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2014: Year of the Repeat Columbia SC Homebuyer
As prices continue rising in the new year—albeit at a slower pace—investors will begin to ease back from the market, but repeat homebuyers will be there to pick up the slack, according to Trulia's predictions for the Columbia SC housing market in 2014.
Other changes to the Columbia SC housing market in the new year include lower affordability, "less frenzied" home-buying, and a shift in the rental market from single-family homes to urban apartments.
The biggest obstacle for potential homebuyers is saving enough money for a down payment. This hurdle was the most commonly cited challenge in a Trulia survey of current renters wishing to own their own home. Fifty-five percent of survey respondents cited this obstacle, and among young adults (ages 18 to 34) the rate was even higher at 58 percent.
The second most common barrier to homeownership is lack of stable employment—cited among 36 percent of all survey respondents and 43 percent of young adults.
The pace of Columbia SC home price appreciation will slow in the new year, but rising prices, combined with rising mortgage rates, will take a toll on affordability.
Continued price increases will likely lead more Columbia SC homeowners to list their homes for sale, leading to an increase in inventory in 2014.
At the same time, traditional homebuyers will face less competition from investors, and mortgages "should be easier to get" as the new regulatory environment takes shape removing the uncertainty that has made lenders wary.
During the recession, single-family home rentals increased 32 percent, but some believe that several factors will lead to a decline in this trend in 2014. Fewer foreclosures, fewer investor purchases, and loosening credit standards will all contribute to the decline.
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2014 Mortgage Fee Hike Postponed
Planned fee increases that would have added to the cost of millions of mortgages will be postponed, maybe even cancelled altogether.
Currently, borrowers seeking loans backed by Fannie Mae and Freddie Mac are set to pay higher upfront fees starting April 1. The fees, ordered by the Federal Housing Finance Agency in December, are meant to help safeguard banks against risky borrowers who might default.
Housing experts say they will add thousands of dollars to the cost of all mortgages insured by Fannie and Freddie, with the biggest hits taken by borrowers with less than perfect credit histories.
The mortgage industry has been bracing for substantial increases in the price of loans in 2014. It is already costing a bit more to borrow money to buy a home lately, as fixed mortgage rates have drifted to the highest level in three months.
The incoming chief of the FHFA, Mel Watt, said he intends to postpone the fees — and perhaps even cancel them — until more analysis is done. The FHFA oversees Fannie Mae and Freddie Mac.
Even with the reversal, however, mortgages will probably get more expensive over the next few months anyway as the Federal Reserve cuts back on its purchases of mortgage backed securities, a program designed to keep interest rates low.
Stay tuned and we'll keep you updated at this website on mortgage rates, and the cost of getting a mortgage when buying a Columbia SC home.
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New Year Starts With Disappointing Numbers
With a new year starting that will surely bring higher interest rates and tighter lending standards, the housing market is already showing signs of a slowdown, as pending home sales for November increased only slightly from the previous month.
The Pending Home Sales Index from the National Association of Realtors is based on contract signings for the purchases of existing home sales. The index inched up 0.2 percent to 101.7 in November, from a downwardly revised 101.5 in October. Most economists were expecting an increase of 1 percent.
The index is 1.6 percent below November 2012 when it was 103.3. The data reflects contracts but not closings.
Total existing-home sales this year are expected to reach 5.1 million, a gain of almost 10 percent over 2012, but should stay at that level in 2014, and then rise to 5.3 million in 2015, according to the NAR.
The national median existing-home price for all of this year will be close to $197,300, up nearly 12 percent from 2012. This median price is projected to rise at a more moderate pace of 5 to 5.5 percent in 2014, and grow another 4 percent in 2015.
When looking for a Columbia SC home, it’s important to see beyond paint colors and decor that may not be your taste and, instead, focus on the floor plan, structural design and other physical elements of the house. Replacing carpets or changing light fixtures are typically simple and affordable changes you can make once you move in. But if certain areas of the residence require repairs, like the foundation or the roof, purchasing a property could become costly.
Don’t let the fear of having to pay for repairs deter you from buying a Columbia SC home, though. In some cases, Columbia SC home sellers may be willing to pay for repairs if it will help them close the deal and sell their property. Here’s how to ask:
Reasonable Requests for Columbia SC Home Buyers to Make
There are certain types of fixes that are generally OK to ask Columbia SC home sellers to take care of before you, as a buyer, agree to purchase the home. Getting a home inspection is a must. Once this is complete and specific parts of the home have been identified by an inspector as needing essential upgrades (electrical wiring, for instance), you can approach the sellers to see if they would be willing to pay for the repairs.
Conversely, it is not acceptable for home buyers to make non-essential requests for fixes in a home for sale. This might include asking the seller to paint the house simply because you prefer a different color, or making other aesthetic alterations.
Timely Requests
In addition to making appropriate repair requests, it is also important for home buyers to petition fixes in a timely fashion. Making requests days before closing may halt a home sale altogether, as the sellers may not be willing to alter their agreement at the last second. This means you will want to ask the sellers to upgrade certain parts of their home early on in the negotiating process.
In certain circumstances, Columbia SC home sellers may be willing to pay for home repairs after the sale is complete. To ensure the sellers follow through on their intent to do so, you might want to hire a lawyer to draw up a contract stating the seller’s intention to make the fixes within a predetermined period.
Decide What You Can Live With
There is a chance your Columbia SC home sellers may be unwilling to pay for repairs. You should determine how willing you would be to accept the home as-is, without repairs paid for by the sellers. If the majority of the home is in quality shape (make sure the defects won’t impact your ability to get insurance on the property) and you like most features, you just might want to worry about making fixes after the sale goes through.
The key to approaching Columbia SC home sellers about repairs? Communication. For more home buyer tips, check out our other Columbia SC Homebuyer Tips under Columbia SC Real Estate Categories to your right.