Housing market in Columbia regains its strength
COLUMBIA — Almost 10 years after the housing market crash of 2008, real estate experts said Columbia is finally back on its feet.
"The economy is getting stronger, employment is getting stronger, I think more people are willing to buy houses," RE/MAX Realtor Keith Boles said.
The "no-doc" loans that were popular in 2008 allowed people to get loans from banks without proof of income. As a result, home owners couldn't keep up with payments and the government foreclosed their homes. Thus, the burst of the housing market.
Columbia, however, didn't crash as hard as the housing markets on the east and west coasts.
"Housing values were flat, or very slightly increasing for those years. We did have more foreclosures in that time frame than we typically do, but we didn't experience the worst of that," said Jim Meyers, President of the Columbia Board of Realtors.
Columbia's market has always been relatively healthy, Meyer said. On average, houses in Columbia appreciate between 3 and 5 percent a year.
"Home prices are anticipated to increase 3.9 percent and existing home sales are forecasted to increase 1.9 percent," according to Realtor.com's 2017 National Forecast.
Meyer said these numbers are expected to stay the same in the coming years as well.
The issue that Columbia is facing now is the lack of housing inventory, making it a seller's market.
A seller's market means that there is not a huge amount of houses on the market for sale in comparison to the demand for them. This issue carried into the new year from 2016.
"A lot of houses are selling in shorter periods of time than they typically do because they're many buyers and fewer sellers, so that gives the seller more negotiating room when a buyer makes an offer," Meyer said.
The Columbia Board of Realtors reported the average sale cost of an existing single-family home in Columbia was $173,000 in 2016. A newly built single-family home costs almost $280,000. This $100,000 difference is dependent on the house's amenities, location and age.
The stronger demand for houses also means that there is a larger population of people in the area. This increase in population drives the seller's market, as well as the local economy.
"As the economy gets stronger, interest rates are going to go up because inflation is going to go up, and demand for money is going to go up. If we don't have a strong economy we don't have a strong housing market," Boles said.
With a steady increase in the economy and population, the housing market is soon to follow.