Economist sees boom in Upstate housing, real estate

Lawrence Yun, chief economist at the National Association of Realtors, isn’t puzzled by the current state of American politics.

As he addressed about 200 local real estate professionals and guests Thursday, Yun called the rapid emergence of Donald Trump and Bernie Sanders “a testament of Americans’ frustration with Washington.”

That frustration is because seven years of below average gross domestic product growth rate has robbed consumers, Yun said at the annual Western Upstate Association of Realtors Luncheon at the Hilton Garden Inn in Anderson.

“If the economy had grown at 3 percent since 2008, each American would have an average of $5,000 more in his pocket each of those years,” Yun said. “So we have a recovery, but something doesn’t feel right. It’s the $5,000 we don’t have in our pocket. That’s a consequence of a subpar economic performance for a long time.”

Yun, one of the nation’s top economic forecasters, said weak growth in full-time employment and wages are the result of below average growth in the GDP.

One consequence is the lowest homeownership rate in 50 years, which Yun considers a key factor in the shrinking of the middle class.

Another factor, Yun told the real-estate audience, is a drop in the number of homes being produced by builders since the Dodd-Frank Act became law. That 2010 change created new regulations that have made it more difficult for small local homebuilders to obtain loans.

“Homebuilders are still dragging their feet,” Yun said, “and a big part of it is because federal regulations have taken small homebuilders out of the game.”

 

Yun foresees a “pent-up” housing market in Anderson and much of the Upstate, one he thinks will trigger “favorable growth in four of the next five years.”

With rental rates at a seven-year high and employment numbers rising, Yun foresees more Upstate residents becoming homeowners.

“Pending home sales are up 19 percent (over 2014) in the last six months in the western Upstate. That’s three times the national average,” Yun said.

That pace has raised the median price of area homes by 10 percent in the past year — to $149,000.

Yun, who attended elementary and secondary schools in South Carolina, has been a National Association of Realtors economist since 2000. Before that, he worked as an economic consultant to the federal departments of Veterans Affairs and Education.

Despite the slow growth, Yun gave the Realtors and real-estate agents a forecast they had hoped to hear — that better times are ahead.

“The background for a recovery is in place,” he said.

Nick Kremydas, CEO of the South Carolina Association of Realtors, expects that to be especially true in the Upstate and the coastal areas of the state.

“In the Upstate and the coastal areas, you have job growth, and those are attractive places to live,” Kremydas said. “That’s a good situation for the real estate market.”

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