Home loans show steady uptick scattered across all price ranges, areas
Sharp Mountain Business Park off Highway 108 is one example of how commercial growth has increased at a slow, sometimes overlooked, but steady pace the past several years.
Looking at loan information at Community Bank of Pickens County, President John Trammell called construction activity in Pickens County “moderate to good” Friday.
With 50 percent of the market share (based on deposit figures), the loans held at the local bank show a solid, steady uptick in homebuilding scattered across all areas of the county and in different price ranges.
“In the 30 years I have been in Pickens County, I can tell you that the whole county does better when home construction is going well,” Trammell said. “It helps everything from car sales to the barbers.”
At present, Community Bank has 70 active construction loans for work either in Pickens County or within a few miles of the county line in neighboring areas.
Information at the bank also showed that homes are selling much quicker now with builders getting offers on speculative homes before they complete them.
According to the information presented by the bank president Friday, the average finished price of the homes under construction is in the high $200,000s. The home activity is scattered evenly across the area with no single subdivision being at the center of the growth.
Trammell judged the types and location of the houses under construction as a good sign the county is seeing solid growth, not any type of bubble or temporary surge.
He judged the current homebuilding level to be at 50 to 60 percent of what they saw in the 2005-2006 boom period. “But we are a long ways from where we were in 2011 when it was at zero,” he said. “I mean zero. We didn’t have any at that point.”
The loan activity showed both custom homes and some spec. homes (not sold yet) being built. The spec homes, however, are on a much more limited basis than during the boom. Trammell said some builders have five homes underway, including both custom and spec. but no one has the 20 to 50 homes underway at one time like during the boom period.
The loans show that the prices of finished homes have moved toward the center. Trammell said they have no loans for the $700,000 and up range but also don’t have much activity in the low $100,000s.
However, the lack of lower-priced homes may be a result of the hammering that people’s credit ratings took and the fact that customers for lower-priced homes know they will not qualify for loans. Trammell speculated that the $300,000s price range is a result of customers in that range feeling confident in their jobs and income and that they can qualify for loans.
Based on the loans he has reviewed, Trammell estimated that new home growth is split fairly evenly between people moving into this area and people already here buying new homes.
Some of the uptick in new homes is attributable to people being able to sell existing homes.
“Before we had people who wanted to move to a larger home, or others wanting to downsize, but if they couldn’t sell their existing home, they were stuck,” Trammell said.
A key factor in the growth in home construction that may have been overlooked has been a steady but largely unnoticed expansion of commercial operations in this area.
Trammell said their local bank has been involved in $30 million in Small Business Administration loans, with another $20 million in the SBA loans “in the pipeline” this year. Totally they have an SBA portfolio of slightly over $100 million in loans.
Most of the loans have funded small businesses employing five to 15 people and don’t get the attention that large businesses locating here do, but have been coming at a steady rate the past couple of years. Trammell estimated these loans had funded 60 different small businesses, with 35-40 of these in the past year. He noted that the commercial building and business parks have few vacancies at this point.
In summing up, Trammell said he didn’t want to appear overly-confident but felt comfortable calling the growth we are seeing “moderate to good.”