What affect will rising interest rates have on the Charleston, SC regional housing market?

What affect will rising interest rates have on the Charleston, SC regional housing market?
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According to Freddie Mac’s Office of the Chief Economist  in its latest U.S. Economic and Housing Market Outlook, the interest rate for a 30-year, fixed-rate mortgage is expected to hover around 4% during the second half of 2013 after rising 0.5 percentage points in the past several weeks.

Also in the report, which can be accessed at the end of this post, most housing markets  remain affordable and it would take a much steeper interest rate hike for potential homeowners to feel the economic pinch of rising rates.  Note the use of “most housing markets” in the report.   Even at a 4% interest rate level, high-cost cities such as San Francisco, San Diego, Washington D.C. and Boston have already regained their historical “unaffordable” label.

Exempting the traditionally unaffordable housing markets, Freddie Mac researchers says at today’s home price and income levels, mortgage rates would have to rise closer to 7% before families with median incomes would find themselves unable to afford a median-priced home.  Of course the assumption that home prices will not rise is negated given the incredible and lightening fast increase in home prices through much of Charleston County.  Some neighborhoods’ average selling price for homes YTD 2013, like Byrnes Down in West Ashley, have actually eclipsed the peak experienced in 2007 (but the Byrnes Down average selling price per square foot YTD 2013 is still 10% below that of 2007).

Byrnes Down Avg Sell Price 2007 - YTD 2013

Byrnes Down Avg Sell Price 2007 – YTD 2013

And to make matters more worrisome for the Charleston, SC housing market, Freddie Mac economists predict that we will have the dubious honor of joining the “unaffordable housing market club” when interest rates hit 5%, not the national 7% doomsday figure.

Still, Frank Nothaft, vice president and chief economist with Freddie Mac, calls today’s fears about rising rates unwarranted in many respects.  “The recent upturn in interest rates is sparking fears among some that the nascent economic and housing recoveries will be choked off before they produce sustained growth,” said Nothaft.  “Nothing in the recent trends suggests that we need to fear a major slowdown. A gradual rise in interest rates will not derail the recovery, and are an indication that the overall economic situation is improving.”

Freddie Mac’s What Happens When Interest Rates Rise

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
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Just listed! 112 Belknap Dr Goose Creek, SC 29445 Home For Sale

112 Belknap Dr Goose Creek, SC 29445 Home For Sale
112 Belknap Greenview Park Lagoon 1
You’ll enjoy Lake Greenview Park just down the road from your new home (park picture above). 112 Belknap is perfect for someone looking for an affordable, clean and move-in ready home in Goose Creek, SC. The seller will pay up to 3% of buyer’s prepaid expenses and closing costs with an acceptable offer. This home is close to everything! Make sure to check out the Visual Tour.

Give us a call today at (843) 442-7275 to schedule a showing, or if you need help in getting a mortgage.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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Congress passes measure to avoid the “Fiscal Cliff” while keeping the real estate recovery on track

Congress passes measure to avoid the “Fiscal Cliff” while keeping the real estate recovery on track – good news for the real estate market!

Mortgage interest deduction, mortgage cancellation relief, deduction for mortgage insurance premiums, leasehold improvements, energy efficiency tax credits, “Pease Limitations” relief, capital gains and the estate tax were in most ways all protected in the measure, with some changes that the NAR expects will affect only 1% of the population in the higher income brackets.  This is good news for residential, land and commercial real estate in the Charleston, SC region.

Click here to read the National Association of Realtor’s brief on how the measure will impact the housing market in 2013.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
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South Carolina home sales rise 24% in October

South Carolina home sales rise 24% in October

Jim Bobo Real Estate

Sales of residential homes and condominiums rose 24% in October, South Carolina Realtor’s reported, describing 2012 as a “comeback year.” Prices were fairly stable, the association said, as the median sales price increased 0.1%. The price range for homes with the strongest sales statewide was $200,001 to $300,000, with a 19.5% sales gain in that category. The property type with the strongest sales gains was condos, up 18%.

Charleston-area sales rose 30.7%, to 894 from 684 a year earlier. Greenville had the strongest percentage gain, up 35% to 660 homes sold in October, compared with 489 a year earlier. Columbia posted 663 homes sold, up 29.7% from 511 in October 2011.

The association said 4,608 homes sold last month compared with 3,717 in October 2011. “Most markets have shed listings, resulting from strong sales and sluggish seller activity. There has been a general easing of foreclosures and short sales, meaning distressed listings are dragging prices down less than in recent years. So it’s both about market fundamentals and market composition,” the Realtors association said in releasing the data.

Compared with October 2011, State-wide new listings in South Carolina increased 10.1% to 7,888, while pending sales were up 26.7% to 4,676. Inventory levels shrank 13.4% to 46,776 units. Days on market was down 10.8% to 131 days. Absorption rates improved as months’ supply of inventory was down 24.7% to 10.2 months. These variables have continued to improve for over a year now, and they all contribute to a more stable housing market. This along with continued job growth is pushing prices up.

According to the association, the economy is growing with 2013 expected to outpace 2012′s growth, mortgage rates are expected to remain near historic lows through 2015, and rents are expected to rise due to low vacancy rates.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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New Listing! 1023 Bridlewood Farms Parkway Ridgeville, SC 29472 Home For Sale

1023 Bridlewood Farms Parkway Ridgeville, SC 29472 Home For Sale

Seller is paying up to $3,000 in buyer’s closing costs and prepaid expenses


We are pleased to announce this new listing in Bridlewood Farms in Ridgeville, SC. Close to Summerville and I-26 in Dorchester 2 School District.  Priced to move fast – this is not a foreclosure or short sale.

4 Bedrooms   2.5 baths   2,357 SF   Built 2011

Listed at $174,900    Status: Active    Click here for more information!
Contact us today to schedule a showing.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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Charleston Housing Market Experiences Sustained Rebound

It’s looking more and more official with over a year of sustained improvements in the local Charleston, SC housing market.  Declining inventory, increased sales volume, reduced days on market and increased average sales prices are all strong indicators of improvements.  However, while many neighborhoods are seeing a stabilization or increase in values, there are many neighborhoods still experiencing a decline in values.

If you’ve been waiting on the market to improve, now might be the best time the Charleston market has seen in years. Posted by Jim Bobo Real Estate

You should realize this is only a snapshot of the “general trends” in the Charleston region, and should not be used to determine your home’s value.  Make sure to visit our Charleston Area Real Estate Trends Report page to learn more about the importance of a customized CART Report.

With that clarified, here’s a synopsis from our MLS Board released Friday August 10, 2012:

The Charleston area home sales and median prices have made steady and sustainable increases for the past nine months—since November 2011. Preliminary data released today by the Charleston Trident Association of REALTORS® (CTAR) states that 972 homes sold at a median price of $205,000 in July; compared to July 2011, when preliminary figures showed 829 homes sold at a median price of $180,000.

Year-to-Date
Year-to-date, sales volume is 10% higher and median price has increased 2.5% compared to this time last year. 5,940 homes have sold at a median price of $182,305 thus far in 2012. Through July 2011, 5,395 homes had sold at a median price of $177,837.

Inventory and Days on Market
Inventory has declined 26% from a year ago, with 6,328 homes currently listed as actively for sale in the MLS. Days on market dropped below 100 days for the first time since December 2008, to an average of 97 days in July.

National Economist to Speak at CTAR’s Residential Market Update

CTAR will host the Midyear Residential Market Update with nationally recognized economist Dr. Lawrence Yun on Wednesday, August 15 from 9:30-11:00 AM at the Charleston Marriott.

Please call, text or use the form below to let us know how we can assist you. We never share your personal information with anyone. Our Privacy Policy can be read here.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
PO Box 1182
Johns Island, SC 29457-1182
Call or text (843) 442-7275
Fax (888) 456-6618

Did you see this national headline? “Home values rise for first time in 5 years”…read more

Home values rise for first time in 5 years”.  The article is based on a report from Zillow.  Read the entire article here.

Beware home statistic sources

In under 1 minute, I’d like to share several thoughts on any statistic buyers or sellers might stumble upon.

First, any national housing statistic, regardless of its source or accuracy, will not have relevance in every neighborhood across the country.  For instance, some Greater Charleston Area neighborhoods and areas have seen an increase in average home prices since at least mid-2011, while others still see values decreasing.

Second, and to further complicate things, Zillow does not use sales of bank-owned foreclosures (REOs) in their data.  Since REOs account for a substantial* per cent of home sales, many appraisers will tell you their professional standards demand the inclusion of REOs.  Sellers generally cannot escape the effect foreclosures and short sales have on most home values, and one could rationally conclude that most home value statistics tabulated today which exclude REO sales data are skewed.

Third, the effort to stabilize real estate prices has been a concerted one involving multiple private and government institutions, especially the NAR and lenders who stand to lose trillions if values continue to erode.  So you would think any “good” news should be taken as good news.  But without jobs creation and an expanding economy, all the effort in the world isn’t going to matter.  Just remember that “one good statistic does not a good market make”.  A “good” market is going to depend on many factors unique to your local market.

So be wary of real estate statistics sources.  Before using them in any buying or listing decision, analyze both national and local market statistics, finding out what data went into those statistics and keeping in mind that local statistics probably have more relevance than national ones.  In short, do your homework!

* It is important to note that REOs and short sales in the Greater Charleston Market are currently in decline.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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SC Mortgage Help – Great service for those in need

Many of us know others who are struggling to pay their mortgage.  The State Housing Finance and Development Authority is now providing a homeownership and employment lending service to assist those who qualify.  The Authority is self-sustaining and receives no state appropriation, and has been assisting our workforce population purchase homes in South Carolina for over 40 years.  Refer anyone you know who may benefit to the Authority’s SC Mortgage Help website here: http://www.scmortgagehelp.com/.  Workforce citizens, including but not limited to teachers, firefighters, police officers and military employees, may be eligible for home buyer assistance from the Authority as well.  Here is their website: http://www.sha.state.sc.us/.

SC Mortgage Help homepage snapshot

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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Housing Crisis to End in 2012 as Banks Loosen Credit Standards?

Housing Crisis to End in 2012 as Banks Loosen Credit Standards – so Capital Economics claims.  It would be good for Charleston, SC Homes For Sale, too…

Reprinted from www.dsnews.com

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

House sitting on cash

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Jim Bobo, Jr., Realtor, BIC, ABR, RSPS, MBA

SC Land and Homes LLC
Call or text (843) 442-7275
www.JimBoboRealEstate.com
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