Charleston SC Realty: Home Owners Have Gained Significant Equity
With home values continuing to increase, there is one segment of the Charleston SC realty market that is directly benefiting from this: home owners.
And not just because it is a seller’s market. Home owners are seeing big gains in their home equity. This is beneficial to them in many ways.
First, let’s look at some numbers.
Charleston SC Realty: 2016 Was A Good Year
According to CoreLogic, the average American home owner saw their home equity increase by $13,700. This means the average American home owner saw their net worth increase by $13,700.
Another interesting statistic is the fact that of all outstanding mortgages, about a quarter of them have a term of 20 years or less.
Keep in mind that 30 percent of the homes in this country have no mortgage–they are owned free and clear.
Of the remaining (nearly) third, a quarter of those do not have the traditional 30 year mortgage. Equity build up is a result of two factors: principle pay down and increasing home values.
So, because of these 20 year (or less) mortgages, every time a home owner makes a payment they are accumulating equity at a faster rate.
The two states that saw the greatest appreciation were Washington and Oregon. These states saw home appreciation rates of 10.2% and 10.3% respectively.
These home owners saw their net worth increase over 2016 twice as much as the national average.
South Carolina Compared To National Average
So, what does this mean for home owners?
Many home owners across the country are simply not aware that the market has changed so much so quickly, and may not realize how much equity they have built up.
Here is a breakdown, state-by-state, of homes that have significant equity. Significant equity equates to homes with 20% or greater equity.
The national average is 78.9%, and South Carolina is just below that at 79%.
Having watched the market crash and see their equity go down the drain (and experience negative equity), these home owners might not be fully aware that they are now well in the black.
But even recent home owners may not realize how much equity they have right now. Those that purchased 3 or 4 years ago may not realize just how much home values have increased since the recovery began.
Here is a quick look at home appreciation since the recovery began back in 2013:
Charleston SC Home Owners Have Enough Equity To Make The Next Move
All of this is important because it shows home owners that they can go ahead and sell their home and make their next move.
For many that have been in their home close to 10 years, that was not an option. Because of the crash and negative equity, they had to remain in their home and weather the storm. But now the storm is over and the sun is shining once again.
Certainly this does not apply to all home owners, but basically it means that they now have options.
Perhaps they settled on the current home due to finances or the real estate market at the time. Now, people that bought starter homes can move up since they are starting a family (or have a growing one).
Some people may want to downscale into something smaller. Or, perhaps even use that equity for a vacation home that will one day be the retirement home.
It’s no secret that part of what is driving rapidly rising home values is the strong demand and lack of inventory,
For home owners, whether they are thinking about selling or are happy where they are, the current market is leading to big gains in home equity. Which, in turn, is helping them to increase their net worth.
It is also providing them with options.
It’s a great time to sell your house, but as always, it comes down to a personal decision. Is it a great time to sell for you?
You can visit my Pam Marshall Realtor website for all of your Charleston SC realty needs and learn more about why you should consider me the agent to get your home sold–you can also download some free sellers guides as well.