As Charleston’s population grows by roughly 34 people every day, housing demands are rising, debts are looming, inflated goods are steadying and Charleston’s job market is strengthening, according to the Charleston Metro Chamber of Commerce Annual Economic Forecast.
The annual economic forecast, revealed this week at the chamber’s Economic Outlook Conference, was a partnership project between the Charleston Metro Chamber of Commerce and College of Charleston’s Office of Economic Analysis. The data was collected from national and state agencies.
Housing demands in Charleston grow with the population.
Most of the housing market today is starter homes and building permits. About 60% of homes owned today have a mortgage rate of 4% or less, so Witte predicts most homeowners are likely to remain in their home.
According to the chamber’s forecast, attaining housing is a “critical challenge” for the Charleston region, the limited stock is keeping prices on the rise. Since 2018, the average sales price for residential homes has risen nearly 80%.
Most elements which keep housing prices at their height include a high 7% mortgage interest rate, building costs and less construction companies post-COVID-19 trying to do the same amount of work, Mark Witte, professor of economics at the College of Charleston, said.
Nonetheless, the Charleston area sees the same number of housing permits as areas such as Boston, which has four times the population, Witte said.
“This speaks of the fact that people want to live here, they want to relocate here for the variety of reasons that we know,” Witte said. “That is continuing to grow the amount of housing stock that we have available.”
Rent increased in 2021 and 2022 but today the rent has remained consistent at those increased rates, Witte said.
What impacts will be seen on the costs of goods and services?
While most COVID-19 and inflation spikes have balanced out, one element is predicted to remain high: prices of goods, Tatiana Bailey, founder and executive director of Data-Driven Economic Strategies, said.
“The reality is that sort of ‘normal paradigm’ that we all experienced of low prices for a very long time, that is probably behind us,” Bailey said.
Bailey said the baseline for goods has risen nearly 35% so inflation figures are lowering but sticking to that higher rate.
According to Witte, retail sales are mitigated as consumers face increased financial pressures through housing costs, credit card debts, auto loans and student loans. The U.S. has about $1.2 trillion of credit card debt and 27% of student loan borrowers are not making payments today.
“Part of the reason credit card debt is so high is because individuals who cannot afford the prices of today are using credit for everyday expenditures,” Bailey said. “I mean, how many of you go to the grocery store and you’re like, ‘that’s half a basket, how was that $300?’”
One of the increases that goes to aid Charleston residents is growth in the region’s hospitality industry. Occupancy rates in the hospitably industry remain high with a consistently high revenue per available room, and are expected to rise 1.6% over the next year, the chamber’s forecast said.
Witte said the number of “heads on beds” hasn’t changed but the types of stays are moving towards more luxury and upscale guests. With those guests comes increased spending while in town. Increased spending in Charleston contributes to funding of government projects for residents of the area.
Though prices are on the rise, South Carolina ports are expected to return to their trends in 2025, even considering the recent workers strike, Witte said.
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As people migrate to Charleston, the job market moves with them.
From January 2020 to September 2024, Charleston has created more jobs than the entirety of Illinois, the sixth most populated state in the U.S., Witte said.
Over the next year, Charleston is expected to keep a consistent growth rate of 2% in both the labor force and employment rate, while unemployment remains consistent and reaching a pre-COVID-19 pandemic range, according to the chamber’s forecast.
Charleston’s unemployment rate remains around 4%, rising slightly above normal because of the rate people are moving to the area with a temporary job or no job at all, Bailey said. Since 2000, Charleston has seen a 54% population increase, compared to the U.S. having seen a 20% increase
“We still have roughly one available worker for each open position, that’s assuming that the person looking for the job has the skills that an employer is looking for,” Bailey said. “So one person to an available job is still a very tight labor market.”
Both public and private colleges and universities are seeing an average 50% graduation rate in the U.S., Bailey said. Since this shows students are leaving school with debt and no degree, she suggests honing in on additional skills for the workforce.
“While the kids are getting their liberal arts degree, give them the choice of a certification,” Bailey said. “If they have some kind of interest in health care, in computing skills, whatever the case may be, because then they’re guaranteed a livable wage job.”
Locally, the College of Charleston provides undergraduate and graduate certifications for advanced manufacturing, software engineering and operations research to keep up with South Carolina’s 17% growth in manufacturing.
In the Charleston area, Bailey’s research presented 24,077 job openings in the Charleston area as of Sep. 2024. The top three institutions with open positions are healthcare such as the Medical University of South Carolina, Roper St. Francis Healthcare and HCA Healthcare.
Witte said the percentage of people who voluntarily quit their job is a third today of what it was in 2022. Lower rates of quits and layoffs are expected to help with potential wage moderation.
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