Rising prices of Columbia SC homes have helped restore home equity to many, but more than a third of potential homebuyers — 38 percent — earning the national median household income of $63,900 cannot afford to buy Columbia SC homes that sold over the last quarter.
Rising Prices of Columbia SC Homes Partly to Blame
The rising prices of Columbia SC homes are partly to blame, along with stagnant incomes, mounting student loan debt and tougher credit standards requiring unattainable down payments.
The national median home price increased from $214,000 in the second quarter to $221,000 in the third quarter. Meanwhile, average mortgage interest rates slid from 4.44 percent to 4.35 percent in the same period, according to home builders.
“Even with nationwide home prices reaching their highest level since the end of 2007, affordability still remains fairly high by historical standards,” according to NAHB Chief Economist David Crowe. “Rising employment and incomes, interest rates that remain near historically low levels, and pent-up demand should contribute to positive momentum heading into next year.”
Overall, 61.8 percent of new and existing Columbia SC homes sold between the beginning of July and the end of September were affordable to families earning the U.S. median income. That's down from the 62.6 percent of homes sold that were affordable to median-income earners in the second quarter.
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Families are losing their Columbia SC homes because of unpaid utility bills. It's happening all over America, not just in the Columbia SC area…
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A majority of Baby Boomers surveyed recently by the non-profit Demand Institute say they plan to stay put in their Columbia SC homes.
Many of the decisions to stay in their Columbia SC homes has to do with the recession. The financial crisis put an end to years of rapid wealth accumulation, causing the typical Boomer household's net worth to fall to $143,000 in 2013 from just over $200,000 in 2007, according to Federal Reserve data.
The Boomer generation is also carrying a lot more mortgage debt. The survey found that the median outstanding mortgage balance for 50- to 69-year-olds was $118,000 in 2013, up from $48,743 in 1992. Financially, the Boomer generation is not necessarily ready for retirement, and half of their assets are tied up in their homes.
37% of the Boomers surveyed said they were planning to make a move, however. Nearly half of the movers said they wanted to get a bigger place — and that they intended to spend more money on it. But with a median net worth of just $40,000, this group was among some of the least wealthy surveyed. In fact, the report found that many of those who were looking to "up-size" were also looking to switch from renting to owning.
Many Baby Boomers Plan to Remodel Their Columbia SC Homes
Boomers seemed generally unconcerned about whether or not it would be "aging-friendly" — even though a whopping three-quarters of them reported having significant health issues, such as cardiovascular conditions, arthritis, obesity and high blood pressure. Only one-in-five of the movers said they intend to live in senior housing.
Instead, many of those surveyed said they plan to use their money to remodel things like kitchens and bathrooms in order to increase the value of their existing Columbia SC homes.
More than 17% of the 76 million Boomers are already retired and about 10,000 will reach the traditional retirement age of 65 every day for the next 15 years. And even though many Boomers plan to stay in their current Columbia SC homes, the Demand Institute estimates that nationwide, this generation will purchase about $1.9 trillion in homes over the next five years.
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With strong demand and limited supply, Columbia SC homes are selling as fast, or faster, as they did during the boom years of 2005 and 2006. Of course, the circumstances are quite different.
Homes are now selling nearly three times as fast as they normally would. The average number of days a listing stayed on the market in April was 46, down from 62 in March and down from the normal pace of 90-120 days, according to the National Association of Realtors.
Back in 2005 and 2006, it was all about easy money, and now it's about stiff competition for limited supply. "We need to see home builders increase production," said Lawrence Yun, chief economist for the NAR, in a press conference. "We need a 50 percent increase in starts."
Construction of New Columbia SC Homes Slowing
Builders of new Columbia SC homes are actually slowing production, trying to take advantage of home price gains that are nearing double digits.
While Columbia SC homes are certainly selling faster, double-digit price gains are not considered healthy, especially when wage growth is nowhere near that. At some point buyers will hit the wall, unable to afford the homes they want.
First-time homebuyers are already dropping out of the market, representing just 29 percent of homebuyers in April, according to the NAR. That's the lowest in two years. Rising mortgage rates, now at their highest in two months, are playing a part, but there are also fewer low-end Columbia SC homes to buy. The number of homes in the foreclosure process is now down nearly 25 percent from a year ago, according to a new report from Lender Processing Services.
Those who can get credit are now competing for what little there is to buy, and pushing prices well beyond expectations. We don't see this temporary boom lasting like it did in 2005 and 2006, simply because the factors driving this run-up are vastly different.
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A ventless fireplace, or as the industry likes to call them, a “vent-free” fireplace, is a liability in Columbia SC homes. We prefer the term “ventless”, or “not vented at all” when describing these cozy little demons.
The ventless fireplace industry wants you to feel you’re being liberated of a burden by not having an exhaust vent. We think it’s important for people to know that they’re actually missing something important when they go with a ventless gas appliance.
Why a Ventless Fireplace is a Liability in Columbia SC Homes
Unvented gas fireplaces are a liability in Columbia SC homes. We advise those who have one either to remove it, replace it, or just not use it. Yes, we know that some people love them and have never had a problem with theirs. We have heard of lots of people with unvented gas fireplaces who complain of headaches and other problems.
More than a few people are feeling ill when they use unvented fireplaces, and they want to confirm their suspicions. These things are in a lot of Columbia SC homes now, and people are buying those homes without knowing of the problems.
It’s unlikely that ventless fireplace units will go away anytime soon, but the more people find out about these problems, the better. As homeowners doing their research find out the truth and turn away from these ventless fireplace systems, Columbia SC homes become safer.
One company, Fireplace Creations in Tennessee, writes on their website, “After doing research, we decided we would never put a vent-free (room vented) appliance into our home. Because of this decision, we didn’t believe it would be right to sell them to our customers. This decision was made even though vent-free products were/are a hot item.” You can read their recommendation on why not to use a ventless fireplace here.
Are Wood Burning Fireplaces Safer Than Ventless Fireplaces?
If your state has adopted the 2009 International Energy Conservation Code (IECC), you cannot install an open wood-burning fireplace in a new home. What does this tell you?
According to the BCAP-OCEAN code status website, 30 states are on the 2009 IECC or better now. Adopting it was one of the requirements for any state that took ARRA (Stimulus Act) money.
A ventless fireplace may have fancy technology built in now (oxygen depletion sensors and catalytic converters), but the bottom line is that the risks can outweigh the benefits. It’s not that hard to build a chase and cut a hole to install a direct vent model, so why take that risk in your home?