ROCK HILL — The local housing market appears to be on its way to recovery, with more homes being sold and the number of houses available for sale dwindling, according to local real estate agents and economists.
We are seeing the market switch back, said real estate agent Stephen Cooley of Keller Williams Realty of Rock Hill. For the first time in five years we are getting multiple offers. The seller is in control of the transaction.
A combination of low prices and low interest rates are sending more sellers and buyers into the market, agents say.
In January, home sales increased in nearly every area of South Carolina compared to the same month in 2012, according to the state Realtors association. In some regions of the state, the increases topped 40 percent.
In York, Chester and Lancaster counties, housing sales increased a little more than 5 percent.
The improving market can be seen in the number of residential properties available for sale. During the worst of the recession in mid 2008, 3,600 were available to be sold in York, Chester and Lancaster Counties, according to the Piedmont Regional Association of Realtors. In January of this year, the number was 1,700.
Real estate agents say its taking an average of four to five months for homes in the local market to be sold, which is down from a year or more during the recession.
Cooley said the change started last year, when he had the second best year of his 24-year real estate career in 2012.
But even though the market is better, dont expect housing to spawn a strong economic recovery any time soon, according to two local economists. While some homes are being built, new construction hasnt reached the point where it spills into other sectors of the economy.
Sales of existing houses are not the engine to get us out of economic stagnation, said Winthrop University economist Lou Pantusco.
Mark Vitner, a senior economist with Wells Fargo, predicts a slow housing recovery. While there are encouraging signs, it will likely be two steps forward and two steps sideways, for some time, he said.
Still, real estate agents say their workload has picked up noticably.
Connie Delaney of Allen Tate Realty remembers 2007, when she said she would go for days without any appointments. Now she is showing homes, writing contract offers and meeting with clients almost daily.
Stas and Shannon Swerdzewski found out recently how the market has changed.
When they initially put their house on the market last year, it stayed their for six months without selling, Shannon Swerdzewski said. They took it off the market for the holidays and then relisted it. This time it sold in less than two months.
The couple wanted to sell and find another home because prices and interest rates were down, Shannon said. When it came time to buy, they opted for new construction in the Massey subdivision of Fort Mill.
That way we can build what we want, she said.
While the volume of homes available for sale may still seem large, the number that meeting a buyers criteria location, school district, price range, certain amenities can be just a handful, agents said.
Laura Holland found that to be the case. She wanted to buy a house with two downstairs bed rooms. Kirk and Laura Holland also needed to sell their current home to make the move.
From the sellers perspective they, and their agent, looked at what houses in their area had sold for, not what they were listed for, and set the asking price. We were offered what we asked, she said.
Even though the inventory of houses was limited, the Hollands got what they wanted, plus other things such as a brick home and a screen porch, she said.
New construction is one of two ways housing inventory came grow. The other is to convince reluctant, would-be sellers to enter the market.
Many home owners have been unwilling to list their homes because of current real estate prices, or the fact that they owe more on their home than its worth.
Thats especially true of people who bought locally from 2005 to 2007 before the economy tanked, Vitner said. They have little equity in their homes to begin with and most York County home owners have seen their home values drop by 20 percent since 2008.
But agents say now is a good time for those wanting to sell and move up to a bigger house. While the seller may need to put up more of their money to close on their current home, they said, that loss can be made up by buying a bigger home at an attractive interest rate.
Mortgage rates on a 30-year fixed loan are at historic lows of between 3 and 4 percent.
Sellers need to be realistic about their asking prices, agents said. A homeowner wont make up all of the 20 percent loss in value, they said, but the right priced home will get offers.
Buyers need to understand the market too. There is not as much room to negotiate now, agents said.
You dont want to insult the seller, Morrell said. She said its possible to offer $190,000 on a $200,000 home, but not much less. Buyers and sellers should be prepared to be flexible, agents said.
Another good aspect for buyers and sellers, Morrell said, is that current appraisals and asking prices are usually within 5 percent of each other. Thats the closest Ive seen it five years, she said.
Usually the difference has been as much at 10 to 15 percent with the appraisal forcing a drop in price or a no sale.
Data from South Carolina Realtors, the state association which tracks sales data, also has good news for sellers. During the last three years, buyers have been getting more than than 94 percent of the listing price, according to the association.
Foreclosures and short sales - when a house is sold at a price lower than whats owed on it - are affecting sale prices in some areas. Home appraisals are based on comparable nearby sales, usually the last three. When foreclosures or short sales are in included in the list of comparables, they usually drive the price down.
During the past three years, foreclosures in York County have averaged about 600 annually, with the high coming last year at 660. In Lancaster the average is 78 annually.
New construction is making slow strides, according to building permit data from the Catawba Council of Governments. During the last three years, between 800 and 1,000 permits for residential construction have been issued per year in York County. In Lancaster, that number averages about 550 units annually.
How long the interest rates remain at historic lows is also a key question for the housing industry.
The Federal Reserve, through its chairman Ben Bernanke, has indicated it wants to keep interest rates low until unemployment reaches 6 to 6.5 percent. Its now 7.9 percent nationally, unchanged for January and December. The South Carolina December unemployment rate was 8.4 percent, 10.2 percent in York county, 11.6 in Lancaster County and 13.1 percent in Chester County.
Vitner predicted there could be a .5 percentage point rise in rates after the April, May and June sales season the time when most people with children look to relocate. The housing market should be strong enough by then to withstand a slightly higher rate, he said.
Even with all the uncertainty, York County real estate agents say they will gladly shoulder todays work load.
Cynthia Williams of Keller Williams Reality said shes already had one-fifth of last years sales in just the first two months of 2013, a time of year when sales are usually slow. Homes are selling in all price ranges, she said.
A couple of years ago you couldnt give away a home for more than $300,000, she said. I just wrote an offer for a $700,000 house, that would have not happened a year ago.
Don Worthington • 803-329-4066