Columbia SC home prices rose for the first time in 10 months, according to the S&P/Case Shiller composite index released recently, an encouraging sign the battered housing sector is starting to stabilize.

It was the first time home prices have gained since April 2011. That gain was itself an anomaly in a string of declines stretching back to May 2010.

Columbia SC Home Prices Likely to Remain Weak

Yale economics professor Robert Shiller, the co-creator of the Standard & Poor’s/Case-Shiller home price index, believes the Columbia SC housing market is likely to remain weak and may take a generation or more to rebound.

Shiller, the co-creator of the Standard & Poor’s/Case-Shiller home price index, told Reuters Insider a weak labor market, high gas prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on home prices for the foreseeable future.

David Blitzer, chairman of the index committee at Standard & Poor’s, cautioned that while there were some pieces of good news in the report, some areas saw home prices still continuing their decline.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.2 percent in February on a seasonally adjusted basis, matching economists’ forecasts. Seven of the cities saw home prices drop on a seasonally adjusted basis, while home prices in two cities were unchanged. On an unadjusted basis, 16 of the areas slumped further.

Home prices in the 20 cities fell 3.5 percent year over year, moderating from the previous month’s decline of 3.8 percent.

“Looking forward, we think homes sales will continue to trend upward, which ultimately will result in a slower rate of home value depreciation,” said Stan Humphries, chief economist at Zillow. “But any housing recovery will be dependent on job growth. Continued progress in this area is essential to keeping the housing recovery, such as it is, on track.”

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.