By VICKI BROWN
In the last two years, the real estate market has experienced a boom.
By mid-April of 2020, sales were soaring as buyers took advantage of record-low mortgage interest rates and home sales reached their highest level in 14 years.
Since then, prices have surged, inventories have been slim, and there has been a huge demand for new home construction. But now, consumers are wondering what’s happening with the housing market.
According to Redfin, in Colleton, the average sale price for a home is $194,000, a 22 percent increase over last year. Out of those sold, most sold for 3 percent under list price after being on the market for approximately 68 days and pending in 42 days.
But the housing market is having a crisis right now.
“The market is hot,” said Todd Land of Coldwell Banker. “We are getting lots of calls, but what we need is inventory.”
While many people are looking to buy a house right now, few are selling and even fewer are building.
Victoria Culpepper of Century 21 agrees. “Homes for sale are going fast, but we just don’t have enough houses to show to buyers,” said Culpepper.
At Cole and Associates, Broker Terri Cole is excited about the market. “Houses are moving incredibly fast and selling for top dollar,” said Cole. “Our issue is that there are not enough houses for sale to supply the demand.”
Understanding the market
If you have been considering selling your home, now is the time. According to realtors in Colleton County, it looks as though the market will remain stable, and a crash like that in 2006-2014 that culminated in disaster for millions of homeowners is not likely to happen again.
Between those years, nine million people lost their homes to foreclosure or short sale. Housing values plunged 30 percent and homeowners lost $7 trillion dollars.
First, lending standards that were very loose during those crash years have now been regulated. Significant adjustments have raised standards and obtaining a mortgage is now more difficult. There is a rigorous income and asset check by the Consumer Financial Protection Bureau that was created to enforce the new regulations. As a result, the housing market is now safer than it was 15 years ago.
According to CoreLogic, another reason is forbearances during the pandemic.
In March, 2.6 million homeowners’ mortgages were in forbearance plans. As the pandemic economy is slowly recovering, many homeowners have gone back to work and are making their home payments.
But an inevitable problem is that some owners in forbearance will fail to secure a modified loan from their lenders. They will lose their homes when the forbearances end. Financiers at ATTOM Data Solutions expect at least 200,000 defaults in late 2021 and a 70 percent increase in foreclosures over the next two years.
Additionally, people are staying in their homes longer because of equity. Equity is the difference between the current market value of your home and the amount you still owe on it. Equity can be an incentive to stay in your home longer if prices rise because your equity increases, too.
Right now, officials say this is a seller’s market. If you are thinking of selling your home, there are plenty of buyers out there looking for one.