Buying Columbia SC real estate in 2013 is likely to be very tricky for home buyers. Here’s why:
The number of homes for sale fell to a 13-year low nationwide in January, leaving would-be buyers chasing a shrinking supply of homes just before the spring selling season.
The Columbia SC real estate market is clearly rebounding, but not because prices are crazy. It’s simply the old rule of “supply and demand” kicking into high gear. Buyers outnumber the available homes for sale in the Columbia SC real estate market.
The same problem is facing buyers on a national level as well. There was an average of 4.8 months of supply of existing homes for sale in the fourth quarter, according to the National Association of Realtors (that is, it would take 4.8 months to sell off the inventory at the current pace). Six months’ supply is closer to normal. In 2010, the supply of existing homes was as high as 10 months.
Prices are starting to rise as a result of the strong demand relative to low supplies in the Columbia SC real estate market, with prices still about 30% below their peak. Reasons for the slim pickings aren’t good news. Lenders are taking their time putting bank-owned properties on the market, in part to keep prices up.
Sellers are waiting until prices rise before listing their homes for sale. Nationwide, about 11.9 million homeowners are still underwater, according to estimates from Moody’s Analytics. When you’re underwater – that is, owning more on your mortgage than the home is worth – you’re much less likely to list your home for sale.
Strategies for Shopping Columbia SC Real Estate in 2013:
Stay Calm in a frenzied market. Don’t get caught up in the hype and think you have to have a certain house because you may not find another one. Be conservative, and be willing to wait.
Make your best offer. If you find yourself in a bidding war, you need to make your offer stand out. Be prepared to make the best offer. The danger is in overpaying, but in a rising market, when you look back 5 years from now, you’re not going to be as concerned that you may have paid $5,000 over asking price to get the house you want now.
Pre-Approval is a must. In the competitive Columbia SC real estate market that we’re in, buyers need to have a pre-approval letter in hand before even starting to look for homes. Be prepared for a stringent underwriting process. Lenders want to see a consistent income stream. And a gift or funds transfer must be well documented. One benefit to a pre-approval is that it sets a price limit on your home shopping. There’s no sense falling in love with a place you can’t afford to buy because you can’t get approved for the loan.
Make a large down payment. When making an offer on any Columbia SC real estate, bringing more than 20% down to the negotiating table will make your offer more competitive. Sellers know the more you bring to the table, the less likely there will be a bank problem.
Find a good agent. An experienced real-estate agent may alert you to homes before they come on the market. Plus, if your agent is respected, that can help you stand out with the seller’s agent.
Buying Columbia SC real estate this year can be a challenge. Stick with these tips when you’re starting out, and you’ll be ahead of the game you’re competing in. For more information on buying Columbia SC real estate, check out our other articles in the Columbia SC Home Buying Tips section under Columbia SC Real Estate Categories to your right.
The challenges and opportunities of buying Columbia SC homes in today’s market are different than they were in the past, including the recent past. According to money.CNN.com, homes are selling 19% faster than they were one year ago. The speed with which homes are selling is due to two factors.
First, prices are low, as are mortgage rates.
Second, there are not enough homes on the market for all potential buyers.
Therefore, if you are considering buying Columbia SC homes in today’s market, you must act quickly. Even when you act quickly, you must be aware that you might not move in, depending on your offer.
Buying Columbia SC Homes is More Difficult Today
It is more difficult today for middle class Americans to buy the first or second home they make an offer on. Investors with cash receive favor at multiple levels of the process over people with traditional loans. Federal Housing Authority(FHA) loans give first time home buyers the opportunity to buy a house with a low down payment.
People who finance through the FHA program also experience difficulty in buying a home if investors with cash also want the property, and people with traditional loans might be favored over them as well. The more cash you have for a down payment, the more likely it is that your bid will win the first time you make an offer. More cash as a down payment is a strategy that has proven successful when buying Columbia SC homes, even more successful than offering to pay a higher price for the homes.
How can middle class Americans achieve the dream of home ownership if they’re competing in a process that favors cash? A 20% down payment traditionally qualified someone for home ownership. In order to be competitive when buying Columbia SC homes, some experts recommend a 35% down payment. It is not impossible for people with a low down payment to purchase a home. They should simply expect the duration of the process to be longer.
The risk involved with buying Columbia SC homes depends entirely on the neighborhoods where you’re looking. After years of declining prices, the market shows signs that it has bottomed. However, when buying Columbia SC homes, you should bear in mind that it is possible for prices to drop again after you buy. Just remember, you’re not looking for the best price, you’re looking for the best home.
Acting quickly and taking advantage of low prices and mortgage rates can be tempting, but requires some soul-searching. If you think you might move again in two years, the costs associated with buying Columbia SC homes will not prove home ownership to be less expensive than renting. Do you want to live in this community in the future? If your answer is “yes” – this is where you want to raise your family, raise a garden, live closer to your aging parents – home ownership is, without a doubt, an investment you should actively seek.
For more tips on buying Columbia SC homes, see our Columbia SC Home Buying Tips section under Columbia SC Real Estate Categories to the right.
Many consumers say they are interested in buying a home but they put off their search just because it’s cold outside, it gets dark early and they think there will be more “opportunity” in the spring. The truth is, there are plenty of opportunities now and reasons why buying Columbia SC real estate is possible and even advantageous in the winter months.
Reasons Why Winter May Be Your Best Time to Buy Columbia SC Real Estate
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he best time to buy Columbia SC real estate could be now because many home buyers tend to wait until the spring and summer to house-hunt, so there will be less competition, giving you more opportunities to make an offer. If the sellers themselves would like to be in a new home by spring as well, you have an even greater chance of your offer being accepted.
- As a result of less home buyer activity in the winter, your real estate agent can give you more one-on-one attention. Instead of trying to satisfy many people at once, agents and brokers can focus more on your needs before the spring influx of interest begins.
- Not only are Columbia SC real estate prices affordable, but mortgage rates are still near all-time record lows, which means the sooner you can obtain a signed purchase agreement, the sooner you can lock in an interest rate that suits your pocketbook. While no one can predict how long rates will last, it’s a win-win situation if you can buy the home you want at a comfortable monthly payment you can afford.
- Because you started your search in the winter and your agent was able to spend additional time finding the perfect home, you can relax when spring rolls around. Many home buyers will just be getting started, while you will be relaxing with moving plans already underway.
So before you get the chills just thinking about looking at Columbia SC real estate now, bundle up and relax knowing you’ve got a head start on all of the other potential home buyers who won’t begin their search for another few months.
The idea of finding a Columbia SC short sale significantly less than market value should be forgotten. Those days are long gone, if they ever really existed in the first place.Lenders are just not going to absorb the loss of one dollar more than they have to.
Lenders are using automated systems to verify home values, along with broker opinions and appraisals, ensuring that offers they accept are in the ballpark of prices as they should be. Despite what lenders may say, they really have very little motivation to complete a short sale.
Points for Columbia SC Short Sale Buyers to Remember
Lenders will be looking at the net amount of an offer. A full price offer with 5% in closing costs is not a full price offer. Look at the net price because lenders surely will.
Most agents price short sales to generate offers. It’s very likely there will be multiple offers and the accepted offer will be at or above list. Going in 20% lower on a Columbia SC short sale is likely a waste of time.
Keep in mind, a Columbia SC short sale almost always transfers “as is”, and repairs are almost never completed.
Keep your offer clean and simple. Cash is king and so is a clean contract. Focus on the net amount and demonstrate your ability to close quickly. The fewer contingencies and stipulations you put in your offer, and the shorter the time frame to close the better.
Most Columbia SC short sales are not “binding” until approved. It’s fairly common for lenders to counter an offer that’s been under review for weeks or months. Right or wrong, this typically happens as a result of their research on market value. An experienced agent can often successfully appeal them.
Expect the process of buying a Columbia SC short sale to drag out for what seems like forever. Lenders would almost as soon go to foreclosure. Don’t even be surprised if the whole deal falls apart.
A Columbia SC short sale includes many variables completely outside of a buyer’s control. Often times, buyers just grow weary of the whole process and cancel their offer because they decide it’s just not worth the aggravation.
If you’re thinking of trying to buy a Columbia SC short sale, understand that it’s pointless to try and low ball a home because the lender will likely just reject the offer. Remember, the seller could care less. Getting a Columbia SC short sale is all up to the lender.
We can’t always predict the future. Okay, we can never predict the future, but one thing we do know is, 2013 is going to be another great year to buy a Columbia SC home.
Reasons You Should Buy a Columbia SC Home in 2013
1 – Mortgage Rates Remain Near All-Time Lows
Just a few short years ago, 30-year fixed rates were above 6.00%. For December 2012, they averaged 3.35%. If you don’t speak mortgage, this means that by buying now, you’ll likely save thousands of dollars in interest, because rates can have a huge impact on your mortgage payment. Don’t wait for low rates to go the way of the dinosaur — when they’re gone, they probably won’t be coming back for a long, long time (if ever).
2 – Home Prices Won’t Be This Low Forever
Columbia SC home prices have been sitting pretty low for a while now, but this isn’t going to last: home prices are officially on the rise. 2013 could be your last chance to grab a cut-rate price before it becomes ancient history.
3 – Save On Next Year’s Taxes
By buying a Columbia SC home, you’ll be able to deduct everything from real estate taxes, to private mortgage insurance, to loan points paid on a purchase. In other words, homeownership and tax savings go together like pumpkin pie and whipped cream. You can find out more about tax benefits of owning a Columbia SC home by browsing the “Taxes” category to your right under Columbia SC Real Estate Categories.
4 – Build Equity
Think of your mortgage like a “forced savings” program. Yes, you’re writing your mortgage company a check each month, but that money, less the interest you’re paying, is still yours in the form of equity. In essence, the difference between renting and owning a home is that homeownership lets you build up your own monetary value, instead of your landlord’s.
5 – Protection Against Inflation
Landlords have a tendency to increase rent every year or two to accommodate for inflation. This won’t happen if you own your Columbia SC home. Having a fixed-rate mortgage means you’ll make the same payment for the life of your loan, so you won’t ever pay more unless you want to.
6 – Help Your Credit
Making mortgage payments on time will boost your credit score and show you’re capable of taking on big financial responsibilities. Your credit score impacts so much more than your mortgage rate: It can affect the interest rate you get on car loans, credits cards, and any other kind of loan you’ll conceivably take out in your lifetime. Good credit is a powerful tool.
7 – Something to be Proud of
You can’t help but feel a real sense of accomplishment when you’re handed the keys to your very own Columbia SC home. Your house is the physical manifestation of your years of hard work and financial responsibility. And nothing says “success” like owning your very own piece of the American dream.
Ready to make 2013 the year you buy your Columbia SC home? Give us a call, or contact us by using the comment link below.