There aren’t enough flame emojis on the Internet to describe the Columbia housing market. In November, the median home in the Soda City sold for $244,900, compared to $205,000 in 2021. Yowza. 🔥
Despite some seasonal adjustments last fall, prices show few signs of cooling off. Realtor.com recently forecasted Columbia as a top 10 housing market for 2023. But for those hoping to dip their toes in the home buying waters soon, it helps to know what trends to expect. Put on your floaties, and let’s hear what the local experts predict.
Look out for walkability and the suburbs
Graeme Moore, owner of The Moore Company Real Estate Sales and Management, said one of the big trends for 2023 is that the housing market will continue to “fare better than most expected.” Graeme sees buyers of all ages looking to be close to the city center with areas within 10-15 minutes of USC continuing to trend.
Kendall Walsh, an agent at The Moore Company, has seen clients prefer neighborhoods that are near downtown, but also walkable to restaurants and shopping, like the Devine Street area. At the same time, some are looking to the suburbs for more space and flexibility with floor plans. Graeme has seen a broad shift away from completely open floor plans for homes that still have good connectivity between their kitchen and living room.
Andy Shelton, the owner of Birch Custom Home Builders, noted a similar construction trend and has seen a rise in outdoor living rooms and kitchens as homeowners look to maximize their space. Birch Custom Home Builders work primarily near Lake Murray, Chapin, and Irmo. Andy said that while the market is cooling from red hot, the area is poised for growth for years to come.
Eyeing places west
While median home prices for single-family homes in Columbia are around $250,000, Graeme noted the vibrant State Street area of West Columbia, the City of Cayce, and northern parts of Forest Acres as potential hot spots. Over the past month, the median listing price in West Columbia is up 11.6% with homes staying on the market for 47 days.
New Neighbors
Andy Shelton, the owner of Birch Custom Home Builders, has noticed an increase in retirees building homes and moving to towns near Lake Murray — think Chapin, Irmo, and Lexington. He’s seen some retire early and move south where their money goes further, along with warmer winters and tax-friendly benefits.
Worth it to wait?
Travis Wright, a mortgage loan originator at Movement Mortgage, mentioned the phrase “Marry the House, Date the Rate,” which went viral this year. Rates doubled in a very short time and rose to over 7.0% for a 30-year fixed mortgage. Travis believes “buying a house is still one of the best investments you can make, even with the combination of elevated home values and higher interest rates.”
The good news — interest rates are down more than 1% from their highs in November as inflation slows. As the market has cooled, buyers have the opportunity to negotiate more favorable terms in the absence of multiple offers.
Graeme echoed this saying “sellers do need to realize that while values might hold fairly steady, we’re no longer in the insane seller’s market of 2020-2022. They need to expect to make some modest concessions this coming year whether that’s helping buyers with closing costs or coughing up some cash for repairs.”
What about renting?
Graeme and Travis said Columbia rental prices have leveled off a bit — but prices are expected to continue to increase in 2023. Travis noted that we still have a shortage of housing supply, creating a high demand for rentals. This, combined with rising interest rates, has caused some who would have purchased a home in 2022, to extend their leases one more year.
The supply + demand problem
According to both Graeme and Travis, demand still outweighs supply in the Columbia area. This is due to many homeowners sitting on mortgages with historically low interest rates of around 3% with little motivation to sell right now. With interest rates predicted to go down in spring, demand is expected to rise, which will continue to push prices higher.
Travis said, “We won’t see the 15-20% appreciation each year that we did during COVID, but I do not expect to see any noticeable drops in home values in our area.”
SC Housing, the state agency that finances and supports affordable housing opportunities, increased its income limits on one of its down payment assistance programs, increasing the number of families eligible for down payment assistance. Now, any family making less than $115,000 annually may qualify for down payment assistance through the Palmetto Home Advantage program.
