Columbia SC home prices continue to show signs of improvement, but the road to recovery remains a long one.
Home Prices Up
According to the S&P/Case-Shiller home price index, average home prices increased 1.6 percent in July compared to the previous month, marking the third consecutive month that all 20 major markets studied in the index have improved, with a general uptick continuing. Home prices are now 1.2 percent above July of last year.
The index covers over 80 percent of the housing market, with a 10-city composite index, and a 20-city composite index, all of which showed small signs of improvement in July, its most recent reading. While improving values is one of many potential signs of health, housing has a long way to go before all vital statistics are back to “normal,” particularly with the high default rates compared to before the boom and bust, tight lending not only for consumers but for builders, to name a few factors.
David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said, “The news on home prices in this report confirm recent good news about housing. Single-family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing.”
Inventory levels remain extremely tight, which combined with historically low interest rates have helped to improve home prices, but to call housing recovered is certainly a bad call. Progress is being made, but a one percent improvement over one year, does not a healthy market make.
Of course, the law of supply and demand would dictate that, as home inventory levels go down, Columbia SC home prices go up. Don’t wait until inventory levels drop to the point of boosting home prices beyond what is reasonable for your budget. Contact us today to start looking for the best home at the best price.
Columbia SC home prices continued their upward trend in July, while inventory of available homes for sale continued it’s downward spiral. Demand for homes is growing faster than the inventory, helping push the national median price of existing homes up for the fifth month in a row. This increase comes in spite of the modest increase in sales that fell short of some analysts’ expectations.
Columbia SC Home Prices and Sales
Sales of existing homes — resales of single-family homes, townhomes, condominiums and co-ops — were up 2.3 percent from June to July, to a seasonally adjusted annual rate of 4.47 million. That’s a 10.4 percent increase from a year ago.
Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand.
NAR Chief Economist Lawrence Yun said in a statement recently that “sales could easily be much stronger — in a more normal range of 5 million to 5.5 million per year — if not for abnormal frictions such as tight lending standards and shrinking inventory.”
Analysts generally consider a six-month supply of existing homes to be a healthy balance of supply and demand. More than that indicates that sellers significantly outnumber buyers, which puts downward pressure on prices.
Although first-time buyers accounted for 34 percent of purchases in July, up from 32 percent in June, in a normal market they account for 40 percent of purchases.
While the annual rate of sales in July was slightly below expectations of 4.5 million, those focusing on sales of existing homes, looking for a recovery for housing, are looking at the wrong number. For existing-home sales, the key number is inventory — and the sharp year-over-year decline in inventory is a positive for housing.
To get more specifics about current Columbia SC home prices and available inventory, contact us today. We can give you more up to date information on our current market conditions.