Real estate, construction and architecture fields are improving in Charleston, but a panel at the Business Journal’s Power Breakfast warned against too much optimism, citing the looming “fiscal cliff” and regulatory burdens as impediments to growth.
From left, Power Breakfast panelists Sam Herin, Matt Brewer, Dave Sansom, Steve Slifer and Will Sherrod discuss the future of real estate, construction and architecture in the Lowcountry. (Photo/Kim McManus)
By Lauren Ratcliffe
Published Nov. 1, 2012
Real estate, construction and architecture firms might have put the worst of the recession behind them but that doesn’t mean they are in the clear yet.
A panel of industry experts addressed the market, the future of their fields and how real estate drives the economy during a Charleston Regional Business Journal Power Breakfast Series panel discussion this morning in North Charleston.
“I would say that we are very optimistic on the future,” said Matt Brewer, vice president of business development for Choate Construction. “I wouldn’t be so bold as to say we have turned the page, but we are certainly seeing more opportunity than we did last year.”
That better-but-not-recovered sentiment was echoed throughout the panel as they discussed lending impediments to growth, economic uncertainty with the looming “fiscal cliff” and affordability in the marketplace.
|Attendees networked before the Business Journal’s Power Breakfast event, which addressed the local real estate market and how it drives the economy. (Photo/Kim McManus)|
“If I look at the economics of this, (the future) looks pretty good,” said Steve Slifer, a former Lehman Brothers economist and chief economist with NumberNomics in Charleston. “I would say we should be off to the races, and ordinarily we would, but until Jan. 1, we have this thing coming up called the fiscal cliff. That’s huge folks; you could be talking about a recession.”
Slifer said he doesn’t think the country will slip back into a recession, but said industries including real estate, architecture and construction are right to be timid in waiting to see what government does to address fiscal problems.
Panelists said positives in the local market are the likeability and livability of the region, reduced inventory in both commercial and residential properties, and the benefits of Boeing.
“We have begun to see positive effects from Boeing’s arrival,” Brewer said. “Some (subcontractors) have arrived, some are probing the market for small incubator space.”
Will Sherrod, principal of Lee & Associates — Charleston, said beyond Boeing subcontractors, the company’s effect in the region has trickled down to other sectors.
“On a bigger scale, it has put us on the map for a lot of other groups,” he said. “Whether they are directly related to Boeing or not, other groups are coming.”
The panelists generally agreed that the lending and regulatory climate of banks is hindering growth potential.
“(The banks) got burned very badly in the recession,” Slifer said.
Sam Herin, principal and founding partner with Stubbs Muldrow Herin Architects said he’s hearing of banks willing to lend, but they are doing so selectively.
“The bankers tell me they have money to lend to people who have money,” he said. “That doesn’t do a lot of good.”
Those wishing to develop property and create space to attract residents and businesses are facing difficulty acquiring capital to do so, and the panel said access to funding is affecting every aspect of real estate — both commercial and residential.
“The local developers can’t get the money because they can’t afford the parameters banks are putting on them,” Sherrod said.
Dave Sansom, broker in charge at Carolina One and incoming Charleston Trident Multiple Listing Service president, said he doesn’t know if a fix to the problem is coming, but the difficulty obtaining financing is hurting would-be homebuyers.
“If there is one thing I could wave a magic wand and change in the residential market it would be the lending environment,” he said.
Still, the panel agreed the market is waiting to see how the election may change the financial climate before investments are made. Depending on how the government operates in the coming months, the market will likely either continue to improve or stall out.