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Columbia: Real Estate and Market Trends

Published on Monday - January 12, 2015

In the wake of the recession, sales in the Columbia housing market bottomed out by 2011. Since then, things have slowly improved. Today, sales are up nearly 31 percent from four years ago. Accordingly, buyers have targeted deals on discounted homes at historically low interest rates. However, as the rebound marches on, the market has become more balanced between buyers and sellers. The current environment in the Columbia housing market is ripe for improvements. Things are looking up for this particular city.

According to RealtyTrac, “the average house flipper in South Carolina made less than $2,000 per house in the last quarter.” Daren Blomquist, RealtyTrac’s vice president, said that “based on 167 flips in South Carolina during the second quarter, flippers paid an average of $163,186 for the homes and sold them for an average of $165,091.”

The Columbia housing market, like most markets in the country, was the beneficiary of historically high appreciation rates. In fact, appreciation rates in the last three years are responsible for extending the trend of price growth since the downturn. The current median home price in the Columbia housing market is $152,800. Even with recent gains, homes in Columbia are considerably below that of the national average ($216,567). Markets like Denver and Houston have easily outpaced the likes of Columbia. Fortunately, over the past three years Columbia and the national average have seen home prices rise, 9.4 percent and 28 percent respectively. That said, it is easy to see why Columbia home prices have not kept pace with the rest of the country.

Downtown Columbia

Three years of historically high appreciation rates have boosted equity in the region since the market took a turn for the worst. That said, Columbia real estate investing should continue to see a lot of attention. The following highlights how much equity has been gained relative to the year of purchase:

  • Homes purchased in the Columbia housing market one year ago have appreciated by an average of $6,907, whereas the national average was $12,783 over the same period.
  • Homes purchased in the Columbia housing market three years ago have appreciated by an average of $19,764, whereas the national average was $55,406 over the same period.
  • Homes purchased in the Columbia housing market five years ago have appreciated by an average of $19,325, whereas the national average was $49,675 over the same period.
  • Homes purchased in the Columbia housing market seven years ago have appreciated by an average of $16,479, whereas the national average increased $9,474 over the same period.
  • Homes purchased in the Columbia housing market nine years ago have appreciated by an average of $33,176, whereas the national average increased $3,419 over the same period.

Unfortunately for the Columbia housing market, the local economic outlook is not as encouraging as one would like to see. While the unemployment rate has improved over the last year, it still lags behind the national average of 5.9 percent. Accordingly, Columbia improved its unemployment rate from 6.6 percent last year to 6.3 percent this year. The local employment growth is poor and needs to exhibit drastic improvements. On a more positive note, however, the entire state should expect to see great improvements in nearly every industry.

Steady gains and new employment opportunities should promote more income for everyone across the entire state. In fact, experts believe that employment opportunities will increase by as much as 2 percent over the next year. However, increases in real income will remain tempered, or at least should, as 2015 isn’t expected to bring significant increases. South Carolina, as a whole, has been unable to keep up with the rate of real income exhibited by the rest of the country.

It is also important to note that new construction is on the rise since last year. New construction in the area should promote a more stabilized inventory. In fact, new construction involving single-family houses has increased by more than one percent. And while new construction is the traditional driver of supply, foreclosures and short sales now have an increasing impact on inventories. Rising inventories will then place downward pressure on median home prices. It is this pressure that makes the Columbia housing market more affordable than markets like San Diego. Whereas the average homeowner in the United States will allocate more than 16 percent of their income to the mortgage, homeowners in Columbia only spend about 9 percent of their income on mortgage payments.

Over the course of the next few years, foreclosures are expected to significantly impact home values. In fact, South Carolina, as a whole, has the 10th highest foreclosure rate in the entire country. In Columbia, almost 2 homes out of every 10,000 are foreclosed on or at least entering into the process. According to Zillow, “the percent of delinquent mortgages in Columbia is 5.7 percent, which is lower than the national value of 6.4 percent. The percent of Columbia homeowners underwater on their mortgage is 23.6 percent, which is higher than Columbia Metro at 20.5 percent.”

There is reason for homeowners in the Columbia housing market, or those looking to get into it, to remain optimistic. According to real estate professionals, the entire South Carolina real estate market is improving. “It’s been healthy, it’s been better, it’s been stronger, but it’s not a huge influx. It’s just kind of a steady healthy growth,” said Danny Glenn, a licensed real estate agent since 1974. According to Glenn, the market is slowly improving and the outlook for 2015 is encouraging. “Over the last few years, we’ve seen houses stay on the market for a long time, and that time has shortened, sales have picked up, the inventory’s down a little bit and the market time has shortened,” he explained.

According to Trulia, the most popular zip codes in Columbia are as follows:

  • 29229: Average Listing Price ($196,170)
  • 29223: Average Listing Price ($208,930)
  • 29063: Average Listing Price ($260,390)
  • 29212: Average Listing Price ($205,995)
  • 29205: Average Listing Price ($226,993)

Columbia Housing Market Summary:

  • Current Median Home Price: $152,800
  • 1-Year Appreciation Rate: 3.2%
  • Unemployment Rate: 6.3%
  • 1-Year Job Growth Rate: 1.3%
  • Population: 133,358
  • Median Household Income: $48,672

Columbia Housing Market Q1 Update:

Columbia real estate investing should continue to see a lot of activity for one reason in particular: the foreclosure market. According to RealtyTrac, Columbia has about 1,385 homes that are in some stage of the foreclosure process. That means that these properties are either at risk of being repossessed, are serving as non-preforming loans on the books of banks, or are scheduled to be placed up for auction. With nearly 1,400 homes in some state of distress, foreclosures are 42 percent higher than they were at this time last year. Over the last 30 days, however, foreclosures rose an impressive 170 percent. At this point, distressed properties will serve as a great source of deals for those interested in Columbia real estate investing.

While the sheer number of foreclosures will help investors, the discounts on these properties may be even more impressive. The median sales price of a non-distressed home was $135,000. The median sales price of a foreclosure home was $76,226, or 44 percent lower than non-distressed home sales. For those of you keeping track, that is an average savings of $58,775 per home.

Columbia real estate investing will continue to see most of its deals come from pre-foreclosures, or homeowners at risk of loosing their property for failing to pay mortgage debts. These homeowners make up 70.5 percent of the distressed properties in the Columbia housing market. Homes scheduled to be placed up for auction make up 26 percent, and the remaining 3.5 percent are all sitting on the books of banks as non-performing loans.  Each of these scenarios is a great source of deals for Columbia real estate investing.

While Columbia hasn’t been able to keep up with the recovery, from a national standpoint, it is still very attractive to investors. The affordability of the Columbia housing market will continue to attract investors.

Columbia Real Estate Investing Statistics:

Statistics regarding the Columbia real estate market

Columbia County Map:

Map of Columbia neighborhoods

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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