Home sales are rebounding in Columbia and South Carolina – opening 2012 with the best results since before the start of the Great Recession five years ago.
And sales are improving without government intervention for the first time since the recession started.
Sales jumped 15 percent to 3,586 in the first half of 2012 in Columbia, compared to the same period the previous year. Sales rose in most areas of South Carolina for the period, increasing 7.3 percent overall to 25,249, according to a report Tuesday from the S.C. Realtors trade group.
“It certainly looks like the real estate industry has rebounded in South Carolina,” said Nick Kremydas, chief executive of the trade group. “We’re hopeful that the trend continues in the fall.”
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Still, there are warning signs – continued unease over the European economy and concerns of another potential financial crisis, expressed Tuesday by Federal Reserve chairman Ben Bernanke – that point to a slowing economy and could interrupt a rebound, Kremydas said. “We’re being a little cautious.”
The median price of homes that sold during the period remained steady in Columbia at $140,000 but ticked up 2.4 percent to $149,000 statewide.
Home sales declined during the first half of almost every year since 2007 in South Carolina and 2008 in Columbia as the state and nation struggled with the worst recession in a lifetime. The only exception was 2010, when sales jumped 11 percent in Columbia and 1.4 percent statewide as the federal government gave first-time home buyers an $8,500 tax credit to buy a home.
This year’s increase is the first without direct government intervention. However, the growth was driven in part by ultra-low interest rates. Interest rates have been reaching a series of new lows this year, falling to 3.56 percent last week for a 30-year fixed-rate mortgage. That’s down from an average of 6.76 percent in July 2006.
“Business definitely has increased,” said Jane Hall, a loan officer with Midland Mortgage Corp. in Columbia. “All of this year has been better than last year.”
A veteran lender, Hall said financing activity is up at her company about 50 percent over last year, and is evenly split between new sales and refinancings.
“Clients feel prices are fair and, in many instances, they are getting good prices. I think that’s what encouraging some people to purchase. They’ve shopped around and they feel like they are getting a good price.”
The increase in sales also is starting to drawn down inventory in the Columbia area, which had a 12.5-month supply of homes for sale in June. That’s down from more than 16 months a year ago. A balanced market has about a six-month supply of homes on the market, experts say.
Pending sales – homes with signed sales contracts that have not yet closed – spiked 22 percent to 4,186 in June in the Columbia area, promising a good start to the second half of the year.
The state has had a large number of high-profile economic development announcements in the past year, which will lead to thousands of jobs in the coming years.
“It could shape up for a pretty good rest of decade,” Kremydas said. “Our long-term future is as bright as it could be and brighter than most states in the country.”