Columbia SC housing prices have already bottomed out and are on the rise. Other than a brief stumble in December, asking prices have been steady or rising for the last 8 months. 
Rents are also on the increase, rising 5.6 percent nationally, year-over-year. Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners.
Relief for strapped renters may be in sight, however. Construction of multi-family buildings increased last year. These new rental units should start coming to market later this year, giving renters more choices and less competition.
Columbia SC Housing Prices Already Bottomed
Nationwide, asking prices of homes for sale is up 0.5 percent for April, marking the 3rd consecutive month of rising asking prices.
According to the Trulia Price Monitor, 44 out of the 100 largest metro areas nationwide had year-over-year price increases, with 92 percent showing quarter-over-quarter increases.
New Columbia SC Housing Also Recovering
New Columbia SC housing starts are more than 30 percent higher than their low in early 2009, and asking prices on those new for-sale homes have risen for three months in a row.
Localized risk of a brief downturn in prices does exist due to the pending foreclosures that could set prices back in the downward direction, but it’s believed that would be a short term setback for prices.
Since we’re in an election year, we’re not likely to see any new bold housing stimulus plans out of Washington. The political atmosphere is too charged for agreement on major housing policy issues now. And, because the market is now recovering, there’s less of a sense of urgency than there was several years ago.
We’d love to know what you think. Are Columbia SC housing prices finally on the upswing, or do you still see prices dropping? As you well know, real estate is very local, and there could be pockets of still diminishing prices, although the overall Columbia SC housing outlook seems brighter. We’d love to hear your comments.
From peak levels five years ago, home prices are down more than 30 percent, combined sales of new and existing homes are nearly 40 percent lower, and new home construction has plunged more than 70 percent.
However, several factors are falling into place that will support gradual progress in the coming year as long as the economy doesn’t tip back into recession.
Most important, analysts increasingly believe that 2011 will mark the bottom in home prices. Most national price indexes adjusted for seasonal influences have stopped falling on a month-to-month basis.
The demand side of the housing outlook is somewhat of a paradox. Attractive home prices and super-low mortgage rates have made homes the most affordable in the postwar period. Yet, demand continues to languish. Sales of existing homes were up in October and have mostly bounced around the current level this year. NAR chief economist Lawrence Yun says that despite historic affordability and more credit-worthy borrowers, the share of contract failures is double that in October 2010. Cancellations last month were reported by 18 percent of NAR members, says Yun, up from 9 percent last year.
Tight loan standards and weak job markets in recent years have sharply reduced people’s willingness and ability to start a household, which continues to weigh heavily on home demand. Since 2006, the rate of household formation has slowed dramatically. The current number of U.S. households is about 4.9 million below what the trend prior to the recession would have predicted.
The Barclays outlook expects prices to end 2011 close to 2 percent below a year ago and then increase modestly by about 1.5 percent in 2012. Those projections are similar to most, but with one key assumption: The U.S. doesn’t relapse into a recession, caused by the failure of policymakers in Europe to prevent a full-blown financial crisis or by actions of U.S. policymakers that would impose excessive budget tightening next year. In a recession scenario, the analysts project an additional 7 percent drop in house prices, accompanied by a 12 percent jobless rate.
Barring that, 2012 is set to be the first year of the housing recovery, but it may not feel like one until mortgage restrictions ease and the labor markets are strong enough to offer more support.