South Carolina economy doing well. Strong broad-based, statewide expansion expected in 2016.

Home sales in the Charleston region are expected to remain strong in 2016, but growing at a slower pace than last year according to economist Dr. Joey Von Nessen, who delivered his outlook to a gathering of the Charleston Trident Association of Realtors on January 12th at Trident Technical College.

“2015 was another good year of solid growth,” he said. “We expect that to continue. South Carolina is doing well, and we are in a strong position going into 2016. Our expansion is strong, broad-based and statewide.”

Read the full article here.

JOSEPH VON NESSEN, Phd, TO PRESENT AT ASSA CONFERENCE IN SAN FRANCISCO

Dr. Joseph Von Nessen is presenting a research paper examining the effect of school quality on housing prices at the annual conference of the Allied Social Science Associations, which includes the American Real Estate and Urban Economics Association. The paper being presented used a specific statistical method to test the degree to which certain school quality measures are capitalized into housing prices in the Charleston, SC market and can be adapted to determine the effect most housing variables have on prices. 

Specifically, during the housing boom years (2001-2007) when the No Child Left Behind (NCLB) legislation was in place, were homebuyers willing to pay a premium for houses zoned for high schools that received a "passing" NCLB rating - known as "adequate yearly progress?" The findings indicate that the answer is yes, and that the price premium was as high as 5%. 

This result represents a specific application of a more general modeling technique methodology to quantify how potential homebuyers value a wide variety of non-traded housing amenities (e.g., school quality, proximity to downtown, sidewalks, homeowner's associations, etc…). The process can be used by builders and developers to aid in a cost/benefit analysis when looking to decide on which features are most important to their potential customers.

New Home Sales Increase in August

New home sales are at their highest level since August 2008 - a strong starting point for the Fall season.  August's new, single-family homes are up 5.7% over July of this year and up 18% over August of last year.

The positive increase in sales is attributed to low interest rates and better job creation.

New home sales make up 10% of the housing market with the other 90% coming from existing home sales.

According to a survey by the National Association of Home Builders, builder sentiment is at its highest level nearly a decade - the highest since November 2005.  Builders reported better sales conditions and increased buyer traffic.

The median home price comes in at $292,700, an 0.3% increase from this time last year.

Experts estimate there is a 4.7 month supply of new homes still on the market. With concerns over a possible rate increase coming later this year - now is the time to buy!!

DR. VON NESSEN PRESENTS RESULTS OF SC PORTS IMPACT STUDY

South Carolina Ports Authority (SCPA) generates $6.3 billion in annual economic activity in the Lowcountry region and $53 billion statewide, according to the results of a study conducted by Dr. Joseph Von Nessen and released September 14, 2015, highlighting SCPA's role as an economic driver and key competitive advantage for South Carolina. 

Read a summary of the results here.

"The Port is our state's most strategic asset," said Jim Newsome, SCPA president and CEO. "It enables South Carolina to recruit and serve the needs of companies with international supply chains, and in doing so, spurs economic development opportunities and generates well-paying jobs for people across the state." 

OUTLOOK FOR NEW JOBS FOR THE REMAINDER OF THE YEAR ENCOURAGING

Probably the most important indicator of the direction of the housing market is the growth in employment, more specifically new employment growth. 

Market Watch reports positive expectations for the remainder of the year.

While this article addresses the overall US economy, it is not unrealistic to expect that local markets will also experience the positive impact of job growth even though local results may be greater or smaller than the national averages.

DR. JOSEPH VON NESSEN TO ADDRESS THE LEADERSHIP SOUTH CAROLINA CLASS OF 2016

The role of economic indicators in making business decisions is the topic of an address by Joey Von Nessen presented to the 36th class of Leadership South Carolina.

"The strength of the South Carolina economy is evidenced by a 3% job growth, the highest rate since 2010. Job growth is a key indicator in any evaluation of economic activity. But other factors can provide perspective on appropriate expectations for the future. Will growth continue, lag or actually stagnate? Business leadership needs to recognize the supportive role of other economic metrics in order to minimize the risk inherent in any business decision."

Dr. Von Nessen will make his presentation at the meeting of Leadership South Carolina at the South Carolina Chamber of Commerce on September 10, 2015.

Leadership South Carolina was established in 1979 by the Governor's Office and the South Carolina business community. As the oldest and most respected of the statewide leadership programs in the state, Leadership South Carolina provides gifted and highly motivated South Carolinians an opportunity to advance their leadership qualities while broadening their understanding of issues facing the state.

The recent turmoil in the equity markets has prompted questions regarding the overall economic health of the South Carolina Economy. While no one can predict the future, there are a number of indicators that can provide insight on economic activity in our state.

Most comments regarding the market volatility address the current situation in China, and this is an important factor in our economy. It is not widely publicized that South Carolina is one of the largest exporters of products in the United States, so there is substance to the comment that when China sneezes, we catch cold. But there are positive factors also at work.

Construction has come back from a difficult recession to assume its rightful place as a leader of the economic recovery. Manufacturing in our state has shown growth and stabilization. Even the assumed rate increase anticipated from the Federal Reserve will help those living on retirement investments, a significant and growing segment of our population.

The most important factor however, is emotion. The feelings of consumers will impact those intangibles in the economy and either support or undermine our progress, but it is too early to come to a conclusion. There has been no market correction in some time, we are in the seventh year of our recovery and business cycles usually follow a seven year track, but our fundamentals are strong, and we have begun to build momentum. Every sports fan knows that that may be the strongest indicator of the ultimate outcome.

Bottom line is that it is too early to panic but awareness and investigation are always appropriate. Right now that is probably the best course of action to take.