York County is no longer immune to the national housing slump.
The number of permits issued for single-family homes in York County in 2007 -- a barometer of the local homebuilding industry -- dropped nearly 24 percent from 2006, according to a report released this week by the Catawba Regional Council of Governments.
It's the first time this decade single-family housing permits have declined. The 2,863 permits issued is the lowest number since 2003.
"I think this is almost a case of 'it's about time,'" said Mike Vead, a regional planner for the council who compiled the data from cities and towns across the area. "We've been hearing for a long time about the credit crisis and the economy slowdown. We're finally catching up with the national trends."
Never miss a local story.
For months, York County housing experts have said the area's proximity to Charlotte -- one of only a handful of markets nationwide not seeing a significant housing slump -- has kept it safe from the decline. But the latest data shows at least a chink in the armor has formed.
The number of permits issued for mobile homes and multifamily units also declined in 2007. In Lancaster County, the number of permits for new homes dropped for the first time since at least 2000.
Chester County bucked the trend, reporting a 16 percent increase in single-family home permits.
Tract builders hit hard
Local builders say cutbacks from developers who build large neighborhoods in a short amount of time, called tract builders, are the main reason for the decline.
"The trend we've seen is tract builders are slowing way down," said Patrick Williamson, a project manager for Rock Hill-based Southern Builders.
As lenders have become more hesitant to approve loans for borrowers with suspect credit in the wake of the subprime meltdown, tract builders relying on quick construction times and quick sales have retreated.
"Builders continue to scale back production of single-family homes in an effort to contain inventories amid ongoing problems in the mortgage finance arena and other challenges that are keeping many potential buyers on the fence," National Association of Home Builders president Sandy Dunn said Tuesday.
The NAHB reported Tuesday that single-family home permits in February had declined by more than 6 percent nationwide.
David Seiders, an NAHB economist, said the Federal Reserve's recent moves to cut interest rates have been positive for the market. He praised the Bush administration's economic stimulus package, but said a homebuyer tax credit -- among other housing market-directed actions -- is needed to launch a housing recovery.
"Our latest surveys of single-family builders reveal that many prospective buyers are looking into a home purchase at this time, but that they are unwilling or unable to make their move with conditions in the overall economy and financing arena what they are," he said.
Custom builders remain strong
Williamson said Southern Builders and other custom homebuilders in the area haven't slowed down. He said because custom builders often are involved in higher-end projects, they've been able to evade the effects of the subprime lending market.
"We haven't slowed down," he said. "We had a good year."
But he has witnessed the fallout. Williamson said many laborers normally employed by larger builders are looking for work.
"That's probably been the biggest effect around here, the labor," he said.
Fort Mill continues to boom
Vead, the regional planner, said the outlook is not all doom and gloom. York County still far outperforms surrounding South Carolina counties, and evidence in the northern part of the county suggests housing growth from Charlotte will continue.
"I'll tell you one place it hasn't slowed down: the Fort Mill Township," Vead said. "It's still very strong in that area."
Vead predicted York County will continue to grow in the future. He sd after the economy stabilizes and consumers regain confidence in the housing market, York County will regain its upward trend in new homes being built.
"Even though it's down from the previous years, it's not at a standstill," Vead said. "The economy is slowing down, and the growth is just not as robust as it has been."