The housing market is expected to get better, but just how soon is another question, an industry analyst said Wednesday morning.
Bill Lattimore Jr., CEO and president of The Lattimore Group, told Effingham Chamber of Commerce members at their monthly membership breakfast that the Coastal Empire is in a better position than many other parts of the nation and should come out of its housing slump.
“We’re going to get through this slump in the credit markets,” he said. “We’re in a pothole, but it’s a pretty big pothole. If we can get through this financial malaise we are in now, the structure is there for us to enjoy the market we had. We’re not going to come out of this overnight, but I’m bullish on this market.”
Lattimore’s group operates Coastal MarketGraphics, part of a network of MarketGraphics affiliates in 19 other states that tracks such things as building permits, construction starts and what it considers sales. The market area stretches from Camden County through Beaufort and Jasper counties in South Carolina. They also just added four counties in the Charleston, S.C., area to their fold.
In counting housing starts, Lattimore’s team takes account of each foundation being laid.
“There’s a lot of permits that get pulled and nothing gets started,” he said. “We drive every subdivision every four months and count what’s going on.”
Building permits in their coverage area nearly doubled in 10 years as they went from 5,399 in 1995, when they first started tracking the number, to 10,593 in 2005. Those permits fell to approximately 9,800 in 2006 and to 6,600 in 2007. Building permits in Effingham went from nearly 1,000 to back down to around 400 per year.
Lattimore said the number of building permits for January and February of this year has been “incredibly low.”
They also count the number of building permits in the nine-county area and divide it by population.
“Anything over 1 percent is a vibrant and growing market,” Lattimore said.
A year and a half ago, Coastal Georgia was at 1.8 percent and is slightly over 1 percent now, he said.
They also track the unsold inventory of homes.
“We’ve got our share of that,” he said.
His group reports on housing numbers every four months, and their research showed there were 1,512 starts in the quarter ending in February, down from 2,600.
Lattimore said the dramatic reduction in the Coastal Empire housing starts has happened in the area faster than in other markets, but one positive is that it will keep the unsold inventories down. That will help spur the recovery once the housing market rebounds.
The optimal unsold inventory is between 2 and 2.5 percent, Lattimore said, and current local unsold inventories are running about twice that figure.
“When the market turns around, we can get out of this thing and we can get out of this thing quickly,” he said.
When counting sales, Lattimore’s firm counts occupied homes, even though some homes may be rented and others have been sold but the new owners haven’t moved in. Their research showed there were 1,856 sales in the last four-month reporting period.
“In the state the market is in now, that’s a pretty impressive number,” he said. “The market is not dead by any means.”
The Coastal Empire also needs to brace for the coming storm of the baby boomers. That generation of wage earners from the Northeast and Midwest is expected to start moving to where the sun and the water are in the next few years.
“We started seeing that at The Landings 20 years ago,” Lattimore said.
While it’s a buyer’s market, the belief some homeowners have that they can’t sell their existing home while they want a new one also extends to the boomers.
“As soon as people get more confidence in the market, we’re going to have a significant demand that can be enjoyed,” Lattimore said.
He cautioned it might get worse before it gets better for the local housing market, but he believes there are several factors that mean better days are ahead — the continued growth at the port, tourism and the expansion of education programs.
“We have a lot of huge, tremendous momentum behind this area,” Lattimore said. “The market fundamentals are intrinsically, inherently stronger in Coastal Georgia. Our economy is healthy. We have job growth. Add on to that the boomers are coming, and the sheer numbers are overwhelming.”