Columbia SC home prices rose at almost unsustainable rates in 2013, but many analysts are predicting a slower pace when it comes to rising Columbia SC home prices in 2014. Gus Faucher, Senior Macro Economist with PNC looks ahead at what he sees for the economy as well as housing in the new year…
Obviously, a lot of things have to happen, in the right order, for the economy to continue to pull itself out of the recession and housing to continue to grow, and we'll stay on top of the Columbia SC housing market throughout this year and keep you up to date on things that affect our housing market.
Check out our other articles and tips pertaining to Columbia SC home prices and the Columbia SC real estate market in general by clicking on the Columbia SC Real Estate News link to your right under Columbia SC Real Estate Categories.
Columbia SC home prices, along with home prices across much of the country, are back to their mid-2004 levels. This news comes from the S&P/Case Shiller index as of September 2013.
Columbia SC home prices jumped again in September, marking their biggest annual gain in at least 7-1/2 years. Nationwide, the price index is up 13.3 percent year-over-year, the strongest increase since the boom peaked in 2006.
The S&P/Case Shiller composite index rose 0.7 percent month-over-month in September on a non-seasonally adjusted basis.
As of the third quarter of 2013, average Columbia SC home prices, as well as home prices across the United States, were back to their levels posted in the second quarter of 2004.
At the end of the third quarter of 2013, the national index was up 3.2 percent over the second quarter of 2013, and 11.2 above the third quarter of 2012.
"Housing continues to emerge from the financial crisis: the proportion of homes in foreclosure is declining and consumers' balance sheets are strengthening," according to David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. "The longer run question is whether household formation continues to recover and if home ownership will return to the peak levels seen in 2004."
Columbia SC Home Prices Up – Pending Home Sales Slip
While Columbia SC home prices continue to rise, the closely-watched index that measures pending home sales, or signed contracts but not closings, slipped again in October, falling to its lowest level in one year.
The reasons for the slump are mainly falling inventory and diminishing affordability, fueled by higher Columbia SC home prices and higher interest rates.
Pending home sales nationwide, not just in the Columbia SC market, marked the fifth consecutive monthly decline, according to the National Association of Realtors.
Get more news on Columbia SC home prices, along with other Columbia SC real estate news and information by clicking the Columbia SC Estate News link to your right under Columbia SC Real Estate Categories.
After taking a break in the summer, Columbia SC home prices got back up to strength in September, according to statistics reported by DataQuick in the company's monthly Property Intelligence Report. Other metrics, however, weakened.
Columbia SC Home Prices See Rapid Growth
DataQuick reported that Columbia SC home prices "resumed at a rapid rate of growth in September and spread to all" of its 42 reporting counties on a monthly, quarterly, and yearly basis. With the exception of July and August, DataQuick says growth of Columbia SC home prices has spread consistently, just as it has around the country, in the last 12 to 18 months, with all reporting markets seeing growth "in excess of their long term average."
There has been an increase in Columbia SC home prices and overall sales as homeowners with negative equity are gradually swept toward a position of positive equity, a decrease in foreclosures as homeowners have the equity to sell and avoid default, and an increase in demand for home equity lines of credit as borrowers look to tap into increased equity from home price growth.
Other factors DataQuick says to look out for are: "Continued single-family rental demand driven by decreases in home affordability, sustained risk of Columbia SC home prices seeing corrections and stringent mortgage credit standards, and an increase in purchases by investors" driven by the two preceding factors.
The risk of a "substantial correction" runs especially high as growth rates remain elevated, especially since growth isn't supported by steady economic fundamentals.
In the past, moderate economic fundamentals have supported long term growth of Columbia SC home prices with rates of three to four percent respectively. While generally positive, current economic drivers are weaker than those experienced in most previous expansions, leading to considerable uncertainty about future economic prospects.
We'll keep you informed on any news that might affect Columbia SC home prices right here at this website. For continuous updates regarding Columbia SC home prices, click the Columbia SC Real Estate News link to your right.
Columbia SC home prices were largely unaffected by the 16 day government shutdown.
Aside from asking prices, the housing market remains uncomfortably tied to Washington and its budget mess, such as the shutdown's effect on mortgage processing for home purchases and the potential effect of a default on the housing market and economy.
Other Factors Affect Columbia SC Home Prices
It's difficult to figure out how the shutdown may or may not have hurt Columbia SC home prices when there's a whole host of other factors – including seasonal changes, rising interest rates and a (slowly) improving job market – to contend with.
Nationally, asking home prices are up 1.0% between September and the first half of October, seasonally adjusted. This partial month-over-month increase is roughly in line with the month-over-month increases over the past few months. Before the shutdown started, several factors were already cooling down price gains, including expanding inventory, higher mortgage rates, and declining investor activity. Therefore, comparing how much Columbia SC home prices have risen or fallen in October with previous months can't, by itself, show whether the shutdown has directly affected Columbia SC home prices one way or the other.
But the nationwide housing recovery still depends on what the federal government will do in the coming months about Fed tapering, new budget negotiations, and the reform of Fannie Mae and Freddie Mac.
We'll be keeping a close eye on what Washington does (or doesn't do) in the coming days, weeks and months ahead, and let you know right here how we see it all affecting Columbia SC home prices, and the Columbia SC housing recovery in general.
There is a downside to Columbia SC home prices rising. With improved equity comes higher costs for property taxes and insurance.
Rising Columbia SC Home Prices Could Mean Higher Bills
Rising Columbia SC home prices means you can finally breathe a sigh of relief — especially if you're hoping to sell. But there is a cloud behind that silver lining.
Rising Columbia SC home prices might mean higher bills for you in the coming year because:
- Your property taxes will rise unless your tax rate falls.
- You'll need higher limits on your homeowners insurance coverage to compensate for your higher home value.
Fortunately, you have time do a few things now to reduce your tax bite next year, keep your insurance costs as low as possible, and continue your sigh of relief.
You pay your property taxes based on a formula that generally uses your home's assessed value multiplied by the tax rate. When you home value rises, if the tax rate doesn't fall, your taxes rise. In some locales, tax rates are only adjusted every few years, so your increase might or might not be eminent next year.
However, considering that most local and state government budgets are scraping every penny they can, don't count on the past dictating the future as far as re-assessments go.
If you think your taxes have gone up because Columbia SC home prices have gone up, consider filing an appeal.
Homeowners Insurance Discounts
When your homeowners insurance renewal comes in the mail, call your insurance agent and ask if you can earn a discount for:
- Increasing your deductible.
- Installing a security system.
- Membership in an affinity group like AARP or because of where you work.
- Adding features that protect your home during natural disasters (like hurricane-proofing your roof).
If those cost-cutting measures don't work, focus on the silver lining instead of the cloud. An extra couple hundred a year in property taxes and insurance isn't much in exchange for gaining thousands of dollars in home equity that you can use to finance your child's education, start a business, fund your retirement, or just put in your pocket when you sell.
Get more insurance and tax information by clicking the Columbia SC Insurance link or the link to Taxes to your right under Columbia SC Real Estate Categories.