A Balanced Housing Market and Strong Automotive Industry in the Greenville HMA
HUD’s Comprehensive Housing Market Analyses provide information on changes in local economies, housing markets, and populations and provide three-year forecasts for demand in the area. This article is part of a series that sheds light on the content of these analyses.
The Greenville Housing Market Area (Greenville HMA), located in upstate South Carolina between the southern cities of Atlanta and Charlotte, includes the counties of Anderson, Greenville, Laurens, and Pickens and is coterminous with the Greenville Metropolitan Statistical Area. The Greenville HMA has an estimated population of 936,100. A recent Comprehensive Housing Market Analysis on the Greenville HMA details the economic and housing market activity in the area.
COVID Impact on the economy
Like elsewhere in the nation and throughout the world, the COVID-19 pandemic had deleterious effects on the Greenville HMA’s economy. At the onset of the pandemic, unemployment in the HMA spiked to its highest point in April 2020 at 12.3 percent. Since then, however, the unemployment rate has declined to 5.3 percent as of January 2021. From October 2019 to October 2020, total nonfarm payrolls declined by 12,600 jobs. Job losses occurred in nearly all employment sectors, but the leisure and hospitality and professional and business services sectors were hit the hardest, as more than 70 percent of job losses in the HMA occurred in these two sectors. Professional and business services is the largest employment sector in the HMA, accounting for 17 percent of area payrolls. During the period, employment in this sector declined by 5.5 percent, or 4,100 jobs. The leisure and hospitality sector accounts for 10 percent of area payrolls; during the period, employment in this sector declined by 10.4 percent. or 4,900 jobs.
Not all sectors experienced employment declines during this period. Modest employment increases occurred in the mining, logging, & construction (1.0 percent) and wholesale & retail trade sectors (0.2 percent), as local governments designated many occupations in these sectors as essential during the shutdown.
A shift to automotive manufacturing
In 2020, manufacturing was the fourth largest employment sector in the Greenville HMA, accounting for 14 percent of nonfarm payrolls. Over the past year, employment in this sector declined by 1.3 percent, or a loss of 1,000 jobs. Historically, textile manufacturing was a central part of the Greenville HMA economy, even earning Greenville the moniker, “The Textile Capital of the World.” However, during the 2000s manufacturing contracted in the HMA like it did in many parts of the country, as companies began to move manufacturing abroad. By 2011, manufacturing was concentrated in the automotive industry. The report primarily attributes this shift to BMW’s investment in the BMW Manufacturing Co., LLC production facility in the neighboring city of Spartanburg, which went online in 1994. The BMW production facility grew quickly from approximately 2,000 employees in the early 2000s to 11,000 employees in 2019. This growth buoyed other companies in the automotive industry in the Greenville HMA, including Michelin North America, Inc., ZF Transmissions Grey Court LLC, and Robert Bosch LLC, which are three of the ten largest employers in the area. The automotive industry continued to grow in the area; in 2003, Clemson University — the second largest employer in the HMA with 5,400 people — opened the International Center for Automotive Research (CUICAR) and offers MS and PhD degrees in automotive engineering.
Over the next 3 years, payrolls are expected to increase by 1.5 percent annually. This growth will be led by companies expanding facilities in the area.
Balanced Housing and Apartment Markets
The homeownership rate is estimated at 67.4 percent, which is higher than the national average of 65.8 percent (Q420). The home sales market is balanced in the Greenville HMA, with an estimated vacancy rate of 1.2 percent. Like elsewhere in the nation, the pandemic contributed to the decreased supply of homes in the HMA, as many were hesitant to put their home on the market or took their home off the market for health and mitigation purposes. The number of homes sold in the HMA increased by 6 percent and the average sales price increased by 8 percent. The apartment housing market is also balanced with an estimated vacancy rate of 4.3 percent. From December 2019 to December 2020, multifamily construction totaled 2,125 units, which is a 91-percent increase from the previous year.
During the next 3 years, demand is estimated for 13,700 new homes and 5,350 additional rental units. Demand is expected to be stronger toward the end of the forecast period as economic conditions improve. For more detailed economic and housing market information, see the recent Comprehensive Housing Market Analysis on the Greenville HMA.