Charleston Home Rental Rates 11th Highest in U.S.

forrentTenants living in the Charleston area already know they are paying high rent, and it just goes up every year. Now, the numbers are confirmed even more by RentRange, a rental market service that is part of Luxembourg-based Altisource. RentRange found that the Charleston area is actually the 11th highest in the country for the last quarter of 2015 compared to the same period a year earlier. The rental rate in Charleston increased 10.6%.

RentRange CEO Walter Charnoff said, “The single-family rental market remains strong across the U.S. as the homeownership rate continues to decline and a higher percentage of the population migrates to rental housing.  As the real estate market continues to improve, we are seeing significant rental price increases in many markets, which bodes well for investors in this space.”

Jumbo Loan Can Mean Lower Payment or More House

jumbo vs smallIf you’re looking for houses around the $400,000 price range, you might want to look a little higher…say $417,000 to be exact so as to compare the Jumbo Loan to the 30-yr Conventional Loan.  Several lenders are offering lower interest rates for homes costing more than $417,000 than they are for homes under this price mark. The difference can mean being able to get  $15000-$20000 in purchasing power for the same or lower monthly payment.  This could mean being able to choose the house with extra square footage and nicer upgrades for the same payment as the smaller, plain jane house.

Will Real Estate Market Pop Again?

Last month I reported on the Year In Review Residential Market Update where local economists said they expect 2016 to be a great year for the economy and real estate.  This month I share with you Keller Williams Realty Co-Founder Gary Keller’s Vision for 2016 and beyond.  Gary spoke a couple weeks ago in New Orleans at the annual Keller Williams Family Reunion where the franchise’s agents from around the world convene at one location for a sort of “recharge” conference.

In Gary’s Vision 2016 speech, he basically said that the high housing demand from buyers, the very low inventory, and the low interest rates are great for the real estate market, but not so great for home prices which are rising too rapidly. He says this momentum will inevitably outstrip the ability for buyers to afford homes because wages and inflation are not increasing at the same rate.

Gary said that 2015 was the fifth best year in home sales in the history of the United States. And three of the top nine years in the history of real estate have been in the last three years!  We are seeing the highest peak in home prices in real estate history.  The image below shows the annual average trend line for median home prices since 1989.  At an average of 4% it was on track until we hit 2001. At that point the trend line reset itself, and notice that we are on the edge of the trend line now possibly setting up for another slow down in the market.

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Right now buyers are enjoying low interest rates that average about 3.65% for 30 year fixed conventional loans.  The problem is there aren’t enough homes on the market. Buyers are competing for the same homes and driving the prices up. There is extreme pressure for the Fed to raise interest rates, and when that happens the monthly cost to finance the same home will go up.  A 1% mortgage rate increase equals about a 10% increase in the monthly cost of a home.

We are also seeing fewer first time homebuyers than the market needs to remain healthy.  Nationally, about 32% of home buyers in 2015 were first time homebuyers.  Gary said this percentage needs to rise to about 40%.  It all starts with the first time homebuyer buying the lower priced homes which then allows those sellers to move up into larger and more expensive homes, and so on and so on like a domino effect.  Student debt is a large reason why first time home buyers are putting off the decision to buy.  They are graduating from college with too much debt to be able to afford a home.

The image below shows how now is the best time for buyers to afford a home as compared to what it’s been like in the past.   The average home buyer will spend about 15% of their income on mortgage payments.  For first time home buyers, that percentage is actually higher…more like 25% of their income.

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SC #2 Move-To State

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Based on an annual moving study by United Van Lines, South Carolina is 2nd on the list for move-to destinations for the second year in a row. #1 is Oregon.  According to the survey, nearly 63% of all moves in the Palmetto state were inbound, meaning more people moved from a different state to SC.  The Charleston Metro Chamber of Commerce estimates the Lowcountry is attracting about 43 newcomers per day!

Carolina Park Breaks More Ground

Cumberland_334_800x600_webCarolina Park, Mt. Pleasant’s fastest growing master-planned community, has broken ground on three new neighborhoods – two in The Village and one in Riverside. Builders for The Village include Ryland Homes, Saussy Burbank, Sabal Homes, and David Weekley.  Riverside has a number of preferred custom builders to build the perfect home for you. In 2015, work began on the Outdoor Pavilion, the new Mount Pleasant Fire/EMS Station, new trails and even a new lake! Planning is well underway for the new elementary school (slated to open in Fall 2017) and a new public library.  Search Carolina Park listings with the link below, and contact me if you would like to schedule a tour.

Search Carolina Park listings

2015 Year In Review Residential Market Update – Charleston, SC

2015-year-in-reviewThe outlook for South Carolina and the Lowcountry is positive and “rosy”, according to two economists that spoke at the Year In Review Residential Market Update at Trident Technical College a couple weeks ago. Stephen Slifer, Economist/Owner of NumberNomics and Dr. Joseph VonNessen, research economist at the University of South Carolina’s Moore School of Business, presented their annual market forecasts to Charleston area realtors.

VonNessen said that South Carolina’s economy is faring better than the US average. He also said that 2015 was the 6th year of expansion and the best year yet since 2010. Higher wages and creation of new jobs have contributed to the housing market growth. Construction is currently the #1 industry.  Real estate sales in the Charleston area increased approximately 20% over the past year, and median price rose about 6% from the year before. VonNessen anticipates sales to increase an additional 10% in 2016, while Slifer predicts home prices will go up an additional 5%.
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Slifer said that rent has increased by about 3.2% and the 30-year mortgage rate will probably end up around 4.5% by the end of the year.  The following chart shows Slifer’s predictions for GDP, unemployment, inflation, Fed. funds rate, 10-year Note, and 30-year mortgage.

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Read full slide presentation

New Development in Mt. Pleasant: Oyster Point

1208151517A new large development opened earlier this Fall off of Rifle Range Road in Mt. Pleasant called Oyster Point that has homebuyers excited.  D.R. Horton and its sister high-end builder Emerald Homes are the builders and plan to erect almost 600 homes.

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The neighborhood includes townhomes and single family detached.  Currently the townhomes start in the mid $300,000’s; many of the single story homes start in the low to mid- $400,000’s; and the two story homes start in the upper $400,000’s on up.  The homes are constructed with cement hardi-plank siding, Energy Star heat and air, Energy Star appliances, Energy windows, tankless water heaters, and in-ground irrigation systems.  Standard features also include granite countertops, stainless steel appliances, hardwood, (in foyer, powder room, dining area and choice of hardwood or tile in the kitchen) and crown molding in the foyer and dining room.

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Although the homes are constructed with great quality and features, the land and location are really what make this neighborhood attractive.  It has beautiful ponds, wooded lots, and marsh views to offer, and it’s just a mile north of the Isle of Palms Connector making it an easy bike ride to the beach.  Residents are already enjoying the Oyster Point Amenity Center which has an oversized swimming pool, playground and four tennis courts.  A second set of tennis courts also will be added near a 960-foot community dock to a tidal creek.  But even more unique is the 30 acres that the developer turned over to the Town of Mount Pleasant to create Fort Palmetto Park.  This area comes complete with a newly built tower, three miles of walking trails and more than 150-year-old earthenworks that Confederates under Gen. Robert E. Lee had slaves construct to ward off Union attacks from Charleston’s northern flank in the Civil War.

Call me if you would like to schedule an appointment to tour Oyster Point homes.

Caution! Higher Interest Rates Ahead

higher interest ratesWhen things are good, there’s always something around the corner to change it.  And so it goes with interest rates.  With good economic conditions and financial markets Americans are currently experiencing, the Federal Reserve is expected to raise interest rates for the first time in nine years next week.  We knew this was coming.  We just didn’t know when.

Even though we’ll see increases in mortgage rates, it’s likely that they will come in small increments and at a slow pace.  But it may cause some buyers to buckle up and proceed with caution by reducing their sales price budget while shopping for a home.  For example with a $300,000 loan with 30 year fixed mortgage at 4% interest, the monthly payment would be $1432.  Increase the interest by a full 1%, the buyer is now paying an extra $178/month.

The Charleston area has seen a 14% increase in sales and about 5% increase in median price when comparing the month of November sales to same period in 2014.

SCE&G Free Energy Audit Well Worth The Time

photo-thermostatIf you’ve experienced higher than normal power bills this past summer and want to see if there is anything you can do to lower them, I recommend scheduling a free SCE&G energy audit.  It’s easy to schedule online, and it only takes about a week for the auditor to pay you a visit.  My husband and I are pretty conservative when it comes to using energy, and we’ve been using less since our children have left for college, but for some reason the power bill was the highest it’s been since living in the house for 12 years.  I scheduled for the SCE&G energy audit and was very impressed with the suggestions the auditor made.  I was even surprised by some of the things he found too.  In the attic we have several thin spots of insulation; the new HVAC unit we just had installed wasn’t attached to the duct properly; the vapor barrier in the crawl space needs to be attached to the foundation walls and piers to truly encapsulate the space since we just added a dehumidifier;; and we should buy a remote temperature gauge for the dehumidifier so we can monitor it closely and not waste unnecessary energy.  So, why was our bill so high?  He thinks it is was a combination of having the new dehumidifier and an old HVAC unit that was overworking itself before we changed it out.  Just having him inspect the HVAC installation was well worth my time.  Oh, and he left a box of 5 compact fluorescent bulbs as a gift!

https://www.sceg.com/…/save-energy-mon…/home-energy-check-up

Tax Bills Are Out!

Property_TaxCharleston area homeowners received their real estate tax bills this past month.  If your property is a primary residence, make sure you are being assessed at the 4% rate.  If it’s investment or 2nd home, then it would be at 6%.  Also, if you are 65 or older you can qualify for the homestead exemption rate which will cut your bill by about 2/3.   I’m available to look up comparables for your appraised value should you think you are being overcharged.  Remember that properties were reassessed at 2013 values just recently, so your tax bill will reflect these new values.