached & detached
Year Built
Since 2000: 53,200 (19.2%)
1960-1999: 172,026 (62.1%)
Prior to 1960: 52,101 (18.8%)
Number of Rooms
1-5: 130,694 (47.2%)
6-8: 115,272 (41.5%)
9+: 31,361 (11.3%)
Number of Bedrooms
0-2: 96,825 (35%)
3-4: 170,983 (61.7%)
5+: 9,519 (3.4%)
$200,000-$499,999
40,315 (24.2%)
Owner vs. Renter-Occupied
Owner-Occupied: 166,503 (68.4%)
Avg. Household Size: 2.6
Value of Owner-Occupied Units
$500,000-$999,999
5,892 (3.5%)
277,327 Total Housing Units
$57,700 Median Income of Homeowner
$142,200 Median Home Value
33,862 Vacant Housing Units
2.3% Homeowner Vacancy Rate
8.3% Rental Vacancy Rate
$1 million or more
1,707 (1%)
Less than $100,000
52,928 (31.8%)
Recurring Impacts of
Renter-Occupied: 76,962 (31.6%)
NewAvg.
Home
Construction
Household Size: 2.5
Other Data
Year Householder Move In
Since 2000: 155,074 (63.7%)
Prior to 2000: 88,392 (36.3%)
Homes with 3+ Vehicles
51,339 (21.1%)
Sources of Heat
Natural Gas: 90,641 (37.2%)
LP Gas: 9,362 (3.8%)
Electricity: 133,068 (54.7%)
Other: 9,806 (4%)
$100,000-$199,000
65,661 (39.5%)
Owner-Occupied Housing Units
Monthly Owner Costs
With a Mortgage
Without a Mortgage
< $1,000/month
38,291 (35.5%)
< $200/month
9,189 (15.8%)
$1,000-$1,999/month
62,296 (50.5%)
$200-$399/month
31,441 (53.9%)
> $2,000/month
> $400/month
15,216 (14.1%)
17,650 (30.3%)
Occupied Units Paying Rent (Gross)
> $500/month
$500-$999/month
> $1,000/month
12,201 (17.2%)
46,207 (65.3%)
12,309 (17.4%)
58,280 (35%)
Housing Units
with No Mortgage
108,223 (65%)
Housing Units with
a Mortgage
HOUSING + CONSTRUCTION
In 2007 and 2008 the Home Builders Association of Greenville commissioned the Housing Economics
Department of the National Association of Home Builders to conduct an analysis of the economic impact
of Home Building in Greenville County on the Greater Greenville area. The study found a substantial
impact and rapid contribution to the demands that the homes added have on the community’s governments and infrastructure.
Single-Family Homes
Constructed
1,852
(-48%)
2007
2008
$308.8
(-39%)
3,553
0
Taxes/Fees to Local
Governments (millions)
Local Income Generated
(millions)
$51.2
(-22%)
$507
500 1000 1500 2000 2500 3000 3500 4000
0
100
200
Local Jobs Created
300
5,388
(-51%)
$66
400
500
600
0
10
20
30
10,906
40
50
60
70
80
0
2000
4000
6000
8000
10000 12000
Greenville County
Single-Family
The additional, annually recurring impacts of building 1,852 single-family homes in Greenville County include:
Recurring Impacts of
New Home Construction
Single-Family Homes
Constructed
2007
2008
Local Income Generated
(millions)
$68.4
(-45%)
532
(-46%)
$125
990
$45.1 million in local income
0
200
400
600
800
1000
0
Taxes/Fees to Local
Governments (millions)
$12.3 million in taxes & other
revenue for local governments
2
4
6
90
120
150
1193
(-59%)
$12
0
60
Local Jobs Created
$9.3
(-12%)
879 local jobs
30
2,893
8
10
12
0
500
1000
1500
2000
2500
3000
Greenville County Multi-Family
The additional, annually recurring impacts of building 532 multi-family homes in Greenville County include:
$13.9 million in local income ● $3.7 million in taxes & other revenues to local governments ● 234 local jobs
Does growth and new construction pay for itself? Yes!
For every 1,852 single-family and 532 multi-family homes built:
Economic Impact Offsets All Fiscal Costs
$2 Million+ in Net
Income
$25 Million+ in Net
Income
By the end of the first year
after these new homes are
built, economic impacts offset
all fiscal costs of serving the
new homes, including infrastructre costs.
By the end of the second
year, these new homes are
contributing net income to
local governments of more
than $2 million per year.
After 10 years, these new
homes have contributed net
income to local governments
of more than $25 million,
which keeps area property
taxes lower.
HOUSING STARTS HISTORY
Housing starts are a key indicator of the economic health of an area.
2010
2011
2012
2013
2014 (proj.)
1.6
9.6%
1.7
7.1%
2.4
37.8%
2.9
21.4%
3.5
21.1%
Single Family
Starts (1000’s)
Percent Change
Share
1.5
9.1%
95.9%
1.6
6.8%
95.6%
2.3
38.1%
95.8%
2.5
12.4%
88.7%
3.1
21%
88.6%
Rapid growth or decline is an indication of
other factors like speculation.
Multi-family
Starts (1000’s)
Percent Change
Share
.1
.1
24.9% 15.5%
4.1%
4.4%
.1
31.9%
4.2%
.3
224.9%
11.3%
.4
22%
11.4%
A change in the ratio of single family and
multi-family is an indicatior of change in
demand and potential for speculation.
Total Housing
Starts (1000’s)
Percent Change
Key Insights
Steady decline is an indication that a
community is stagnating.
Source: United States Census Bureau
Building Permits (Greater Greenville)
High End Homes3
2010 1,391 permits (2.7% change)
25
2011 1,591 permits (14.4% change)
20
2012 2,088 permits (31.2% change)
15
2013 2,340 permits (12.1% change)
10
2014 2,514 permits (7.4% change)
5
*proj.
0
500
1000
1500
Greenville
County
21.5%
2000
2500
3000
0
County Building Permits
Greenville County
Laurens County
Pickens County
Asheville, N.C.
Columbia, S.C.
Charlotte, N.C.
Traid, N.C.1
Traingle, N.C.2
1,169
61
161
1,532
2,252
5,845
2,342
5,858
2010
16.2%
-37.1%
-35.9%
-16.1%
0.5%
-6.5%
-8.6%
4.0%
2011
1,280 10.3%
-13.1%
53
249 54.7%
1,315 -14.2%
2,204 -2.1%
6,030 3.2%
2,214 -5.5%
5,494 -6.2%
2012
1,869 45.0%
-11.3%
47
172 -30.9%
1,478 12.4%
2,624 19.1%
7,874 30.6%
2,284 3.2%
7,278 32.5%
2,025
62
253
803
3,057
9,869
2,887
9,624
Pickens Laurens
County County
3.0%
0.6%
2013
8.3%
31.9%
47.1%
22.0%
16.5%
25.3%
26.4%
32.2%
2014 (proj.)
6.3%
2,152
0.0%
62
18.6%
300
7.6%
1,940
2,430 -20.5%
10,048 1.8%
9.7%
3,166
-6.2%
9,024
1
Winston-Salem, Greensboro, High Point; 2Raleigh, Durham; 3Homes over 4,000 square feet or $400,000 permitted value
Source: Market Edge
SALES
10000
Single-Family Units Sold*
2.0
Transactions in Billions*
8000
$1.934 (+13.0%)
’14
$1.710
’12 ‘13
0.0
‘10
‘11
’12 ‘13
’14
$1.343
‘11
0.5
$1.100
0
1.0
$1.123
2000
9,942 (+8.5%)
6,395 (-2.1%)
‘10
4000
9,160 (+23.2%)
6,530
6000
7,433 (+16.2%)
1.5
Current Active (as of 1/10/15)
Units
4,870 (+0.1%)
Volume (billions) 1.383 (+8.5%)
Average Price
$284,074 (+8.4%)
Median Price
$209,000 (+11.8%)
Average DOM 149 (-5.7%)
*While representative of market activity, this report may
not include all sales brokered by Member firms and
should not be viewed as all inclusive of sales transacted
within the market during the time referenced.
Source: Greater Greenville Association of REALTORS®
AFFORDABILITY
NAHB Housing Opportunity Index
The Housing Opportunity Index is a measure of housing affordability. Produced by the National Association of Home
Builders, the Housing Opportunity Index measures the share of homes sold in a given area that are affordable to a family
earning the local median family income, based on standard mortgage underwriting criteria.
Greater Greenville HOI: 78
PRICED OUT EFFECT
Median Price: $163,000
Median Income: $58,200
An often overlooked impact of overregulation of Home
Building is the affect it has on housing affordability. Every
time government issues or changes a regulation that raises
construction and development costs, some families are
Priced Out of homeownership. The National Association of
Home Builders produces a report of households Priced Out
of homeownership by a $1,000 increase in the price of a
home.
National Rank: 73 (out of 227 MSAs measured)
Therefore, 78 percent of the homes sold during the third
quarter of 2014 were affordable for a family earning the
median income. Greater Greenville is consistently in the
top third of the markets measured by the Housing Opportunity Index. However, our region is still at risk in terms of
affordability. Since the fourth quarter of 2012 our index has
dropped from 84.7 and has been as low as 52.8 (2006).
Greater Greenville
Median New Home Price: $277,468
The Housing Opportunity Index uses two major components: income and housing cost. For
income, the index uses the median family income estimate published by the U.S. Department of Housing and Urban Development. The index assumes a family can afford to spend
28 percent of its gross income on housing. For cost, the index uses data collected from
CoreLogic. The monthly principal and interest that an owner would pay is based on the
assumption of a 30-year fixed-rate mortgage with a 10-percent down payment. The interest
rate is the weighted average of fixed and adjustable rates for the quarter as reported by the
Federal Housing Finance Agency. The cost also includes estimated property taxes and
property insurance for the area based on data gathered from the American Community
Survey.
Income Needed to Qualify: $67,903
Percent of Households that can Afford: 34
Greater Greenville Households Priced Out: 380
The Priced Out methodology is similar to the Housing Opportunity Index and uses the
same data. The model simply measures how many households can qualify for a mortgage
before and after a $1,000 increase in the price of a home. This report was updated in 2014.
SUPPLY VS. DEMAND
Leading Markets Index
The National Association of Home Builders measures, on a quarterly basis, the relationship of individual housing markets
around the country to a measure of normal. The study uses, as a basis for normal, a prior year that is judged as normal. For
most of the country, including Greater Greenville, 2002-2003 is considered to be normal. The study measures three characteristics: Jobs, Building Permits, and Housing Prices. A score is developed with 100 being normal, for each characteristic.
The three scores are averaged for a community score.
Third Quarter 2014
Overall
Permits
Prices
Employment
Greater Greenville, SC
0.91
0.59
1.19
0.94
Asheville, NC
0.92
0.46
1.35
0.95
Charlotte, NC
0.85
0.45
1.17
0.91
Columbia, SC
0.87
0.58
1.10
0.92
Greensboro, NC
0.75
0.30
1.06
0.89
Raleigh, NC
0.89
0.39
1.28
1.01
Greater Greenville reached its trough in March 2012 with an index of 0.78. It peaked in November 2006 at 1.11.
With building permits running well and consistently below normal, and housing prices rising to historically high levels, a
fair assessment can be made that, like many Southeastern markets, the Greater Greenville area has a supply vs. demand
imbalance that is contributing to a lack of affordability, a flattening of house price growth, or potentially a drop housing
prices in the future as production reaches normal.
Produced by:
Home Builders Association
of Greenville
Greater Greenville Association
of REALTORS®
HBAofGreenville.com
GGAR.com
Facebook.com/HBAofGreenville
Twitter: @HBAofGreenville
YouTube: @HBAofGreenville
Sales & Marketing Council
of the Upstate
HBAofGreenville.com/SMC
Upstate Mortgage Lenders
Association
Data Compiled by:
Michael Dey, Executive Vice President
Home Builders Association of Greenville
Chris Bailey, Director of Governmental Affairs
Greater Greenville Association of REALTORS®
Designed and Published by:
Leigh Ann DeYoung, President
N-tegrate Media, Marketing & Sales
Facebook.com/SMCoftheUpstateSC