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Lack of inventory leads to new home construction

Real Estate - Residential
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It truly is a seller’s market when it comes to homes according to South Carolina Realtors. In a recent report, the trade group said there is anecdotal evidence that indicates its becoming tougher to find a home to buy.

“With a huge amount of demand for a limited set of properties, competition is becoming the biggest obstacle,” the report said.

“Lexington County is so attractive, people continue to come into the area, but Columbia seems to have a little more inventory,” said Mike Anderson of Experienced Real Estate Group. “Homes from $150,000- $400,000, buyers are just competing over.”

A tight supply of existing single-family units has prompted some buyers to build, particularly those who are acquiring their first home. (Photo/Chuck Crumbo)From March 2016 to February 2017, pending sales of homes in the state rose 5% overall. Single-family homes had the largest price gain increasing 5% to $192,000. The overall median sales price was up 4.9%.

“New homes sales are strong right now, much better than they were five years ago,” said Matt Mungo, vice president of Mungo Homes. “Demand for both new homes and re-sales are strong, and price for both usually climb at the same pace.”

Anderson said a re-sale that is in good condition and move-in ready is just as attractive to a home buyer as a newer home.
In April’s Realtors’ report, the average number of days on market until sale was 67 in the greater Columbia area. That’s down 23% from April 2016. The average dropped 10.5% in the first quarter of 2017 compared to 2016, and was down 14% per year to date. 

Despite the lack of days homes are on the market, home sales have continued to increase in the Columbia area. There was a 1.8% increase in the number of homes sold (1,032) compared with April 2016 (1,014), but an almost 10% increase in first quarter numbers (2,658) compared with 2016 (2,426). Year to date, the increase in sales was up 7.3% (3,690) compared with 2016 (3,440).

“With a less amount of re-sales, there is definitely pressure to have new homes built,” Mungo said. 

Mungo said this time of year is a slower period for builders, with fewer permits being pulled. He said it should start to ramp up again toward the end of the summer and into September. 

“We want to have a finished inventory ready to go for the selling season in January,” Mungo said. “People like to have something tangible.”

According to Mungo, the number one factor buyers are looking for is good schools. That’s one of the main reasons for the number of new neighborhoods being built in the Lexington and Chapin areas. 

“Living near good schools raises property values,” Mungo said. “Lower Richland and Southeast Columbia are not strong right now, most of the Columbia area is moving towards Flora (High School).”

Anderson said builders such as Mungo along with D.R. Horton and Essex are continuing to buy up land, and every house they are building is getting sold. He credited the influx to new manufacturing jobs moving to the area. 
 

 

Reach Travis Boland at 803-726-7543.

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