The Columbia SC real estate outlook these days is a combination of good and bad. The good is that home prices have been rising nationwide for 53 consecutive months – nearly 4 1/2 years! The increases have floated millions of borrowers previously underwater on their mortgages to the safe surface where they can finally catch their breath. In addition, during the first three quarters of 2016, U.S. homeowners were the recipients of more than $837 billion in total home equity.
Now, the bad. Despite such significant increases in home equity, the gains have not been able to fight the negative connotation of rising mortgage interest rates in the minds of consumers. While more young Americans in their home buying years are employed and more millennials have moved into a position to be able to buy for the first time, consumer sentiment for home buying is dropping. Let’s take a look at what’s caused this reaction and what sort of murky picture it may paint for housing in 2017 and beyond.
Most real estate experts say the home sentiment concerns in the Columbia SC real estate outlook are twofold: A shrinking number of consumers see the recent rise in mortgage rates to lessen, and even fewer say their overall household income is higher today than it was this time a year ago. This information was revealed in a recent survey conducted by Fannie Mae. A Fannie Mae economist explains: “Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home-purchase sentiment, at least in the near term. A spike in economic optimism in the immediate aftermath of an election is typical. Whether consumers will sustain this level of optimism into 2017 remains unclear.”
Ironically, the rise in interest rates recently affecting the Columbia SC real estate outlook is generally a reflection of optimism among consumers. Stock market investors pushed investments to record levels in response to the expectation that the new Republican administration will favor growth, business and employment. And, while such expectations would translate into greater income growth, better job security and new businesses – normally important catalysts for the housing market – thus far, indications are that housing sentiment is murky, at best.
The outlook may be fueled, in part, by what experts see as a wide economic chasm in the housing market. Although home values have gained and are continuing to do so, most of the increases have benefitted only those homes in the middle to upper end of the market. This has resulted in negative equity situations concentrating in the lower end of the market – at what is typically described as the bottom 20%.
According to Black Knight Financial Services, borrowers living in homes in the lower-tier of pricing are nine times more likely to be underwater than homeowners in the top 20% of the housing market. Being underwater is loosely defined as those homeowners who owe more on their mortgage than their home is worth. In addition, while several years ago negative equity was a diverse and widespread problem throughout the nation, today it’s evolved into more of a localized market problem. Economists say that at the end of 2010, there were approximately 30% of American homeowners underwater on their mortgages.
Many consumers, though buoyed by the gains in home equity over the past 12-18 months, find themselves unable to access it – another cause for concern in the Columbia SC real estate outlook. This comes as a result of higher interest rates, but also could be a direct result of their inability to qualify for a mortgage loan – regardless of the interest rate. Remember, a number of these consumers not only were underwater because of the housing crash, but struggled mightily to be able to make the house and other payments on time, creating slow credit history and positioning themselves in the minds of lenders as less than qualified. Whatever the reason, the share of equity currently held by borrowers that was available for access dropped from 73% in October 2016 to 33% in December 2016.
While interest rates have edged slightly downward in recent weeks, economists say they may very well move back upward as the new administration takes over, and as the new President's economic plans are made more known.
That raises the question that always plagues the housing industry and is often a part of the Columbia SC real estate outlook: What will the outlook for the spring “housing season” be? While the honest answer remains to be seen, the component parts are these:
1) Rising home prices will continue to be a win effect, although there has been some leveling off in some markets throughout the country.
2) Interest rates, though still somewhat volatile, are comparatively speaking lower than they have been in recent modern times – with the exception of the last 12-18 months when rates were at or near record-lows. Rates are still affordable, despite not being as low as they were this time last year.
3) Home inventory will continue to be a concern, as few homes have hit the market for sale – sellers who would ordinarily have decided to sell are holding off until they have a better selection from which to choose – after all, they need to move up and more out, too.
4) Consumer sentiment, though of concern now, can change fairly quickly. There are plenty of homebuyers in the marketplace that can and will be able to afford mortgages – despite the slightly higher rates – and though they may find themselves paying top dollar in what will likely be a seller’s market, there are deals to be found among sellers who may have priced themselves out of the market and are now needing to sell.
See more articles pertaining to the Columbia SC real estate outlook in the section of articles on Columbia SC Real Estate News just below Columbia SC Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
Columbia SC home inspection facts will always be a topic of discussion in real estate circles. Home inspections are likely to remain in steady demand as the real estate market is expected to continue to be relatively good in 2017. Home inspections are, of course, a valuable tool in assisting buyers in making informed, educated decisions about a house they’re considering purchasing.
Home inspections provide a great deal of valuable information about the overall condition of a home. In addition, the inspection will assess those areas that may require both small and large repairs, as well as any visual issues that may affect the structural components of the house. As with any subjective art or science, the home inspection industry is often victim to a wide variety of myths and misconceptions. Let’s take a look at some of the more prevalent myths and see if we can separate fiction from the Columbia SC home inspection facts.
Myth: The home inspection report will contain everything I will need to know about the house I’m going to purchase.
Fact: The home inspection report will include a good deal of information about your home. However, prospective homeowners are encouraged to accompany home inspectors as they inspect the home. Having the potential new homeowner present will give them the advantage of observing and hearing first-hand what the inspector sees and thinks about the home’s condition. In addition, an inspector will usually give the homeowner suggestions and advice on the maintenance of many areas of the home.
Myth: A real estate appraisal is essentially the equivalent to a home inspection and is just as thorough.
Fact: An appraisal and a home inspection aren’t the same thing, nor do they set out to determine the same results. There’s a reason both an appraisal and a home inspection report are required by most lenders on real estate transactions – and the reason is they are two entirely different processes. An appraisal is a determination of the fair market value of a home or other piece of real estate. Utilizing Columbia SC home inspection facts can determine the condition of a home and its component parts – plumbing systems, electrical systems, roofs and floors, etc. – which, of course, may affect the home’s value, but the inspection report is more concerned with the home’s actual condition.
Myth: A home inspector can let me know everything that can maybe go wrong with the house I’m thinking about buying.
Fact: While a home inspector is obligated to list in his report items that aren’t working properly or efficiently, he has no way of knowing when certain systems or components will fail. The inspector can only observe the functions of various aspects of the home at the time of the inspection. For example, the home inspector may cite that a home will need a new roof within the next 3-5 years. However, if conditions deteriorate more rapidly than that, a prospective homeowner may find he needs a new roof in less time than was originally estimated. In addition, as has been said of home inspectors in an effort to explain what they can see and can’t see, inspectors aren’t equipped with x-ray vision and can’t see through walls, floors, brick, wood, or concrete. Inspectors can only report on what they view at a particular point in time with a trained eye knowing what to look for. One last thought regarding a home inspection: Read your inspection contract. Some agreements don’t include such items like pest inspection and septic tank failure. These could likely be extras that aren’t part of a standard contract. So, if you're confused or have a question as to what’s covered and what’s not, ask your home inspector to explain it to you – and show it to you in writing.
Myth: All home inspectors are licensed and qualified. Plus, my home inspector says he’s certified, so I should be safe, right?
Fact: Licensing for home inspectors is only required in 30 states throughout the United States. In addition, even inspectors who are licensed will have varying degrees of qualifications. While some home inspectors receive their job training and certification via a variety of related programs and educational offerings, certification does not always equate to competency, and certification is not guarantee that an inspector is fully trained. Some home inspectors receive their training from online courses – having never completed an on-site field inspection, nor passed a comprehensive test for home inspection knowledge. While technically they may have received a certification, they clearly aren't as field-tested as other inspectors may be.
The American Society of Home Inspectors (ASHI) has taken steps designed to set certain standards for performance for its members. ASHI has several levels of certification and offers full certification to those inspectors who have completed a minimum of 250 home inspections and have passed a comprehensive examination. If you want to know more about your home inspector’s qualifications and just how much he knows about Columbia SC home inspection facts, have an in-depth discussion with him. Ask about his training and field experience. It’s also a good idea to ask for a sample of a typical home inspection report so you can see firsthand how thorough the report will be.
Knowing more about the home inspection process and the people that provide the service will give you greater awareness and confidence in the results of the report. In addition to the peace of mind, you’ll likely be more prone to accept and understand the inspector’s findings about the house you’re contemplating buying.
Be on the lookout for these and other myths to distinguish from Columbia SC home inspection facts. They are great for providing a certain amount of information about a home. Just make sure you understand what that information is and what is being reported, recommended and observed by the home inspector.
You can find more articles pertaining to Columbia SC home inspections in the Columbia SC Home Inspections section of our site below Columbia SC Real Estate Categories in the column to your right.
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It’s time to look at your Columbia SC taxes again. Another year has come and gone and soon it will be tax deadline day. Regardless of whether you hire an accountant, use an online tax service, or file your income tax returns yourself, one question constantly appears on your tax return form. The question? Did you move last year?
While the answer seems relatively simple – you either moved or you didn’t – the answer may often create a lengthier list of additional questions that may affect how much you either owe to or are to be refunded by the IRS. Let’s take a quick look at three separate scenarios worth considering, and what you should know about each – and how they may affect your Columbia SC taxes.
If you moved to a new state…
If you relocated to a different state during the tax year, you’ll be required to file a part-year tax return for the portion of the year you resided in that state. Naturally, you should receive W-2 forms from your employer with income information for each state you lived in during the tax year. When it comes to the tax return itself, if your move was precipitated for work purposes, it’s possible to deduct moving expenses for the relocation. If that’s the case, make sure you have proper back-up – receipts for storage fees, movers, and travel expenses. While moves paid by your employer are not deductible, it’s still a good idea to have all your receipts in the event you find out they aren’t eligible for reimbursement by your employer, but may be tax-deductible. That could be good news for your Columbia SC taxes.
If you bought a home…
If you purchased your home during the taxable year, welcome to a whole new list of expenses, but also some nice tax benefits. Homeowners can deduct mortgage interest expense they paid during the taxable year, prorated property taxes for the time they owned the home and any loan origination fees or “points” (a percentage of the mortgage loan amount usually charged by the lending institution.) If you have a mortgage – and these days, who doesn’t? – you should receive Form 1098 from your mortgage lender. Form 1098 should include mortgage interest you paid during the taxable year, real estate property taxes paid out of the escrow account on your behalf, and any points you may have paid as a result of obtaining the loan. In addition, the form will show any private mortgage insurance (PMI) premiums, if applicable, which are also tax-deductible.
It’s also important to have copies of your closing statement and the closing disclosure (legally required from the mortgage lender to the buyer no less than three days prior to loan closing.) These documents recount the financial trail of the sale and closing of the loan. The two forms can prove invaluable to tax preparers because they can readily see the information necessary for preparing your Columbia SC taxes – along with the Form 1098 from your mortgage lender.
If you sold a home…
While selling your home lacks all the tax-deductible perks buying one has, in most situations you can protect the profit you earned from the home’s sale from being taxed. IRS regulations say a profit of up to $250,000 for individuals and up to $500,000 for couples filing jointly need not be reported on your tax returns – if you primarily lived in the residence for a minimum of two years out of the last five years.
Again, as with buying a home, it’s a good idea to keep the closing settlement for your records as well as any receipts for any home improvements you’ve performed on your home. The reason? The cost of replacing a roof or adding solar panels could potentially be used as expenses to be subtracted from the original profit amount. In addition, experts say, homeowners should add the cost of such items to the price of the home when they sell it. Naturally, unless you were fortunate enough to sell a multi-million property, property values rarely reach levels where the $250,000 or $500,000 exclusion applies to the average U.S. home seller. With the average sales price of a home in the nation at around $350,000, the home value would likely have to more than double to reach the exclusion level.
For situations where you as a seller didn’t reside in the home for the required two years out of the last five, certain provisions may apply that could affect your ability to get a partial exclusion. If there are circumstances beyond the homeowner’s control – such as an illness or job transfer that required you to relocate – you may still be able to avoid paying taxes on at least part of the profit. Experts say in such unforeseen circumstances, homeowners are sometimes granted half the exclusion amount.
As is the case with any tax-related question, if you have concerns about what is and isn't deductible on your Columbia SC taxes, we strongly encourage you to consult a CPA or tax professional. And, as always, make sure you have all home-related documents and expense records in a safe place at your disposal in the event you’re asked a question that may require back-up for your tax preparer.
Knowing as much as possible about what tax consequences homeownership carries with it is an important asset. And, for homeowners who’ve moved during the tax year, it can mean the difference from being able to deduct money from your Columbia SC taxes and having to potentially pay more.
You can also find additional information online at www.irs.gov and by searching broader keywords on the web such as “real estate tax deductions” or “home tax deductions.” Users may also find it helpful to type in the actual question to search for accurate answers. For example, “I sold my home in 2016, what are my tax consequences.”
You can find more articles pertaining to Columbia SC taxes in the Taxes section of our site below Columbia SC Real Estate Categories in the column to your right.
We also post tips daily on Twitter and Facebook and would love for you to follow us there as well.
Columbia SC home buying advice is usually limited to ideas and tips to help you begin the house hunting process and what to do during each step of that process. Let’s take a look at several things to consider after you’ve found a home and are preparing to close the deal.
So, you signed the contract to buy your home and all that’s left to do now is sit back and wait for the closing day to get here. Right? Well, not exactly. There are a few important considerations to remember on the road to becoming a homeowner – regardless of whether it’s the first time or the fifth!
Don’t let your rate expire
Until your loan is closed and the papers are signed, the interest rate your lender quoted you won’t last forever. Mortgage interest rates can and do change daily. Normally, a bank or lender will lock-in your interest rate for a reasonable period of time in which to close your loan – usually between 45 and 60 days. If the lock expires, you may have to renegotiate and pay a higher rate. Keep a watchful eye out for hindrances along the way that may prevent your loan from closing during the rate-lock period. Keep in touch with your attorney during the preparation of the closing paperwork and let him or her know to alert you if there are any title issues as soon as possible.
It’s not your house just yet
In some markets, a walk-through of the home before final closing is more prevalent than others. Most real estate sales contracts allow for a walk-through up to 24 hours prior to the closing of the sale. Another piece of Columbia SC home buying advice: take advantage of the walk-through. For your own peace of mind, visit the home with your real estate agent – just to make sure everything’s as expected.
It ain’t over ’til it’s over
The often tedious and time-consuming mortgage process isn't over until the loan is officially closed. Even though you’ve received mortgage loan approval from your lender, in today’s more cautious credit lending environment some mortgage lenders choose to re-verify income, credit or other qualifications just prior to the loan closing. Our Columbia SC home buying advice, therefore, is to not make substantial changes to your financial situation until the closing is over. For example, don’t immediately go out and buy a brand new car for your brand new garage. And, don’t apply for new credit cards or other credit accounts or take a new job – without talking to your mortgage loan professional first. Sometimes even the slightest change to your financial status can alter your creditworthiness or disqualify you from being approved for a mortgage.
Do your homework
When you close the sale of your home, it’s all yours – for better or worse. In most states across the U.S., the law tends to favor the home buyer and requires the seller of the home to disclose any issues with the home and to confirm they have been resolved. In other states, “caveat emptor” – or let the buyer beware – prevails. As such, it’s the buyer’s responsibility to make sure the seller has taken care of any loose ends like closing out building permits, released any liens from the real estate title report and, resolving any other issues that may affect clear title and conveyance of the home to a new purchaser. Our Columbia SC home buying advice… do your homework and know what’s expected in your state.
The anticlimactic closing of the sale
The actual closing of the sale can occur in one of two ways. Most of the time, the two parties – the sellers and the purchasers – may not need to be in the same room to close the deal. The purchasers sign all the loan documents in an attorney’s office or lending institution, and the sellers sign the deed at the title company or attorney’s office.
Some closings, however, occur at a table designed to accommodate the buyers, the sellers, the real estate agents, the attorneys and maybe others who pass the papers around to be signed and witnessed. This process is thought by many to be outdated and old-fashioned in today’s fast-paced, electronic world.
Whichever closing method you experience, just remember with all the hype and build-up that has preceded the day of the closing, the actual closing itself is relatively uneventful, mundane and can be anticlimactic.
Make the process smooth and seamless
So, you've read the Columbia SC home buying advice we’ve provided so far. What else is there to know, to do, or be prepared for? To ensure the smoothest, most seamless and least stressful closing of the sale, do some research and keep an eye peeled for those pesky red flags. With the professional assistance of trusted team members working with you, you can avoid a number of pitfalls that could delay or halt the closing of the sale. Having a qualified real estate agent is a great start. Your agent can refer and recommend you to the mortgage lenders, attorneys, title insurance companies, home inspectors and others. That's the power of using professionals in the real estate industry. They have a network of people and companies they’ve worked with over time in which they have confidence and trust. Tapping into that network will not only save time and money, it will give you the importance of peace of mind and the feeling of accomplishment that should accompany buying a home.
Columbia SC home buying advice is valuable and should be listened to carefully – especially if it comes from experienced, knowledgeable real estate professionals who have your shared interests in mind – to make your home purchase as enjoyable and as successful an endeavor as it can be.
After all, should it really be any other way?
Read more about home buying advice in the section of articles on Columbia SC Home Buying Tips just below our Columbia SC Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
In Columbia SC insurance news, it's no secret Americans have bought and continue to buy millions of household security cameras and home smoke detectors connected to in-home Wi-Fi networks. However, so far, insurance carriers aren't convinced the technology will improve home safety. Despite the devices designed to prevent billions of dollars in home damage and loss, the average cost of insuring a single-family home is projected to increase in 2017.
Insurers cite a lack of sufficient data showing the security and safeguard devices have made significant impact in loss prevention. In addition, they say the new technology does little to heighten security or encourage American homeowners to be more safety or security conscious. As a result, the nearly $85 billion home insurance industry has withheld across the board premium reductions.
So, what's the significance of this Columbia SC insurance news? As usual, it's all about money in big business. If it can be substantiated that these new technological gadgets improve the safety and security of American homes it could mean billions of dollars in lost revenue. The projected revenue loss will likely exceed the costs major insurers would save in settling insurance claims over time.
For the homeowner/consumer's part, sales of internet-connected home safety systems are forecast to more than quadruple over the next four years. As a result, many consumers feel the insurance companies should embrace their usage and recognize the technology as loss prevention features designed to save money. "Insurance companies should provide an incentive" for homeowners who use internet-connected security cameras, thermostats and lighting, says one frustrated homeowner. Currently, most insurance carriers provide premium discounts for homes utilizing basic security devices. What remains to be seen in the Columbia SC insurance news is the advent of insurers allowing premium reductions for the internet-connected security equipment – especially if it can be proven more effective than the current equipment.
Among the more notable internet-connected technology are devices that alert homeowners like smoke- or carbon monoxide-detectors, doorbell-integrated video for their smartphones and systems that can detect plumbing leaks. As mentioned earlier, sales are expected to increase four-fold by 2020. ABI Research, a quantitative technology research company, predicts 360 million smart-home devices to be delivered in 2020, up from 79 million in 2016 and roughly 40 million in 2015.
While some carriers have made Columbia SC insurance news by offering modest premium discounts for the new devices, the savings aren't significant enough yet to reduce the average home insurance premium. Insurance insiders predict the average premium on a single-family home in the U.S. will increase 5.5% to $1,293. The premium represents a whopping 61% increase from 2006.
In 2014, a study was conducted by Morgan Stanley and Boston Consulting Group that concluded smart-home technology could reduce potential home losses by 40% to 60%. It was also estimated the devices could reduce insurance premiums worldwide from $32 billion to $47 billion over the next decade. Worldwide, home insurance premiums reached nearly $161 billion in 2013, according to the study. The projected premium savings, therefore, could be from 20% to 30%.
Some insurance industry experts say connected-home technology could change the basic need to even have insurance coverage. They contend a reduction in the severity and frequency of home losses comprise the bulk of insurance premiums. The question, they say, is when would premium dollars be reduced by a substantial amount?
While insurance insiders agree insurance coverage will never be able to be replaced completely because of hurricanes, tornadoes and other natural disasters, there should be savings to be enjoyed in the future.
The research and data being collected from homeowners and analyzed by insurance carriers has been compared to similar efforts by auto insurance companies. Auto insurers have used devices that monitor how far their customers drive and how frequently they slam on brakes. They've been using that decade-old research to adjust pricing of insurance premiums. In some cases, drivers who agree to use the data collection tools can save as much as 30% off their premiums. One can only imagine how a 30% homeowner's premium reduction would make Columbia SC insurance news!
Although studies are being conducted now, experts say it will probably take several years to confirm smart-home technology can translate into home insurance savings. Insurance giant, State Farm, offers a 15% premium savings to homeowners with certain internet-connected home security systems. The company deems those devices better than more traditional security systems or smoke detectors because it's easier to verify they are installed and operational. In addition, other home insurers are giving incentives to homeowners to buy connected-home devices – with a bonus if the insured homeowners will share certain data with the carrier. For example, Liberty Mutual Insurance provides discounts for its customers who use internet-connected security devices or smoke alarms. The program is currently offered in 38 states. And, if homeowners allow the company to verify the devices are operating properly they can receive an even larger premium discount.
Another insurance company, American Family Insurance, discounts the cost of Ring Video Doorbells, a product containing motion sensors, cameras and microphones. The doorbells allow homeowners to view and remotely talk to visitors from a smartphone or other device. The company also offers a program to reimburse the deductibles of any of its customers who experience a burglary. With insurance deductibles averaging between $600 and $800, that incentive can be compelling. Though other testing and studies are ongoing, the Ring Video Doorbells company recently compiled a study with the help of the Los Angeles Police Department. In the study, it was concluded that the doorbells reduce crime, however, more in-depth data is expected to take a few years to compile. Industry experts say most insurance companies need a minimum of 10 years of data before any substantial changes are made to their premium structure.
In the meantime, homeowners should keep a watchful eye on Columbia SC insurance news as advances in smart-home technology are made often, with home security and safety as one of the most important goals.
You can find more articles pertaining to Columbia SC home insurance news in the Columbia SC Insurance section of our site below Columbia SC Real Estate Categories in the column to your right.
Remember, we post tips daily on Twitter and Facebook, many of these relate to insurance as it pertains to homes and homeowner's insurance. Check us out there.