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In our Columbia SC Real Estate News for July 2015:
American Dream: Not What It Used to Be
Owning a home is no longer the American dream it once was. The lingering effects of the Great Recession and housing bust have altered Columbia SC homeownership – a change likely to ripple through the Columbia SC housing market for years to come, according to a recent study conducted by the Joint Center for Housing Studies of Harvard University.
Because of a lack of jobs, slow income growth and other financial factors – including the weight of student and other debt, homeownership continues to lose steam, sales of existing homes are lagging and single-family construction is at near historic lows.
The homeownership rate stands at 64.5 percent, where it stood in 1993. The rate fell for eight consecutive years after peaking in 2004 at nearly 70 percent.
While homeownership has dropped off, those living in apartments continues to increase along with rental rates.
Rents on a national basis have nudged up by 3.2 percent, meaning affordable housing is becoming out of reach for a segment of the population.
The flip side of falling Columbia SC homeownership rates has been exceptionally strong demand for rental housing, with the 2010s on pace to be the strongest decade for renter growth in history. With no signs of a slowdown in renter household growth, rental markets are likely to remain tight in the near term.
Meanwhile, if you are renting and plan to continue doing so, or if you're an up and coming first time renter, the next article is for you…
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5 Tips for Renters This Summer
Roughly 45 million people will choose to rent a home instead of buy this year– many for the first time.
When they move into their new place, they will quickly discover a number of things they didn’t realize they needed – whether it’s something aesthetic like wall art or essential like a recycling bin. Here are five rental reminders before the next big move:
1. Make Sure You Can Afford It
Popular advice insists that renters should not spend more than one third of their annual salary on rent – but that doesn’t necessarily mean that’s how much you actually end up spending. Rent is only one of your monthly expenses; so don’t forget to budget for things like utilities, cable, Internet or even weekly groceries.
2. Know Your Landlord
Surprisingly, not a lot of new renters research their landlord or rental company before signing a lease. People research restaurants before dining, so why not do the same with someone you’ll be paying rent to for a year?
3. Get Renters Insurance
Studies show that 66% of burglaries happen in the home, and renters are just as likely to be victimized as homeowners, yet fewer than 45 percent of them actually purchase insurance. The average price of renters insurance is only $15 a month, and saves you from financial disaster in the event of theft, accidents or property damage.
4. Pay Your Rent On Time Every Month
It’s important to build a good credit score in case you want to buy a Columbia SC home someday. The easiest way to do that is to pay rent on time each and every month, and if you do miss a payment or have to pay late, include a formal letter of apology to your landlord with your rent for his or her records.
5. Think Safety
A neighborhood can seem safe and active during the day, but nighttime can tell a whole different story. Familiarize yourself with your new neighborhood by looking up local crime maps and signing up for sites like EveryBlock, which aggregates crime news from local outlet sources, public police reports and comments from local residents. Do your research and find a safe and fun neighborhood that suits you.
Why is the rental market so hot everywhere? Partly because being able to afford a home is shrinking…
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Columbia SC Home Affordability is Shrinking
Home sales could be off to their best year since the housing and economic downturn, with May marking the fifth straight month that contract signings have climbed, according to the National Association of Realtors.
The Realtor’s Pending Home Sales Index, which is based on contract signings, climbed 0.9 percent to 112.6 in May from a slight downward revision of 111.6 in April and is now 10.4 percent above May 2014 (101.9).
The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006
This year’s stronger sales — coming with similarly tight housing supplies from a year ago — have caused Columbia SC home prices to rise to an unhealthy and unsustainable pace.
Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages. Without meaningful gains in new and existing supply, there’s no question the goal post will move further away for many renters wanting to become Columbia SC homeowners.
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In our Columbia SC Real Estate News for September 2014:
Columbia SC Home Sales Outlook Stronger
Economists are more optimistic about the outlook for Columbia SC home sales over the next two years due to stronger job creation.
The annual pace of existing home sales nationwide will likely rise to 5.25 million units in the first three months of 2015 from 5.09 million in the current quarter, according to the Reuter's poll median forecast.
In May, economists expected much slower gains, with 5.1 million resales expected in the first quarter of next year.
Americans signed more contracts in July to buy previously-owned homes than in any month in almost a year, suggesting the housing market was pulling out of its slump more quickly than expected.
The National Association of Realtors (NAR) said last week that its Pending Home Sales Index, based on contracts signed last month, rose 3.3 percent to 105.9, the highest level since August 2013.
Low mortgage rates and improving labor market dynamics should remain conducive to gradual growth in the Columbia SC home sales sector.
A sharp increase in mortgage rates pushed sales of existing homes lower in the second half of 2013 but borrowing costs have been more stable in recent months and Columbia SC home sales have recovered some of the lost ground.
Investors and economists polled by Reuters generally expect the Federal Reserve will begin to slowly increase its benchmark interest rate around the middle of next year after holding it near zero since 2008.
The median forecast put the 30-year mortgage rate at 5.25 percent in 2016, down from 5.68 percent in the May poll. Last week, the 30-year rate averaged 4.28 percent, according to the Mortgage Bankers Association.
Economists don't believe a slow rise in mortgage rates will hurt Columbia SC home sales, as slow increases in rates are generally considered a symptom of an improving economy. At the same time, slowly rising rates may also help to bring home price appreciation back down to more sustainable levels.
Speaking of mortgage rates and how they may affect Columbia SC home sales…
Columbia SC Mortgage Rates Remain Low
Columbia SC mortgage rates remain much lower than anyone expected they would be by this time when the Fed announced it would start cutting back on its purchases of mortgage bonds.
Mortgage News Daily reports that average 30-year fixed mortgage rates are down to around 4.11 percent. One year ago those same rates were 4.61 percent, down about 50 basis points year-over-year.
Mortgage refinancing tends to pick up anytime mortgage rates drop by 50 bps from recent levels, however most homeowners who were looking to refinance did so when rates were below 4 percent in 2012 and 2013.
We would not be surprised to see rates drift even lower in the coming few days or weeks as they pull lower due to global events, European debt, etc. These are the largest rate indicators right now that are affecting Columbia SC mortgage rates.
Columbia SC mortgage rates were well above 6 percent during the housing market's 2006-2007 peak. Freddie Mac data going back more than four decades shows 30-year rates hit an all-time low of just 3.31 percent in November 2012.
Trying to decide whether to lock in current Columbia SC mortgage rates or let them float a while longer? Seems odd to say floating is an option when we're near the best pricing of the year, but it might be a consideration for aggressive borrowers. If you're close to closing, or have tight debt ratios/cash to close, lock 'em up, and don't look back!
Ideal Time to Buy a Columbia SC Home?
If you've been waiting to buy a Columbia SC home when the time was just right, that time may be now.
Potential homebuyers who have been willing to wait for better deals are starting to be rewarded for their patience, as sellers drop listing prices to meet buyers' more value-focused expectations.
Redfin Chief Economist Nela Richardson says, "Two market developments in July are spurring this change in housing activity as the market transitions from the summer to the fall buying season.”
1 – Columbia SC Home Price Slowdown
Home price growth was mostly flat in July for the first time in five months.
As Senior Financial Reporter Trey Garrison said last week, home price growth has slowed across the board, and Capital Economics says the slowdown will likely meet the company's forecast for inflation to slow to 4% in 2015.
Just about everyone was a little surprised by the consecutive month-on-month declines in house prices during April, May and June on the new monthly Case-Shiller national measure. Echoing that message, the Case-Shiller 20-City measure of house prices fell during the latest two months.
2 – End of Seller's Market?
The second market development is a shift in pricing power from sellers to a more balanced market. That shift has been nearly nine months in the making from when sales began to first decline last November.
Back in October, sellers were starting to lose their dominance in the market, with 72% of surveyed agents describing now as a good time to sell compared to 86% in the second quarter of 2013.
Look for these two trends to drive an unusual surge in home sales this fall. We also look for prices to continue to flatten, and to potentially decline month over month in September or October. If that happens, it will be the first three-month price decline since the fall 2012. Stay plugged in right here and we'll keep you posted on trends as we move through the fall Columbia SC home buying season and into the holidays.
During the winter months, people tend to spend more and more time indoors. It's important to pay attention to the air in your home, and know whether you have a healthy Columbia SC home, or one that could be responsible for making you sick.
There are several things that could be responsible for you not having a healthy home. Mold, lead, a tainted water supply, or hazardous household products can all lead to a less than healthy Columbia SC home.
Steps To Ensure a Safe, Healthy Columbia SC Home
Protect Against Mold
Mold, sometimes known as mildew, grows where there are wet or damp surfaces.
To protect against mold, be sure your gutters are clean and not leaking, and that downspouts direct rainwater away from the house. Your yard should slope away from the building.
Repair leaking roofs, walls, doors and windows right away. Water is insidious, and can cause problems if left to stand. That means anywhere, even in refrigerator drip pans. Mold is one of the most difficult things to get rid of from all the things on the list responsible for you not having a safe and healthy Columbia SC home.
Carbon Monoxide
Unlike mold, you can't see, smell or feel carbon monoxide, a deadly gas that can make you sick or even kill you. Signs of low-level carbon monoxide poisoning include headaches, nausea, vomiting, dizziness, sleepiness, tightness in the chest and difficulty breathing. Many people confuse it with the flu.
Install carbon monoxide alarms near each sleeping area and on each floor. But to make sure they never go off, do not use the kitchen stove or oven to heat your house.
Never use charcoal grills or run car engines inside your house, garage or basement — even for a short time. They produce so much carbon monoxide that even opening the windows and doors will not give you enough fresh air. Never warm a vehicle while it sits inside the garage, even with the garage doors open. Start lawnmowers, leaf-blowers and other yard equipment outside, never inside.
Check for Lead
Lead poisoning poses a serious health risk for children. Lead is not used as much in paint, pipes and other materials as it once was — lead paint was banned in 1978 — so houses built prior to 1950 are the most problematic.
Also check for lead pipes, which are a dull gray in color and scratch easily with a key or penny, or pipes which are joined with lead solder. Water that flows through them can contain lead which can make for a very unhealthy Columbia SC home. This leads us to our next item on the list of things to watch for to ensure a safe, healthy Columbia SC home…
Contaminated Water
Public drinking water is safe, but if you have a well or other private water supply, it's up to you to protect yourself. And since you can't see, smell or taste potentially dangerous microbes, you should have your water tested about every two years for bacteria, nitrates and perhaps pesticides at a laboratory. Nothing can make an otherwise healthy Columbia SC home unhealthy quicker than contaminated water.
Household Products
When it comes to hazardous household products, buy only what you need, and read and follow the directions. Properly dispose of what you don't use, or give the leftovers to someone who can use it. Never burn or dump leftover containers.
Most of these tips for having a healthy Columbia SC home come from the Department of Agriculture's National Institute of Food and Agriculture (nifa.usda.gov). You can find a whole list of other websites that specialize in making sure you have a healthy Columbia SC home by searching "healthy Columbia SC homes" on Google.
Ever wonder why your Columbia SC home isn't selling and others around you are snapped up in a matter of days from the time they go on the market?
While a lot of it has to do with price and local inventory, a whole host of factors can combine to make a home sit and stagnate on the multiple listing service without showings or offers.
Maybe your house is not painted purple, but the longer your Columbia SC home sits on the market, the more it gets stigmatized. People start to ask, "What's wrong with that house?" and "Why hasn't it sold?" Here are some possible reasons:
Your Columbia SC Home is Priced Too High
Pricing your Columbia SC home too high is the main reason a home just sits. Many sellers have unrealistic ideas about what their home can bring, others simply can't afford to take anything less because they are underwater on their loan.
It's always price for condition or price for location. That's one of the main reasons a Columbia SC home will just sit and stagnate.
Your Columbia SC Home Is Dated
Everybody's taste is different, so less is more when it comes to decor at sale time. Loud patterns and bold colors can be big distractions. Other buyer turnoffs include time-capsule interior treatments such as mirrored walls, cheap wood paneling and 1970s kitchens.
Your Columbia SC Home Is In Poor Condition
If a home looks as if it's going to cost half as much to repair or renovate as it does to purchase, it's going to take a long time to move. Buyers are a lot more reluctant to take on a project, especially if there are houses around it that don't need as much work.
The same goes for strong odors in the home, such as pets or mold. Either fix it or chop the asking price to accommodate for someone else fixing the problem.
Your Columbia SC Home Suffers From Bad Design
With some homes, it's a strange or inefficient floor plan that may be killing the sale. Cosmetic things like old linoleum floors or a rough interior can be easily fixed. If you have to walk through one bedroom to get to another one, that may qualify as functional obsolescence.
Your Columbia SC Home May Be in a Bad Location
You've heard it a million times when it comes to real estate: It's all about the location, location, location. There's not much you can do when your location includes overhead high tension power lines, or you're close to a power plant or waste-treatment facility. If your location just comes down to the neighbors not keeping up their property, you may have some recourse if your Columbia SC home is part of a homeowner's association that oversees the neighborhood and takes action if owners allow their properties to become run down.
These are just a few of the many reasons your Columbia SC home may be sitting on the market and not selling. If any of these things are things you can do something about, now is the time to take action to correct what you can.
For more tips on selling your Columbia SC home, see our section on Columbia SC Home Selling Tips to your right under Columbia SC Real Estate Categories.
Columbia SC home bidding wars have become increasingly common since the housing market turned around. Here are a few tips for buyers and sellers on handling multiple offer situations.
Tips for Winning a Columbia SC Home Bidding Battle
Keep it Clean
The cleaner the offer, the better. That means fewer contingencies or no contingencies. Cash buyers almost always have an advantage.
Don't Overpay
Sometimes losing is winning, if that means not overpaying. Do your homework, and know what a property is worth. Never fall in love with a property to the point where you lose a grip on your common sense.
Be Quick
It pays to snag properties before others make offers. Get out there, beat the bushes and find something others aren't seeing. Make sure your real estate agent knows all of your wants and must-have's so they can keep a keener eye out for your perfect Columbia SC home.
For Sellers
Pricing a property correctly can generate a lot of interest and potentially spark a bidding war. Overprice your property, even a little, and that will almost guarantee that this article won't apply to you, because you won't have multiple offers coming in if you're overpriced.
Make It Human
Sometimes what wins sellers over is a personal letter saying who you are. Try to connect with the seller and not just be a number on a piece of paper. Some sellers take the offer with a letter which was less money than the one without a letter.
Be Ethical
Go back to everyone and give a deadline for all bidders to turn in their highest and best offer. But be honest and ethical. Buyers will recognize a shyster and run for the next Columbia SC home for sale.
We encourage our Columbia SC home buyers not to engage in bidding wars. Let us help you do your homework so as not to find yourself in multiple offer situations. Call us today for a no-obligation consultation on the current state of the Columbia SC home market.