Higher Columbia SC home prices are expected by 33 percent of consumers over the next year. Fannie Mae’s March housing survey indicated 5 percent more people expect Columbia SC home prices to increase this month over the 27 percent surveyed last month who thought prices would increase this year.
Nearly half of consumers expect higher rental prices as well, the highest number registered by Fannie Mae since its monthly tracking began in June 2010. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for the Fannie Mae survey this month.
The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in more than a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.
Consumers’ confidence about their own finances is stabilizing, with 44 percent expecting an improvement over the next year.
Higher Mortgage Rates Expected
There is an increasing share of consumers expecting both higher mortgage rates and Columbia SC home prices over the next 12 months.
Doug Duncan, vice president and chief economist of Fannie Mae says, “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month.”
Duncan says, “Some may feel that renting is becoming more costly and that home ownership is a more compelling housing choice. Conditions are coming together to encourage people to want to buy homes.”
While the “sales of existing homes in January and February marked the strongest start to a year since 2007,” according to the combined Housing and Urban Development (HUD)/Treasury statement. “Data on home prices changed little from the previous month – marking a fifth month of seasonal lows.”
For further Fannie Mae survey findings, visit the Fannie Mae Monthly National Housing site.
The Columbia SC housing market bottom is not going to be a date on the calendar. More likely, the market’s bottom represents a series of events that set up the Columbia SC housing market for recovery.
What Has to Happen to the Columbia SC Housing Market First
According to Stan Humpries, chief economist at real estate website Zillow, “The market bottom is a multi-step affair. First, home sales have to bottom out, which they did in early 2009. Then, long-horizon buyers such as investors, 2nd home buyers, and retirees move into the market.”
Even though the Columbia SC housing market has seen some decent sales activity this buying season, economists still predict home prices to decline a bit more on the whole, mostly because a big chunk of sales in coming months will be distressed properties.
Humphries points out that “A big part of it goes back to figuring out the ‘bottom of the housing market’ and the annoying little fact that no one can really predict when it will occur. For obvious reasons, consumers tend to not want to fork over thousands of dollars for something they know will decline in value, even if it’s only in the near term.”
Humphries goes on to say, “…for those who continue to wait out ‘the bottom of the housing market,’ lower prices aren’t their biggest enemy, the specter of rising interest rates are.
With rates hovering at historic lows, there’s really only one direction they can go and a higher interest rate can cost consumers a lot more over the long term than if they wait for home prices to drop a few thousand dollars more.
Don’t Try to Time the Columbia SC Housing Market
Every time Columbia SC housing cycles and buyers try to wait for the bottom, they invariably miss it while thinking they can figure out where the bottom is, and a combination of rising home prices and higher interest rates add up to cost buyers a lot more than if they had taken advantage of prime buying times, which we seem to be in right now.
Humphries sees 2012 as an inflection point for the housing market, albeit on a super local level.
The Columbia SC housing recovery seems to be seeing a bottom finally getting closer, but getting there remains dicey. Home sales are steady, more sellers are lowering their prices and the inventory of homes for sale is dropping.
Unfortunately, the inventory doesn’t include the so-called “shadow inventory” of both distressed properties and those still held by owners who are underwater, owing more than their home is worth, and at risk for default.
Columbia SC Housing Sales Up
No doubt, sales of existing homes are up, according to the National Association of Realtors’ (NAR) latest Trend Report.
Another thing affecting the Columbia SC housing recovery is inventory. Inventories are expected to increase in the coming months as lenders process and list the huge backlog of distressed properties freed by the recent multi-state attorneys general agreement.
The shadow foreclosure inventory is considerably higher than the total inventory on the market today. Unless properly managed, the disposition of such properties could easily undermine the progress that has been made to date, this also according to NAR.
Radar Logic agrees. “The Columbia SC housing price and sales trends observed in 2011 are consistent with sellers dropping their prices to meet bids from bargain-hunting buyers,” and that’s eating away at inventories, Radar reports.
Would-be Columbia SC home buyers are still experiencing difficulty accessing mortgage financing. While rates remain near record lows, lenders remain risk averse and underwriting standards remain extremely strict.
What is your opinion about the Columbia SC housing recovery? Is a bottom near? Or do we still have a ways to go?