Charleston SC Homes: Good News From The Real Estate Market
2014 was another good year for Charleston SC homes, as well as the national real estate market. A recent msn.com article “10 Signs The Housing Market Will Keep Booming in 2015” shows positive signs that say 2015 will be another good year for real estate. Here is the 10 signs:
1) Housing Starts Hit Their Highest Level In 7 Years.
New home construction was up 4.4% in December, which pushed the 2014 total for housing starts to over a million. That’s the most since 2007, and is up 9% from 2013.
The number of new Charleston SC homes reflects this national trend. Here is a look at new construction homes the last few years:
This graph shows the January to January total number of new homes for the last 3 years. For 2014, Charleston was up 7.4% in new Charleston SC homes. The numbers might actually be higher–builders do not always put every new listing on the MLS.
2) Increase In Permits
Permits for new single family homes increased in December by 4.5%, the fastest rise since January 2008.
3) Consumer Confidence is High
Thanks to the recovering job market and low gas prices, consumer confidence is at an 11 year high.
Consumer confidence is always important to the housing market, and when it runs high, more people are buying houses
4) Home Prices Continue To Remain Up
The latest Case-Shiller report shows that nationwide, home values are up 4.3%.
While that number is down from the double digit growth we saw at the beginning of 2014, it is a good sign.
From the article:
“Critics will note that’s down sharply from double-digit gains a few years ago, but it’s important to remember that the housing market crashed because of unsustainable pricing.
A leveling off in growth is a good thing in the long run. And as long as prices are trending modestly upward, buyers aren’t going to be scared out of purchases.“
5) Home Builders Are Confident (1)
The National Association of Home Builders recently measured the level of builder confidence. Although that number dipped slightly, it is still at a 57.
Anything over 50 is considered positive. Plus, that number is higher than it was at the beginning of 2014, which shows good year-over-year momentum.
6) Home Builders Are Confident (2)
“If you want a tangible measure of confidence, consider a recent Wall Street Journal report from a Las Vegas builder trade show that noted an “air of optimism” at one of the largest trade shows in years for the business.
In fact, the WSJ quotes the chief economist of the National Association of Realtors, who is projecting a 41% jump in new-home sales this year over last.
That growth rate is a bit too dramatic to trust in my book, but the giddy optimism that would spark such a prediction is at least a good measure of how confident builders are feeling.“
7) Hurdles Drop For First Time Home Buyers
In reaction to the real estate crash and mortgage meltdown, lenders tightened lending guidelines making it harder for people to obtain a mortgage.
Now, they are starting to shift to more lenient guidelines.
8) Builders To Cater To Low Income Buyers
2 major builders are targeting lower priced homes to attract lower income buyers and first time buyers.
DR Horton will be building homes in the $120,000-$150,000 price range, which is half of the median home price in the U.S. Lennar also announced plans to build homes in the $150,000-$200,000 price range.
The builders aren’t alone in targeting the lower income demographic. The Federal Housing Administration has plans to boost lending to lower income individuals. This will open up the market to a demographic that otherwise would miss out.
9) Foreclosures Are At Their Pre-Crisis Levels
According to RealtyTrac, foreclosures are at their lowest level since 2006.
According to the latest statistics from The National Association of Realtors, the percentage of total home sales that were distressed sales is significantly down, and currently they only make up 11% of the market:
10) Interest Rates Remain Low
Projections for interest rates in 2015 have them going up.
However, 30 year mortgage rates right now can be as low as 3.8%. A year ago that number was 4.5%.
Some projections have interest rates rising by more than a point by year’s end, however, even if that happens it does not mean homes will no longer be affordable.
Interest rates remain near their historic lows, and much lower than any decade in recent memory. Here is a comparison of the average interest rate for each of the last few decades:
Overall, there are many positive signs for the national housing market as well as here locally.
What is happening in Charleston is similar to what is happening nationally.
Home values saw double digit increases in 2013 and into the early part of 2014.
However, we have now seen that the rate of appreciation has slowed into the single digits. Homes are still appreciating, but they are now doing so at a more sustainable, healthy rate:
Another factor that is impacting both the national and local real estate markets: lack of inventory.
Charleston is down to a 4.5 Month Supply of Inventory, well below the 6-7 Month Supply of a normal, neutral market. Simply put, there is a greater demand for houses, and not enough of them for sale:
In years past, the typical home owner lived in their home for 6 or 7 years. That number has increased to 10 years in 2014.
Part of this can be attributed to the market crash a few years back–many people faced the option of having to short sell their home if they wanted to sell it. Many homeowners were upside down.
However, that number is rapidly declining, and today only a small percentage of home owners are still “under water”:
For would be sellers, there are many good signs concerning the real estate market. Any fears or trepidation you may have had regarding the real estate market should be eliminated with these positive signs.
If you are looking to buy or sell Charleston SC homes, then bee sure to visit my Pam Marshall Realtor website.