Combining Factors Fueling the Residential Real Estate Madness> Columbia Business Report


For Sale signs are common in most areas of Colombia as demand for homes continues to grow.  (Photo / Christina Lee Knauss)

Christina Lee Knauss

Columbia realtor Graham Moore, owner The moore co., has recently had an experience that would be considered highly unusual in almost any other recent era of property sales besides this one.

He sold an expensive house to a couple who had moved to Colombia from different parts of the country for work, who had never even physically seen the house or walked inside it before.

“We have met before and have personally inspected some of the houses, but on that trip they didn’t find anything that worked,” Moore said. “They couldn’t come back here again due to problems with work and their children, so they had to buy mostly invisible ones using only photos and videos.”

Buying a home without even seeing it in person is not the only unusual phenomenon happening in the real estate market these days.

There are growing stories among realtors of buyers willing to go to great lengths to get into a home, and some are even willing to give up recommended precautions, such as house inspections.

What fuels such actions? There are simply more buyers than they live for.

This is a sellers’ market, like a few others in recent memory, fueled by everything from low interest rates to pandemic-induced shifts in work and home preferences.

The market is thriving in Columbia, Charleston, Rock Hill and Grand Strand, as well as throughout the Carolina and the southeast.

The wild market is also driving an increase in the supply of cash homes, which translates into faster sales. Recently, two companies specializing in cash-only offers – Opened door as well as Tape – expanded into the Colombian market after seeing strong demand for their products in other parts of the Carolina.

“This is a classic supply and demand situation, with consumer demand far outstripping housing supply,” Moore said. “These conditions existed even before the pandemic, and they have only intensified over the past 16 months. With COVID-19, everyone got scared, interest rates plummeted and many people took their homes off the market. Now more and more people want to buy because borrowing is very cheap and there are no houses on the market that could meet the demand.

“This will continue to be so, as long as interest rates remain low, the economy remains relatively healthy, and the housing inventory lags behind.”

According to the latest housing supply survey compiled by Association of Realtors of South CarolinaSouth Carolina home sales rose overall by 21% from June 2020 to May 2021.

The overall median selling price rose 14.2% to $ 257,000 and SC inventory levels fell 54.7%.

According to the association, the number of single-family homes fell by 53.5%, which means that on average, the current market for single-family homes only lasts 1.1 months, and the number of condominiums – for 1.2 months.

While much of the recent hype in the market has been driven by the pandemic, its seeds were sown back during the Great Recession of 2007-2009, according to Morris Lyles, a realtor and broker with ERA Wilder Realty in Columbia and in 2021 as president of the South Carolina Association of Realtors.

“After that crash in 2008, a lot of builders left the construction business, and people in real estate development settled, and now we see a huge amount of pent-up demand that has grown since then,” Lyles said. said.

“Many people have put off buying a home because they lived at home with their parents, graduated from college or for other reasons, and now they are ready to go out into the world and buy houses. Now it seems that everyone is trying to do it at the same time. “

Lyles said low interest rates are another factor in the buying boom, as well as changing people’s priorities about what kind of home they want to live in and what kind of job they want.

Forced to stay at home due to the pandemic, many people have come to realize that their current home no longer suits their needs, and the increased ability to work remotely has forced many people to look for smaller, less stressful areas where the cost of living is lower. Colombia is good for many people, Lyles said.

Those buying homes in the midst of the pandemic often had to rely on home video tours and screenings, a trend that, while declining somewhat as society reopens, is still a more important factor in home sales than it was before. pandemics, Lyles said.

In a frantic rush to acquire a limited number of homes on the market, more buyers are willing to use the video route to determine if a home is right for them, although Lyles said he encourages buyers to make every effort to physically visit the home before buying. …

“We hear about people who sometimes buy an inconspicuous home these days, and I discourage that because you can’t get a good feel for the home without walking through it, and it is very important to get a home inspection as well,” Lyles said.

The hot market not only influences buyers, but also prompts some homeowners who want to get as much money as possible from their home to make a sale decision.

Empty nests, lonely people and those relocating due to teleworking are joining a new group of salespeople, and new companies are emerging offering services aimed at getting salespeople and selling homes as quickly as possible.

On June 15, Opendoor, an online company headquartered in San Francisco that specializes in quick bids for cash homes, expanded into the Midlands, and Columbia became one of six new markets the company entered this month. Founded in 2014, Opendoor offers homeowners what it calls “one click”. People can go to the company’s website, upload a little information and images, and in many cases get an offer for their home from Opendoor within a few days.

Opendour then lists the house for sale.

“Selling to Opendoor gives the seller more confidence in the process,” said John Enberg, Regional General Manager for Opendoor.

“They don’t have to worry about a deal breakdown or a closing date, and we take responsibility for renovating or upgrading the house when we buy it.

“This reduces the risk for the seller.”

Another new cash payment option in the Midlands is Ribbon, a company headquartered in New York and Charlotte. Through what it calls “RibbonCash Offers,” the company is supporting potential mortgage eligible home buyers with cash so they can expedite home offers.

Cash support allows the buyer to get into the house and the seller to get their money faster, and then the buyer has up to six months to close the mortgage. The company also works with real estate agents looking to expedite cash sales.

“This market has seen a huge surge in institutional, corporate buyers, companies quickly bought homes, converting them into rental properties or reselling them, and in this market the average family is losing,” said Shaywal Shah, co-founder and CEO of Ribbon.

“With our approach, we automatically give regular buyers the opportunity to make an offer for a home for all the money and give them the chance to enter this competitive market.”

Whether home buyers and sellers choose one of these technology options or take a more traditional route, trends suggest that the market will remain competitive for a long time to come.

According to Ian Hudder, regional vice president of construction at Columbia’s Silverton Mortgage office, the financial conditions that motivate buyers are unlikely to change over at least next year.

Hadder noted that interest rates are expected to remain low and the Federal Reserve does not forecast any major interest rate fluctuations until 2022.

Currently, interest rates on 30-year fixed-rate mortgages hover around 2.8%.

First-time homebuyers can also get support from a recent FHA announcement regarding student loan debt and how it affects potential buyers. The FHA recalculates how student loan debt will be calculated when calculating the debt-to-income ratio for mortgages.

The new policy allows lenders to use the actual monthly student loan payment in the underwriting process, which is usually lower than the previous requirement to use 1% of the borrower’s total balance.

“This new calculation is an attempt to remove barriers and provide more access to affordable finance for creditworthy individuals with student loan debt, which has a disproportionate impact on people of color and could make a big difference for many people who have been waiting for the right time to try to buy a home. “Hadder said.

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