Columbia SC housing, after 6 years of downward pricing and sales, is finally on a firm path to recovery.
Most economists agree that all the positive year-end trends from 2012 for the housing market will drift into 2013, becoming more entrenched as the economy picks up steam in the second half of the year.
Why Columbia SC Housing Looks Firm
For several years, investors armed with cash have been scooping up distressed and undervalued properties, especially at the market’s entry level. In 2012, that drove double-digit price spikes in many areas.
As Columbia SC housing prices rise and the economy improves, investor influence will wane. Investors buy undervalued homes, which are often vacant and in poor shape. They remodel them, and by renting or selling them, attract occupants. The neighborhood revitalizes, and prices begin to rise. A year or so of consistently rising prices instills buyers and sellers with confidence that the bottom has been reached and it’s time to jump in. As that sentiment catches on and spreads, the market transitions to include more traditional buyers, who pick up where investors left off.
Meanwhile, as the economy recovers and hiring increases, Columbia SC housing demand strengthens. High rental occupancy and rising rents are encouraging renters to move on to homeownership. Also, as home prices rise, owners who were underwater or nearly underwater — without enough equity in their homes to pay off the mortgage — will emerge from the sidelines and start selling and buying homes again.
As demand grows, where will the supply of homes come from? That could turn out to be a problem for buyers — one that leads to higher prices and more bidding wars. Many would-be sellers of existing homes have waited for prices to stabilize or improve — but most of them are also planning to move up or downsize after they sell their home. So it’s a wash in terms of net inventory. And although new-home building has increased, it’s still half the normal historical average.
We’ll keep you up to date on the state of Columbia SC housing as 2013 progresses. Meanwhile, if you have immediate questions you’d like answered about the current state of Columbia SC housing and prices, give us a call, or use our contact link below to touch base with us through our site. Either way, we’ll get back to you right away.
Thinking of moving some extra cash into Columbia SC real estate, or investing in property elsewhere, or just paying down your current mortgage? Here’s what CNN Headline News Money expert Clark Howard advised one of his viewers to do…
Questions or comments? We’d love to hear from you. Just use the comment link to contact us about any Columbia SC real estate related questions.
Freddie Mac’s Vice President and Chief Economist, Frank Nothaft, gives a preview of the 2013 U.S. Economic and Housing market outlook.
Stick with us in 2013 for all the latest Columbia SC housing news.
As always, if you have a comment or question about any of our articles, we welcome you to leave your comments here.
Answering the question, “What’s the real story behind U.S. housing?”, Economics Editor Michael McKee of “The Real Deal” looks at the real U.S. housing on Bloomberg Television’s “In the Loop.”
While some areas are improving more than others, overall, most economic indicators point to a confirmed increase in the Columbia SC housing market.
Columbia SC 
home prices have been rising steadily for the past several months, but some fear the rapid increase could actually start hurting the housing recovery.
The rise in Columbia SC home prices is mainly due to investors, mostly large hedge funds, that have been swooping into various area and inhaling properties as fast as their plentiful cash will let them. They are turning those properties into rentals, and getting anywhere from 8 to 12 percent returns on their investments, thanks to still hot demand. The trouble is, as Columbia SC home prices rise, those returns shrink.
Columbia SC Home Prices Recovery at Different Rates
While Columbia SC home prices are recovering at a somewhat different pace than the rest of the country, they are recovering. Some areas are still in the red, while other areas are seeing double-digit increases in prices.
Even outside the Columbia SC market, this national housing recovery is dependent on investors, who are largely all-cash buyers. The mortgage market is still too restrictive to support the kind of bulk-buying that needs to occur, and many potential buyers either lack the credit scores or the confidence to jump in. Another 14 million borrowers still owe more on their mortgages than their homes are worth, according to Zillow, and are therefore unable to move.
Foreclosures will remain elevated for the foreseeable future because 5 million properties nationwide are either in the foreclosure process, or their owners are behind on their mortgages. Another concern is that Columbia SC home prices are rising faster than incomes, which could push owner-occupants away just as they were starting to get into the market again.
Nationwide, the risk of sales dropping as investors leave different markets is higher where the biggest drop in prices was felt in the first place, like Columbia SC home prices. While we believe the market has turned positive for the most part, there are still some areas of the economy that could affect Columbia SC home prices in the future, and we’ll keep you up to date on those right here on our website. Bookmark our site and check back daily, or add our RSS feed to your RSS reader for continuous updates.