When is the best time to buy or sell a Columbia SC house? That’s an age-old question that many buyers and sellers have been seeking an answer to for years. 
As more and more people are thinking about wading back into the real estate market, both buyers and sellers, are again asking the question, when is the best time?
Best Time to Buy a Columbia SC House
The best month to make an offer on a home is January. Fewer buyers are willing to house-hunt during cold, nasty weather, so there’s less competition and few, if any, bidding wars. Sellers also tend to be more motivated than they will be in the spring, when there are more buyers. Why? They may have just received their credit card bills that reflect Christmas spending and may be feeling financially strapped. And their decision to try to sell their houses in the winter means they’re willing to risk listing during a time of the year when properties tend not show particularly well.
Best Time to Sell a Columbia SC House
The best time to be selling a Columbia SC house is in the Spring. Buyers come out of the woodwork during the spring, and with tax refund checks in the bank or in the mail, spring buyers more often pay full price. In fact, sales peak in the spring, helping to explain why about 60% of those who move do so in the summer.
Best Time to Buy Instead of Rent
The best time to stop renting and buy a house is when it costs less to buy than to rent. But how do you figure that out?
Find two similar houses – one for sale and one for rent – and divide the asking price by the annual rent. The difference is called the rent ratio. During the 1970s, 1980s and 1990s, the nationwide rent ratio stayed between 10 and 14, then rose to nearly 19 in 2006, when the housing market topped out. A rent ratio of 20 or more usually means that it costs considerably more to own than rent after you factor in the mortgage, taxes, insurance, repairs and other expenses. It makes financial sense to buy when the rent ratio is a lot closer to 10 than to 20.
If you need help trying to figure out the best time to be buying or selling a Columbia SC house, give us a call. We’ll be happy to sit down with you for a no-obligation consultation, based on your particular needs. As with buying shoes, buying a Columbia SC house is not a “one size fits all” thing. Everyone’s circumstances are different, and so might the timing for you be different. We’ll be happy to help you decide the best time of the year for you, whether you’re buying or selling.
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.