The Columbia SC housing crisis is facing a whole new and different problem in the future, as Baby Boomers retire and are forced to spend more for housing than any generation before them.
By 2030, the number of adults age 65 and older will more than double to 73 million, according to a report by the Harvard Joint Center for Housing Studies and the AARP Foundation.
Many of these retirees will need to put so much of their income toward housing — more than 30% — that they will have to cut back on other expenses like transportation, medical care, even food, the report found.
More Seniors Owe More Money on Columbia SC Housing Than Ever Before
A growing number of seniors are carrying mortgage debt into retirement, with more than 70% of younger Boomers ages 50 to 64, and 40% of those age 65 and older still owing money on their home in 2010. Even worse, they owed even more money on their loans, which is putting many older Americans in a "financially precarious" position, according to the report.
Adding to Boomers' burdens, less money is expected to come in. Over the next decade, the number of households age 65 and older living on less than $15,000 a year — below the poverty level for a two person household in 2014 — is projected to grow by nearly 40%.
The report recommends a variety of fixes for this Columbia SC housing crunch, including property tax relief for seniors, increased federal rental assistance and improved programs to help seniors "age in place" in their homes, instead of in costly institutions.
In 2011, just one-third of low income seniors who were eligible for federal rental assistance received any assistance at all.
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With so many economists and analysts trying to spell gloom and doom for the future of Columbia SC housing, Altos Research is saying otherwise.
Altos is saying that housing recovery critics are wrong about Columbia SC housing. According to Altos, it's going to soar in 2015.
"While we see signs of demand easing, we are significantly more bullish on housing than many of the recent headlines seem to suggest," said Altos CEO Michael Simonsen. "Based on our models, we're forecasting another year of home price appreciation, with a 7% home price increase for the year of 2015."
Some Experts Call for Columbia SC Housing Prices to Depreciate
Single-digit appreciation is a remarkable prediction. Many other experts anticipate depreciation in the Columbia SC housing market, so the Altos call is relatively noteworthy.
What's driving the negative stand most of the market holds? The report blames the media.
So what is the main driver for the Altos view that prices will rise 7%? Altos expects inventory to climb another 10%.
As inventory and transactions rise along with pricing, participants in the Columbia SC housing market stand to benefit broadly. In addition, the number of days on market remains low compared to before the housing bust, indicating a seller's market.
In a seller's market, sellers can list homes at a higher value, hoping a buyer takes the bait. If not, they can also bring down the price closer to market value, while appearing to offer a sales compromise to the buyer.
Altos estimates that approximately 35% of properties will take such a price cut. Altos sees this as an indicator of strong competition, despite weaker demand overall.
The Columbia SC housing market continues to require a more nuanced view of its future.
Home prices across the U.S. are poised for a fifth consecutive year of recovery. The market is still faced with low inventory and demand, buoyed by an expanding economy, which, among other factors, remains healthy. Both supply and demand conditions are moving from extreme bullish conditions to more sustainable healthy conditions.
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The Columbia SC housing report for June from Case-Shiller and FHFA are out and show that both existing home sales and new home sales were down, even though prices were up. Inventory is also on the rise and that should continue to dampen price pressures for people looking to buy a home.
Rick Sharga, EVP at Auction.com talks about the latest housing numbers and what it means going forward…
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Columbia SC housing has been showing signs of slowing down, and new problems facing homeowners looking to relocate, upsize or downsize, may be the reason why.
The problem is that by doing so, many homeowners would be surrendering a dynamite mortgage interest rate, which means even if the home they want to buy is about the same price or just a little more, they could end up paying much more per month.
Rates Inching Up for Columbia SC Housing
Interest rates for those looking at Columbia SC housing have been ticking up slowly since the middle of 2013 with a few stops and declines, but overall rates are higher and slowly rising.
The average rate on a 30-year mortgage fell below 4% toward the end of 2011 and reached a historic low of 3.3% in November 2012.
Rates on a 30-year fixed did not rise above 4% until June 2013, and in the interim homeowners and buyers went on a purchase and refi spree. Today, almost one in three active residential mortgages has a rate below 4%.
With this serving as a disincentive for otherwise qualified, motivated borrowers, it contributes to the spiral or rising affordability gaps (and hence, sluggish sales) since it has a negative impact on the available Columbia SC housing inventory.
Coupled with the decline in new construction and the shrinking pool of distressed properties, it’s a recipe for a really tight market, inventory-wise.
Home sales nationwide picked up momentum entering the summer months, and the latest numbers show that home prices are rising at a faster pace than at the start of 2014.
Constructed to gauge the price movement among normal home sales by excluding distressed properties, the index rose 1% from April to May. On a year-over-year basis, the rate of home-price appreciation across the nation slowed by 1% to 2% when compared to the first quarter.
This combination of rising prices and shrinking inventory is one of the reasons the Columbia SC housing recovery may be coming to a halt.
For more on Columbia SC housing trends and news, visit our Columbia SC Real Estate section of articles under our Columbia SC Real Estate Categories to the right.
Buying Columbia SC houses is not on the list of the 7 dumbest purchases you could make, but these things that we tend to “treat ourselves to” usually leave us wallowing in regret later on.
Buying Columbia SC Houses Not on This List
If you’re considering buying any one of the many Columbia SC houses on the market, psychologists say that’s a smart move. They also say there are some impractical things we should step away from before buying and then wishing we hadn’t. Some of these items are downright absurd, yet we tend to convince ourselves that we deserve them, or they’re important in our lives.
1 – 3D TVs
The majority of 3D television owners regret their purchase. It’s not that the technology isn’t cool. The leading complaint is that there just isn’t enough 3D content to make ownership of one of these futuristic devices worthwhile.
When you’re coughing up between $2,000 and $12,000 for the TV plus another couple hundred bucks a pop for the glasses, that’s sort of a deal breaker. Most people find that it’s a major annoyance to wear the glasses that make the third dimension pop. Sort of like wearing your sun glasses in the house.
2 – Whirlpool Tub
Jacuzzi-style whirlpool tubs can be a real mood killer. Not only are they noisy, they’re time consuming to fill with water and prone to completely drain your hot water tank. Plus they’re expensive to operate, not to mention expensive to buy and install.
Bottom line: Most people don’t use them enough to outweigh the negatives.
3 – A Timeshare
The cost of owning a timeshare extends well beyond the mortgage. Annual maintenance fees, property taxes, and special assessments are piled on top — and they can be quite expensive.
Want to sell it after you realize you made a mistake buying it? Timeshares are difficult to unload. Few people are interested in purchasing a timeshare in the aftermarket, meaning you’re very likely to lose money even if you do find a buyer.
4. A Car They Didn’t Research
A consumer watchdog report found that nearly a third of all motorists regret their most recent car purchase. Among the top triggers of dissatisfaction: The car is faulty, it costs more to run than they anticipated, or they simply didn’t do enough research.
A car is one of the most expensive purchases you’ll make (2nd to buying any Columbia SC houses). So before pulling the trigger on a flashy sport convertible or a clunker with the little engine that could, experts say it’s important to weigh all your options and do your homework.
5. High-End Designer Bags, Clothes, and Shoes
A Gucci handbag can cost more than the down payment on that vehicle you may wish you hadn’t bought. Same goes for many designer scarves, furs, and dresses.
Many expensive clothes and accessories end up spending nearly their entire existence in storage. That’s because the average person wears only about 20% of the clothes in their closet, according to retail specialists.
Among the top reasons our clothes go unworn? The items no longer seem as unique or important as when first purchased, or we realize it was an impulse buy rather than a smart, practical purchase.
6 – A $5,000 Watch
So you got a big promotion at work. Why not reward yourself with a Rolex? You earned it. Plus, what’s more practical than a classic timepiece? “Don’t do it!”
Experts and psychologists agree, an expensive watch is probably among the dumbest purchases a person can make (if not THE dumbest). These days, most people don’t even wear a watch any more because their phone can tell them the time anyway.
7 – A College Education (No, Really….)
Okay, so most people would say a college degree is a smart investment — but it can certainly be regrettable. A third of millennials say they would have been better off working than going to college, according to a Wells Fargo study. The reason? They’re drowning in debt, and because of it, most cannot buy any Columbia SC houses that are for sale even if they wanted to.
More than half the 1,414 college grads surveyed by Wells Fargo said they afforded their education by taking out hefty student loans that have become the crux of their financial distress. Many said they think they’d have been better off with a less expensive, public education than a much more costly degree from a top-tier school.
If given $10,000, more than half of those surveyed said the first thing they would use the money for is to pay off student loans or credit card debt. In 1970, most would say, “put $10,000 down on a home.”
So there you have it. Our list of the 7 dumbest purchases people make. And buying Columbia SC houses does not make the list.