A Columbia SC housing recovery is underway, along with most regions of the U.S.
Columbia SC Housing Recovery Details
As the saying goes, “Better late than never?” U.S. News editor Simon Owens sits down with reporter Meg Handley to discuss the state of the housing market and whether we’re finally seeing a true nationwide housing recovery.
The Columbia SC housing recovery is definitely underway. If you’ve been sitting on the sidelines waiting for the bottom, you may have waited too long.
Talk to us today about whether now is the right time to buy Columbia SC housing based on your particular circumstances. We’ll go over market specifics with you, and discuss how your financial situation would be affected by getting into a home of your own now, before prices go even higher, and inventory gets even thinner.
Everyone’s trying to figure out whether the housing recovery we are seeing now is for real, or if it’s just another one of those blips on the radar like we saw in 2010.
Robert Shiller, co-creator of the Case-Shiller index, discussed the state of the housing market recently on Fox Business News. Here’s what he had to say…
Whether this particular up-tick in the housing recovery is real, or just another blip, remains to be seen… but as Mr. Shiller pointed out in the interview, this time, the housing recovery is developing without any Federal intervention.
Shiller also mentioned a few clouds on the horizon when it comes to a housing recovery. Some of those clouds he referred to are the problems at Fannie Mae and Freddie Mac, which is propping up the housing market and supported by the government.
He also made reference to the key macro issues like the eurozone crisis, the slowdown in Asia, and the oncoming fiscal cliff in the U.S.
What are your thoughts? We’d love to hear your opinion on this topic. Do you think this Columbia SC housing recovery is real, or just another temporary tick before things start falling again?
Buying a Columbia SC house is a smart investment these days, assuming you can get a loan. Granted, everyone has an opinion about the housing market cycle. Have we hit bottom? Are we already past the bottom and on the way up? Opinions about the housing cycle are like butts, everyone has one.
Trying to figure out when the best time might be for buying a Columbia SC house can be tricky, considering how long housing cycles are. You can always buy low and watch prices go lower. But by many measures, home prices are still cheap.
The median single-family home price — half higher, half lower — seem to have hit its bottom in January, dropping to $154,600, the lowest since October 2001, according to the National Association of Realtors. That’s down from a high of $230,900 in July 2006. Existing-home prices rose in June to a median $190,100, up 8% from June 2011. Those are still 2003 levels.
The supply for buying a Columbia SC house is shrinking. This supply shortage is due to people not wanting to sell their homes while prices are down. When excess supply dries up, people start building more new houses, which has the effect of reducing the unemployment rate and increasing the economy in general.
Mortgage Rates for Buying a Columbia SC House
If you’re buying a Columbia SC house now, mortgage rates are still crazy low, compared to historical rates for a home loan. Assuming you financed 80% of a median single-family home, or $152,080, your mortgage payment would be about $691, excluding taxes, insurance, HOA fees, etc. About $5,589 of your first year’s payments would be tax-deductible mortgage interest.
So what could possibly go wrong if you’re buying a Columbia SC house? First, you may not be able get a loan. Bankers are insisting on checking things that seemed far too troublesome during the housing bubble, like whether you have a decent credit rating, a down payment, or a job.
Another Problem When Buying a Columbia SC House
The other problem is that houses are leveraged investments — that is, you borrow money to buy them. Let’s consider the example above, where someone buys a $190,100 house and finances $152,080. Your investment is $38,020. Let’s say that the worst happens: home prices fall, and you have to sell the house for $175,000.
Unfortunately, the bank won’t split the loss with you. You’ll get back $22,920 from the sale, and wave goodbye to $15,100 of your down payment. That’s a 40% loss, even though your house has fallen 8% in value.
There are other risks when buying a Columbia SC house, ranging from termites to water leaks. But if you’re planning to live in your home for a long time, you have the money, and you can get financing, there’s probably never been a better time to buy.
Columbia SC foreclosures can take a long time to sell, and depress other property values in the meantime. Ever wonder why that house on your street is just sitting there and making the neighborhood look run down?
It’s not hard to spot these un-cared for homes with the peeling paint, overgrown lawns, and bushes that look like they haven’t been trimmed in years. Chances are, they haven’t been.
Why Aren’t Columbia SC Foreclosures Selling?
Some Columbia SC foreclosures are taking nine to fifteen months to sell. Rules and regulations can be tough, depending on the state. Fannie Mae deals, for example, adhere to strict guidelines. Once the price is set, it can’t be reduced in the first 30 days, but few buyers are willing to pay full asking price for distressed homes. After a month, the price is lowered incrementally by 5% or 10%. Because Fannie Mae and Freddie Mac focus on the bottom line — and not how a property looks — this leaves little room for negotiation.
Banks are slammed by high foreclosure volume and the additional scrutiny resulting from improper foreclosures of the past. Some have wondered if banks are concerned about flooding the market with foreclosures, and it now seems that banks are more comfortable foreclosing again.
How much time does it take to settle a typical foreclosure? Try 370 days — and then add another 180 days before it’s actually sold. That’s more than a year and a half to get a run-down property into the hands of a responsible homeowner. This doesn’t even take into account the delays that can be added if there is a tenant in the property. To gain perspective on how bad things are, the average foreclosure in 2007 took just 150 days to close.
The good news is we should see home sales speed up in the near future. In the first quarter of 2012, a 25% increase in pre-foreclosure sales signaled the tide is turning for how banks deal with distressed homes. Banks are becoming more open to pre-foreclosures because they minimize losses. With pre-foreclosure sales, a property is sold by short sale or auction before the foreclosure process is complete. In the first quarter, the average price of a pre-foreclosure home was $27,000 higher than a foreclosure sale.
What Can Be Done About Columbia SC Foreclosures On Your Street?
In the meantime, if there is a foreclosure on your street, or a home that looks like it might fit this category, you don’t have to let it necessarily bring down values in your neighborhood. Talk to your neighbors about taking turns mowing the overgrown yards, and maybe even getting together to trim the shrubbery. Granted, no one likes working for free, especially on someone else’s home, or one owned by a bank, but doing so could help your home’s value in the long run.
If you have questions or concerns about Columbia SC foreclosures, and how they might affect your neighborhood, talk to us. We have other tips and advice we can give you to help prevent a foreclosure in your neighborhood from bringing down the value of your home.
Columbia SC senior citizens are among a growing segment of the population over the age of 50 who are falling into serious mortgage debt. According to a report from AARP, more than three million borrowers over the age of 50 are at risk of losing their homes to foreclosure.
Since the housing crisis began, more than 1.5 million homeowners age 50 or older have already lost their homes to foreclosure, pushing the foreclosure rate among this group to 2.9% in 2011 from 0.3% in 2007, according to the AARP’s Public Policy Institute. And another 3.5 million have found themselves underwater, owing more on their mortgage than their homes are worth.
Columbia SC senior citizens have long been believed to be cushioned from the blow of the housing crisis because they owned their homes outright or hold large equity stakes they could draw from in case of financial hardship.
Columbia SC Senior Citizens Carry More Debt Than Ever
Older Americans are carrying more mortgage debt than ever before, and more older Americans have mortgages than they did 20 years ago.
According to the Federal Reserve, the percentage of families with mortgages held by someone age 75 or older, for example, jumped to 24.2% in 2010, up from 6.3% in 1989. Over the same time period, the amount of mortgage debt this group of borrowers owed jumped to a median of $52,000, up from $11,800.
Columbia SC senior citizens who lose their jobs, for example, have a harder time getting hired than younger workers. And those who do find a job often end up taking a pay cut, making it more difficult for them to afford their mortgage payments.
While the economy is slowly recovering and home prices are starting to stabilize, it may be too little too late for many older homeowners — especially the 3.5 million who are currently underwater on their mortgages.
The AARP report points out a very troubling fact: Many Columbia SC senior citizens don’t have enough time left to rebuild their finances before declining health or disability forces them into retirement and starts eating away at their savings.