COLUMBIA, SC — Columbia’s home sales rebound continued in November, putting the area on track to match 2009 numbers, when sales were propped up by a federal tax credit for home buyers.
But prices also have dropped back to where they were three years ago, a new report from the S.C. Realtors trade group showed Friday.
“We are on the upswing,” said Doug Bridges, a longtime real estate agent with Coldwell Banker United Realtors in Columbia.
However, it’s still a buyer’s market. “The No. 1 item to get a house sold is still price,” Bridges said.
Sales spiked 16 percent to 584 in November in the Columbia area.
Through the first 11 months of the year, the area saw an 18 percent increase in sales over the same period last year – to 6,990. That’s close to the 7,066 homes sold through November 2009.
Statewide, sales rose 20 percent in November to 4,224 and are up 12 percent through November to 49,004.
In 2009, the federal government was offering an $8,500 tax credit to new home buyers in an effort to revive the market in the midst of the worst recession in a lifetime. This year’s rebound is being sustained by historically low interest rates, under 4 percent all year, and, some experts say, pent-up demand from anxious buyers.
Still, the median price for homes sold through the first 11 months of the year has dropped more than 1 percent from the same period last year to $140,000 in Columbia – also close to 2009 levels. Statewide, the median price rose during the period nearly 2 percent to $150,000.
“The price has to be right or the house won’t compete in the marketplace,” Bridges said.
Sales have been strong in the $100,000 to $200,000 price range – typically first-time buyers, Bridges said. He said that bodes well for the market in coming months as the people selling those homes upgrade to higher price brackets.
“It’s a trickle-up effect,” he said.
But there are challenges as Congress and the White House try to reach a compromise on the fiscal cliff – automatic spending cuts of $1.2 trillion over 10 years that will start in January and threaten jobs from the military to the private sector. Those cuts, paired with expiring tax credits, could hit the middle class hard if a compromise is not reached.
Even if a deal is reached, the military – with its hefty S.C. presence – faces spending cuts as it scales down its presence in Afghanistan.
If former soldiers struggle to find employment, that will ripple through the economy, hurting the housing market, Bridges said. “That would be a negative thing for home buyers and home sellers.”
Another potential wrench is that lawmakers are considering eliminating the mortgage interest tax credit for those making $250,000 or more.
“That interest deduction is a serious thing with people,” Bridges said. “Why make the housing market suffer any more? … That’s not just good business.”
The “perfect storm” for the market would be continued low interest rates, shrinking inventory and enough demand that prices start to rise, Bridges said.
“I see that sort of happening,” he said.
The supply of homes for sale in the Columbia market is down to 10.8 months – the lowest in at least two years – and is inching closer to what is considered a “balanced market” of about six months’ inventory. Pending sales, in which a contract has been signed but the sale has not closed, also rose 17 percent to 599 in November – a sign that sales will continue to rise in coming months as those deals close.
Potential buyers who have been waiting out a down economy are starting to bite, Bridges said.
“A lot of people are going to say, ‘I can’t worry about what’s going on in Washington, D.C. I want to live a little.’”