IS NOW A GOOD TIME TO BUY?

Rus Horton

 

The economic meltdown and collapse of the real estate industry flooded the market with foreclosures. Home prices went down. Mortgage interest rates fell. That was a good time for buyers. But in the midlands, there was an impasse between buyers and sellers as most sellers held tight to their perceived home values.  However, with more and more foreclosures flooding the market, sellers finally had to face reality and start cutting prices to compete with foreclosures.

Today, foreclosures are on the decline, and home prices are recovering from one of the worst housing crisis ever. That being said, according to BankRate.com, SC is still ranked 8^th for average foreclosure filings. Nationally speaking, as reported by DataQuick’s January Property Intelligence Report, 31 of the 42 counties analyzed had fewer foreclosures compared to the previous month, quarter and year.  Keep in mind that prior to the collapse South Carolina had seen moderate appreciation rates, whereas some of these other areas were seeing above average price increases.

Mortgage rates began creeping up in late December 2012 as a result of the federal government resolution to the then looming Fiscal Cliff issue. In May of 2013, encouraged by a recovering economy, Federal Reserve policymakers announced that they would begin to reduce their purchasing of Mortgage Backed Securities which, prior to, had a major influence on mortgage interest rates. The result was a slow increase in the national average 30-year fixed rate from ~ 3.500% then to ~ 4.500% now.

In summary, we’re seeing a slowdown in foreclosures locally. The end result is that home prices are leveling off and, as foreclosures continue to decrease, home values will naturally increase. Combine this with the fact that mortgage interest rates are about 1.000% higher today than this time last year and you could conclude that we have hit the bottom with both home values and mortgage interest rates. So the question is, “Is now a good time to buy?” All I will say is that I am reminded of the old adage of investments… buy low, sell high.

 

Rus Horton is a mortgage banker with Palmetto South Mortgage Corporation, a division of First Community Bank. He is a 15-year veteran of the mortgage and real estate industries and is dedicated to providing a positive experience to every customer. He is a member of the Home Builders Association and the Central Carolina Realtors Association. In addition, he has served as a volunteer coach for 14 seasons with the YMCA’s recreational soccer league and as a volunteer with Carolina Children’s Home. To contact Rus, call (803) 429-1029 or email him at Rhorton@palmettosouth.com.