As reflected in the near-record national rise in home
prices, Charleston, SC homeowners as a whole had much to cheer about in 2013.
According to the S&P Case-Shiller Index, home prices increased 13.6% from
October 2012—and in fact, they’ve been improving at a faster annual rate in
each month for almost two years!
Every expert I researched agreed that this rate of
increase won’t (and, for the health of the market, shouldn’t) continue at that gravity-defying pace in 2014. Most of
them do predict higher interest rates with a slower (but steady) rise in home
prices. Adding to the overall optimism is last week’s RealtyTrac report that
showed foreclosure filings last year weighing in with the lowest annual number
in 7 years. That’s that: the recovery has happened!
Some potential Charleston area homebuyers have been
reluctant to enter the market at all due to memories of the last decade’s real
estate bust. Their fears may be dissipated if Dow Jones Index Chief David
Blitzer’s analysis is heeded. The economist has shown that the previous market
price top was accompanied by a 60% loan-to-value ratio: a speculative bubble in
home prices. Today, loan-to-value has shrunk to less than 50%: not even close
to “bubble” territory.
Charleston home prices might get a boost from another
quarter, too, as prospective buyers realize how expensive their hesitation has
become. According to website Trulia, the cost of home ownership was 35% cheaper
than renting—at least in major cities. And even despite rising prices and
interest rates, homeownership should continue to be more affordable than
renting throughout 2014.
While lending criteria are expected to loosen in 2014,
it’s likely that many first-time home buyers will continue to find it difficult
enter the market. So existing homeowners should be even more important
participants in 2014. Having enjoyed large gains in 2013 (and having already
surmounted the down payment hurdle), this group is expected to dominate among
homebuyers.
If you are watching Charleston area home prices with a
view to buying or selling, I hope you will contact me to go over the numbers
that are relevant to you.
Interested in selling your
Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston
area home? Visit: www.discovercharlestonareahomes.com
-Jeff Cook
Jeff Cook Real Estate
Charleston, SC
No comments:
Post a Comment