Tag Archives: buying a home

Cheaper to Own House then Rent

Buying a house in Charleston, Mount Pleasant, or even Daniel Island is now cheaper then renting according to a new report from the real estate website Trulia. In virtually every U.S. city it’s better to buy a house then to rent.

“Despite the recent home rebound, rents continue to rise faster then do home prices, and mortgage rates are at record lows,” said J. Kolko, Trulia’s chief economist, in a news release by The Daily.

On average, buying is now 45% cheaper then renting in the 100 largest U.S. cities – a savings of almost $800 a month. With more and more home owners having to leave their homes due to job loss, and a poor economy forces those same people to rent thus increasing the demand for rental properties forcing rent costs upward. Furthermore, mortgage lending is still very tight and less people are qualified to purchase.

These factors result in an almost 5% surge in  rental rates in the past year and a glut of 30 yr mortgages around 3.5 percent. Trulia looked at the average age price of all homes for sale and the average rent of all homes for lease between the beginning of June and the end of Aug. It spread its search from the inner cities to the suburbs. Trulia also baked in various expenses like closing costs, maintenance, renter’s insurance, and taxes.

After the analysis was completed in the winter, it was better to buy in 98 of the top 100 markets including Charleston, South Carolina’s. Purchase mortgage rates have dropped while rents have increased. The study however, is built on some big assumptions, primarily that the hypothetical buyer puts down 20% and qualifies for a great mortgage AND doesn’t sell for 7 years.

With that said, even in a case where the homeowner got just a 4.5% mortgage and only stayed in the home for 5 years, the result was still almost the same. It was cheaper to buy in 96 markets.

Nevertheless, some 6 million properties remain close to foreclosure, and most potential buyers still find it difficult to save up the 20% for down payment. Although there are still loans that only require 3.5% down.

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Charleston SC Home Sales Show Improvement

Charleston Trident Association of Realtors® — (May 9, 2012) – Median existing single-family home prices are firming in many areas of the low-country, while improving sales and declining inventory are creating more balanced conditions, according to the latest quarterly report by the National Association of Realtors®.

Last April, preliminary figures showed 776 homes sold at a median price of $175,000, following an almost equal number of property tours.

“The number of showings our REALTORS® are completing in 2012 is almost equal to the number of showings we saw in 2009, when the market was significantly depressed, but inventory was much higher. This tells us that the prospective buyers in today’s market aren’t just looking. They are serious buyers, making offers and closing transactions” said 2012 CTAR President, Herb Koger.

The national median existing single-family home price was $158,100 in the first quarter, which is 0.4 percent below $158,700 in the first quarter of 2011.  The median is where half sold for more and half sold for less.  Distressed homes2 – foreclosures and short sales which sold at deep discounts – accounted for 32 percent of first quarter sales; they were 38 percent a year ago.

Heading into what is typically the busiest season of the year, year to date figures reflect a market that is in the midst of sustainable, healthy growth. Inventory is 29% lower than it was at this time last year; sales volume is almost 6% ahead and prices have increased a healthy 4% from this time last year.

Total existing-home sales,3 including single-family and condo, increased 4.7 percent to a seasonally adjusted annual rate of 4.57 million in the first quarter from a downwardly revised 4.37 million in the fourth quarter, and were 5.3 percent above the 4.34 million level during the first quarter of 2011 when sales spiked. We are seeing more people coming back into the investment and second home market buying homes for sale in places like Isle of Palms and Sullivan’s Island.

Mount Pleasant SC custom home builder-owner of Sand Dollar Homes, said there are more opportunities in today’s market.  “Historically favorable housing affordability conditions are making it easier for buyers to enter the market despite the unnecessarily tight credit conditions,” he said.  “Housing supply and demand are roughly balanced with overall housing supply at the lowest level in six years, putting sellers on an even footing with buyers in most markets.”

CTAR REPORT

Berkeley County
170 homes sold at a median price of $154,945 in Berkeley County in April. This represents even sales and an increase in pricing compared with April 2011, when 170 homes sold at a median price of $145,000.

Charleston County
476 homes sold at a median price of $228,125 in Charleston County in April. This represents an increase in sales and pricing from April 2011’s 451 sales at a median price of $208,000.

Dorchester County
151 homes sold at a median price of $165,000 in Dorchester County in April. This represents a significant increase in both sales volume and pricing, as 129 homes sold at a median price of $147,490 in April 2011.

Should YOU Sell Your Home NOW?

Now it’s Oct. of 2011… I originally posted this piece below in 2010 in response to this “expert” from the Wall St. Journal who claimed then that home prices would be increasing. Evidently this “expert” was wrong. To further update you as to my opinion I still feel that anyone considering selling should do so now because the housing market is probably only going to worsen.  Fast forward to 2012 and I was correct. There is a thing called shadow inventory that have yet to hit the market up to some say million new homes. What do you think will happen to home prices then?

If you have any concerns about selling your home in Charleston you better start to sell it sooner than later, because as the banks begin to trickle out their foreclosed homes, this will keep the market soft. Furthermore, rates are likely to increase in the next few years which will also deter those considering buying homes to get cold feet or be able to afford less.

(Below Written 05/2010)

It’s been a while since I have posted an opinionated piece because most of my posts are more geared toward news and information for the public and how it pertains to the industry of real estate. However in this case, I couldn’t shake this ludicrous idea by a writer at the Wall St. Journal. I have always respected the Wall St. Journal, but this one has me baffled.
I have been in the real estate industry for going on 14 years now-  (12 years in mortgage financing),  and 5 years as a real estate agent Considering most of my experience has been financially related I tend to follow those trends the most seeing as there wouldn’t be sales of real estate without money to finance them. Let’s face it, there aren’t that many people liquid enough to pay cash so truthfully it all revolves around money. Even insurance revolves around money and is a great indicator of overall economic health. Each property has to be insured, each business, each profession has to have insurance, and yes mortgages have insurance.

With that said, the piece from the Wall St. Journal by James Hagerty goes like this: U.S. home prices will begin a gradual recovery by next year, according to a survey of 92 economists and other housing analysts by MacroMarkets LLC.” They then go onto write; “The analysts surveyed by MacroMarkets on average expect home prices, as measured by the S&P/Case-Shiller national index, to rise about 12% in the five years ending Dec. 31, 2014. As of Dec. 31, that index was down about 28% from its peak level in mid-2006”. 

Obviously I am assuming that Mr. Hagerty is just going off research and information given to him by MacroMarkets and these 92 economists, but I can’t believe the editors of the Wall St. Journal let this go to print. I can’t lay all the blame on the Wall St. Journal because they are apparently getting their info from these economists. I am sure out of 92 economists they most likely have many more years then I analyzing data, but let’s look at the facts and you decide for yourself.

National Mortgage News (an industry news subscription service) sends me monthly emails about the latest data coming from multiple outlets such as: National Association of Mortgage Bankers, national appraisal companies, commercial finance institutions, etc. Remember financing/economics tell the facts about what’s really happening.  Of 11 articles 7 of them were negative, but a few are really telling.

I am just going to give you the blurb “gist” of the piece.

1.)    Residential delinquencies climbed to yet another new high at March 31 with 10.06% of all mortgagors behind on their payments, according to new figures released by the Mortgage Bankers AssociationThink about it… If delinquencies are on the rise, as they have been continuously for almost 3 years how are home prices going to go up? When people are having to short sale their homes, get foreclosed on or bank sales increase, then home prices will inevitably continue to fall.

2.)    Loan applications to buy new or existing homes plummeted 27% last week, reaching a 13-year low, according to new figures released by the Mortgage Bankers Association. If loan applications plummeted on purchases by 27%… Well you don’t have to be a rocket scientist to see that home prices aren’t going to go up if there aren’t any sales.

3.) The loan buyback plague continued on unabated in the first quarter with three seller/servicers, accounting for about three-fourths of the industry’s repurchases, according to an analysis done by National Mortgage News. Here is how this works. When I loan is originated by a company, they then sell that loan to a larger institution (usually Bank of America, US Bank, Wells Fargo, just to name a few). If those loans under perform and have too many delinquencies within the first year then the originating company has to buy that loan(s) back. Another scenario is; if the purchaser audits the file after purchasing it and doesn’t like something in the file they can also force the seller to buy it back. Why is this bad? If the buy backs are due to delinquencies then that means those home owners can’t afford their payments, or lost their job, etc. Therefore, eventually their home will have to be sold and most likely for less than they paid for it. Subsequently sending home prices down.

My last bit to this post has nothing to do with the news articles written by the National Mortgage News, but about financing, FHA, VA, and FNMA. Our government is currently at a 94% debt to income ratio and can barely pay it’s bills. Meaning the U.S. really doesn’t have money to be buying mortgages from banks, and to decrease their risk of having delinquent loans they will have to increase the amount of money buyers will be required to put down, resulting in less people that qualify to buy. Secondly, the U.S. Fed recently quit buying treasury bonds (security instruments backed by mortgages), and If little to no one is buying mortgage backed securities in large quantities then  eventually mortgage rates will increase, subsequently, making it harder for people to qualify for home purchases. The less people qualify the less sales will happen therefore sending home prices down. Simple supply and demand.

Yes; there may be some tiny bits of data compared to the rock bottom days of a year or two ago that might lead economists to believe the trend is for prices to go higher, and yes home sales might have been increasing over the last couple months. However, the increase in home sales is due to one reason and one alone. The home buyer tax credit was about to expire so those people that were otherwise too afraid to purchase finally had reason to. Now that the credit is gone, so goes the buyers.

The overall picture in my opinion is not good, not good at all. As a whole the real estate market is posed to continue to slide, and as the U.S. economy continues to flounder the housing outlook is sure to follow. I am not a pessimist by nature so don’t get me wrong. Yes, everyone should stay positive and believe we can make a change for the better. Believe me I want nothing more than to be wrong, but being realistic is something I am, and the facts point me in that direction.

Follow up: Again I am not sure where the 92 economists where getting their info from..Latest from the Case-Shiller index on 05/25/2010

“The housing market may be in better shape than this time last year, but, when you look at recent trends there are signs of some renewed weakening in home prices,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “In the past several months we have seen some relatively weak reports across many of the markets we cover.”

A separate Case-Shiller index that is released quarterly and covers the U.S. showed home prices fell a seasonally adjusted 1.3% in the first quarter of the year compared to the fourth quarter of 2009.

If you are thinking about selling your home in Charleston, Mount Pleasant, Isle of Palms, Sullivans Island, Daniel Island, Folly Beach or the surrounding areas please contact me and I will gladly meet with you to discuss your options.

To Buy or Build Home, That is the Question?

This is a tricky question, because it really depends who you ask.

If you ask a mortgage loan officer they are going to try to steer you toward buying a built home instead of building because getting a construction loan is a almost impossible these days. Trust me I know because I was in the mortgage business for over 12 years.  My suggestion is if you absolutely have to have a new home, then try to find a semi-custom “spec” (speculative) home. Meaning a developer buys a large plot of land and has multiple house plans from you to choose from. IF you and your real estate agent get under contract on a home that is in the middle of construction but not yet sold your home builder will usually let you pick out many things that fit your taste. Like: the type of flooring, paint colors, trim packages, counter tops, cabinets, even type of roof material, and landscaping so you get a new home with a custom feel without all the hassle of having to hire an architect, permitting, etc.

Since I am real estate agent, built my own home, and once owned a mortgage company I will answer the question for you from my experience.

To be honest with you building is kind of a pain, unless you have a great home  builder and bank. Right now banking and mortgage lending is NOT smooth sailing. It was a pain getting a construction loan when anyone with a pulse could qualify in 2004-2006.  So getting a construction loan now is even more of a nightmare. As an ex- mortgage loan professional I would not suggest building just for that reason alone.  You have to put down a lot more money then you would have to for just a traditional purchase.

If you still want to build just be prepared for a busy few months. Depending on the size of home, the finishes, the town you are building, among others, the process can be from 4 months to 2+ years. There are many meetings involved, decisions to be made, and things to consider, and with a lot of people. IF you really do your homework and find a great reputable, experienced builderthen you can make your process a little easier. In any event building a home is not usually an enjoyable experience, simply because there are so many choices and changes, that can test your nerves.

Precision Construction is Charleston’s best Affordable Home Builder

In closing my suggestion is to seriously think about it before making a decision. You may even consider buying an older home, or a foreclosure and renovating it to look new. If you want a like new home then I suggest letting me find you home that needs a lot of work then let a contractor redo it to your liking. Then you can make changes, additions, and improvements that will suit you. Sometimes when doing a renovation it too can also be a difficult process for getting money from a bank, but one loan that is tailored for this type of process is a 203k from FHA. Make sure you specifically ask about this type of loan and make sure your loan officer is very very familiar with this type of loan.

Charleston SC – Top 5 for Housing Improvement

According to many experts in housing and economics there will be a few place in the next coming years where buying real estate is a good investment, and Charleston, South Carolina is one of them. Read the recent article by MSN.

Home prices of course, are variable and depend on many factors, each of which is difficult to predict. Still, average home prices will drop by 7.9% nationwide in 2010, according to Moody’s Economy.com. In the few areas where there could be positive price growth, the projected increase is modest. “These areas will essentially be flat next year,” says Steve Cochrane, managing director at Moody’s Economy.com.

The top 5 cities for home prices

  1. Tacoma, Wash. (+2.44%)
  2. Memphis, Tenn. (+0.99%)
  3. Pittsburgh (+0.89%)
  4. Charleston, S.C. (+0.18%)
  5. Seattle (-0.50%)

Smaller areas across the Southeast are expected to fare well in 2010 primarily because they fared relatively decently during the housing crisis, says Jeannine Cataldi, a senior economist at IHS Global Insight. “They didn’t have such a big run-up, and they have a diverse economic base that enabled them to stay stable,” she says. Home prices in Charleston, South Carolina didn’t get out of line with household incomes; also, Boeing is investing in a fairly large manufacturing plant there, which could create some potential for income and job growth, says Cochrane.

In short; these pockets of the country share a few important characteristics. One is that they are starting with a limited supply of housing stock. Another is that throughout most of the decade, prices basically stayed in sync with household income, says Cochrane.

Buying a Home from Fannie Mae

Due to the economic and housing crisis Fannie Mae and Freddie Mac have had to unfortunately foreclose on millions of homes. The good new about this is you can capitalize on this misfortune.

Fannie Mae has devised a new program for prospective home buyers called the HomePath program.

This special program has many incentives that make it very enticing to say the least.

Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes

Fannie Mae is offering a 3.5% incentive* for buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010. Buyers purchasing properties listed on this site that are closed within this period may receive up to 3.5% of the final sales price for:

  • Closing costs;
  • The purchase of new Whirlpool® appliances by Fannie Mae; or
  • A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%.

To be eligible for this incentive:

  • Offers must be accepted on or after January 28, 2010
  • Property sales must close before May 1, 2010

HomePath® Mortgage Financing

This special financing is available on Fannie Mae homes with the following logo:

The benefits include:

  • Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
  • You may qualify even if your credit is less than perfect
  • Available to both owner occupiers and investors
  • Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
  • No mortgage insurance*
  • No appraisal fees

To learn more about this program feel free to contact me directly at 843.478.8061

New Jobs in Charleston, SC

 

North Charleston won the fiercely fought battle for a Boeing 787 aircraft assembly plant Wednesday, thrusting South Carolina onto the world stage of aircraft manufacturing.
The Boeing Co. will build the new line at its Charleston International Airport property instead of in Everett, Wash., the nation’s aviation nerve center and longtime home of the company’s commercial airplane business.
The decision was announced after state lawmakers wrapped up a two-day special session in which they approved a rich basket of financial incentives for Boeing valued at $450 million by state Sen. Hugh Leatherman, a Florence Republican who heads the Senate Finance Committee.
The aerospace giant would have to create at least 3,800 jobs and invest more than $750 million within seven years to take advantage of the various inducements.
Tim Coyle, vice president of Boeing Charleston, said the company plans to break ground on the 584,000-square-foot expansion near its existing factory within the next few weeks. Work on the first locally made 787 Dreamliner is expected to begin in 2011.
– SEATTLE, Oct. 28 /PRNewswire-FirstCall/ — Boeing (NYSE: BA) today announced that it has chosen its North Charleston, S.C., facility as the location for a second final assembly site for the 787 Dreamliner program. Boeing evaluated criteria that were designed to find the final assembly location within the company that would best support the 787 business plan as the program increases production rates. In addition to serving as a location for final assembly of 787 Dreamliners, the facility also will have the capability to support the testing and delivery of the airplanes.
“Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane,” said Jim Albaugh, president and CEO of Boeing Commercial Airplanes. “This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica,” he said, adding that this move will strengthen the company’s competitiveness and sustainability and help it grow for the long term.
Boeing Charleston performs fabrication, assembly and systems installation for the 787 aft fuselage sections. Across the street, Global Aeronautica, which is 50 percent owned by Boeing, is responsible for joining and integrating 787 fuselage sections from other structural partners.
Until the second 787 assembly line is brought on line in North Charleston, Boeing will establish transitional surge capability at its Everett, Wash., location to ensure the successful introduction of the 787-9, the first derivative model of the 787. When the second line in Charleston is up and operating, the surge capability in Everett will be phased out.
“We’re taking prudent steps to protect the interests of our customers as we introduce the 787-9 and ramp up overall production to 10 twin-aisle 787 jets per month,” said Albaugh.
“While we welcome the development of this expanded capability at Boeing Charleston, the Puget Sound region is the headquarters of Boeing Commercial Airplanes. Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here,” Albaugh emphasized. “We remain committed to Puget Sound.”

Info gathered from Post & Courier & Boeing

 

About Mount Pleasant South Carolina?

Mount Pleasant is a suburban town in Charleston County, South Carolina, United States, within the Charleston–North Charleston–Summerville Metropolitan Statistical Area. It is the fifth largest municipality in South Carolina, and for several years it was one of the state’s fastest growing areas, literally doubling in population size between 1990 and 2000. The population was 47,609 at the 2000 census. As of 2007, the town had an estimated population of 64,707. Mount Pleasant is included within the Charleston-North Charleston Urbanized Area and is the 3rd largest municipality in this metro behind Charleston and North Charleston.

Mount Pleasant, SC

Click to Search Homes in Mt. Pleasant

Mount Pleasant’s public schools are part of the Charleston County School District.


Elementary Schools


Middle Schools

Both Laing Middle School and Moultrie Middle School served as the town’s high schools before Wando High School was built.


High Schools


Private Schools

  • Trident Academy


Religious Schools

  • Christ Our King – Stella Maris Catholic School-(Catholic Diocese of Charleston)
    • Grades K-8
  • First Bapitst Church School-(Mount Pleasant First Baptist Church)

So where to live if relocating to Mount Pleasant SC? I have lived in Mt. Pleasant since I moved to Charleston in 1999. If I were to characterize it I would put it this way. It is the young urban professional area of Charleston County, suburbia at its greatest. What you may not know is that there are kind of two parts of Mt. Pleasant. The heart of Mt. Pleasant (older area) and newer Mt. Pleasant. There are many great communities in Mount Pleasant with homes for sale. 

If you are considering relocating to the Charleston area and are looking for a nice, clean, and convenient area of town to live in Mt. Pleasant is the place and I am the realtor for you. It’s close to Isle of Palms, Sullivan’s Island, Daniel Island and depending on if you live in the newer part or the heart you are only 15 mins from down town Charleston. If you want to build Precision Construction is Mount Pleasant’s best Home Builder.

To Search homes in some of the nicest communities in Mt. Pleasant simply click the names of the neighborhoods below.

If you have children Mt. Pleasant has some of the nicest and best public schools in the Charleston area, but they are located in newer Mt. Pleasant. Newer Mt. Pleasant has a few note worthy communities. Most of the newer schools are near these communities as well. The commonly mentioned ones being; Dunes West,  Park West and Rivertowne. About 30 mins from downtown these communities are very large and located either on or near a golf course. The problem with living on this side of Mt. Pleasant is the traffic and its distance from shopping, activities, and downtown. Located up hwy 17, getting there can be a pain especially when its tourist season, 5 o’clock or early morning.  A community worth mentioning that is a little older, but on that side of Mt. Pleasant is Charleston National. These homes were built in the early 90’s whereas Dunes West, Park West and Rivertowne are around 10 years old or newer. My opinion on this side of Mt. Pleasant is; if you have children, can tolerate some annoying traffic at times, and like golf its a great place to buy a home.

Older Mt. Pleasant a.k.a the heart of Mt. Pleasant is located very close to the Isle of Palms connector and I’d say most think of the Mt. Pleasant town center.  The benefits of living in the heart of Mt. Pleasant are mostly its proximity to all that Mt Pleasant has to offer.. like shopping, dining, movies and convenience to the islands and downtown.

If you like older quaint communities one that is mention-able is the Old Village. The Old Village real estate for sale is comprised mostly of older homes built in the 50’s and up.. The lots are large, there are mature trees, and there are no restrictions to what you can do with your lot. This is a very desired neighborhood because of its charm and subsequently the prices reflect it. BUT, my favorite neighborhoods in all of Mt. Pleasant are Olde Park and I’On Village.

So if you are considering Charleston, take a look in Mt. Pleasant. I love it here.

James Schiller is Charleston’s best Real Estate Agent

Rules for financing investment homes

Reserve requirements vary depending on the number of financed properties owned (including primary residence):

1-4 financed properties 0wned:

  • 2 months of reserves on the subject property if it’s a second home.
  • 6 months reserves on subj. property if it’s an investment property plus 2 months reserves on each other second home or investment property.

5-10 financed properties owned:

  • 2 months of reserves on the subject property if it’s a second home.
  • 6 months of reserves on the subject property if it’s an investment property plus 6 months reserves on each other financed second home or investment property.

Note: Freddie Mac’s guidelines are *currently* 6 months PITI.

Other underwriting changes for investment properties include:

  • 70% LTV for purchase of 1-unit and 70% for 2-4 units.
  • 720 minimum low-mid credit score.
  • No history bankruptcy or foreclosure in the past 7 years.
  • Rental income must be documented with two years tax returns.
  • Borrowers required to sign form 4506 (which you can expect on ALL loans these days–including owner occupied).

Don’t forget that there is a significant price hit of 0.75% to fee from Fannie and Freddie with investment properties on top of the credit score/loan to value adds (LLPA). Seller contribution is limited to 2% of the sales price with investment property.

Underwriters will be very strict on investment properties in today’s real estate climate so be prepared.

If you are thinking of buying investment property contact me and we can discuss your options before we go house hunting.

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