According to the National Association of Realtors, housing sales dropped more than 27 percent in July, the largest monthly decline recorded since 1968.
Professor William Harrison directs the Real Estate Center at the University of South Carolina’s Moore School of Business and says the three-year real estate crisis has been very uneven across the country.
South Carolina has not had the degree of magnitude, severity of price decline, sales declines as other parts of the country have. That isn’t to say that we aren’t having a very bad time here in South Carolina. We are. And it’s, historically it’s unprecedented. We aren’t having the calamitous decline that you’ve seen in Florida, the dessert southwest, some of the areas in the great lakes.
The South Carolina Association of Realtors says real estate sales have dropped by 21.5 percent over the last year.
Professor Harrison says that the marketplace must be allowed to correct itself.
What’s really going on in the market place right now, is the inevitable correction. The reason that it’s making the news today is because the government props that has been trying to support the severity of the correction, are now over. And we are now, I told someone earlier, we are now left naked.
While mortgage rates are at historic lows, Harrison says if there’s no consumer confidence, it doesn’t matter how low the interest rates go.
I’m a developer, myself, and have spent 37 years in the trenches in the development industry. We used to say, “It’s the interest rates, stupid.” It’s not anymore. Right now it is a matter of consumer confidence and jobs. If interest rates were to go to zero today, I’m not sure it would materially effect housing prices or housing sales.
The latest national report tells us that existing home sales fell 35% in the Midwest, 30% in the Northeast, were down 25% in the West and 23% in the South. Professor Harrison says that South Carolinians may be better off than others.
We need to take some comfort here in South Carolina that we are not going to see the kinds of declines that other parts of the country are seeing. There is still some more price deterioration that we’re going to see here in South Carolina, just like the rest of the country, but ours isn’t going to be as severe.
Many economists are predicting some improvement in housing sales this fall, but they say sales will be weak until unemployment comes down.