Multiple local, state, and national indicators in the real estate industry point to the Columbia area remaining famously hot for home sales in 2020. This is especially true for anyone looking to sell a home.
According to Owen Tyler, president of the S.C. Realtors Association and owner/partner in charge with The Cassina Group in Charleston, the Midlands area is a seller’s market. “The median sales price was up in 2019 over 2018,” he says. The Annual Report on the South Carolina Housing Market by the S.C. Association of Realtors shows Midlands-area median historical home prices increased 7.1 percent from 2018 to 2019 from $169,900 to $182,000. This is a 21 percent increase over 2015. Additionally, the average sales price in the Columbia area in 2019 was up 6.1 percent over 2018.
“We are really seeing a movement of average sales prices going up,” Owen says. “The largest reason is just a lack of housing with more people who want to move here. Single family homes are always the preferred property, and Columbia leads the state in people who buy single family homes with four bedrooms. Condos also make up a good share. The percent of condos was up 7.3 percent from 2018, and even properties with two bedrooms or less were up. The market is up as a whole.”
These numbers point to a strong real estate market, and it is not just because sales numbers are going up. Owen says, “This is considered a healthy market because lending policies in place are affirming people are qualified to make purchases. Foreclosures are down. People aren’t losing their homes. Lenders are assuring loans are good for the buyer. We see this as a healthy market.”
National indicators that track residential home sales trends reinforce the numbers from the S.C. Realtors Association.
Realtor.com lists Columbia as one of the top 10 housing markets in the nation. No other South Carolina city made the list. According to the report, these top markets have plenty of room for prices to increase and will be better able to sustain their market growth and weather any slowing trends.
Realtor.com notes that housing and economic momentum, coupled with lower home prices and healthier levels of supply, will create the perfect intersection to attract buyers. Down the road, the big draw for these top 10 markets will continue to be their levels of affordability. Even with recent price increases, both asking and closing prices remain affordable and below the national average.
According to Taylor Oxendine, chief executive officer of the Central Carolina REALTORS Association, “The housing market offers more mid- to upper-range homes in the Columbia area than those falling within the lower price range.”
A number of indicators point to an ongoing tightening of the market for homes in the lower price range that appeal to young or first-time buyers.
Taylor says, “The biggest positive for the Midlands’ housing market is that we have a lot of affordable homes. When compared to Charleston and Greenville and other places in the Southeast, it’s fairly affordable to live in the Columbia area.”
Columbia’s draw as a place for start-up businesses to succeed brings more potential young buyers to the area. INC. magazine recently recognized Columbia as one of the top 50 “surge cities” in the country for start-up companies to find success. Columbia came in at No. 42 following Charleston at No. 7 and Greenville at No. 33. This trend is another positive one for the Midlands area as employees at many of these start-up companies are typically millennials who are at the prime age to make their first home purchase.
The number of affordable homes available is very low for young or first-time buyers in the Columbia area. “Thirty-two is the average age when someone buys a first home,” Taylor says. According to the 2020 National Housing Forecast from Realtor.com, this housing shortage will continue in 2020 and possibly reach a historic low level.
Limitations on development pose a challenge in the Midlands area for expansion of affordable homes for first-time buyers. Taylor points to the irony of increasing traffic that results from development as a big driver of the movement to limit development.
“Local officials have to balance people complaining about traffic and the need for growth,” Taylor says. “Chambers and homebuilders work with local governments to explain smart growth and smart development. Plus, around 70 percent of the property in the city of Columbia isn’t taxable. Having more businesses paying taxes in the city would lower the amount of taxes people would have to pay.”
Another issue facing some young first-time buyers is student debt. A January 2019 report from the Federal Reserve notes the increase in student loan debt between 2005 and 2014 reduced the homeownership rate among young adults by two percentage points. According to Realtor.com, South Carolina ranks 14th in the country for the ratio of down payment versus student debt with an average of $33,933 in student loan debt compared to an average $22,200 down payment. “Debt is often an indicator of a first-time buyer’s ability to purchase a home,” Taylor says.
Looking ahead, Owen and Taylor agree that the local real estate market looks positive for the immediate future. Policies supporting home buying, a strong economy, and solid growth trends in the local economy all point to a robust local housing market.