Discussing the latest Case-Shiller Home Price Index, multifamily builders and developers remain positive, how to improve the economy, South Carolina is still growing, how to make buying a home easier, and higher corporate profits do not mean you will get a raise…
Case-Shiller Home Price Index Increases 6.5%
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.5% annual gain in March, the same as the previous month. The 10-City Composite annual increase came in at 6.5%, up from 6.4% in the previous month. The 20-City Composite posted a 6.8% year-over-year gain, no change from the previous month.
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices said:
The home price increases continue with the National Index rising at 6.5% per year. Looking across various national statistics on sales of new or existing homes, permits for new construction, and financing terms, two figures that stand out are rapidly rising home prices and low inventories of existing homes for sale.
Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s, before the housing boom and bust. Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising.
While this is a national report, what Blitzer said about home prices continuing to rise is very true in the Anderson SC area. As long as the economy is good and we don’t see some an incredible increase in the number of homes for sale, home prices will keep on rising in our area.
If we look at home prices in Anderson County SC during March 2018, we see that the median price was 1.04% higher than the median price in March 2017. But that is for ALL of the homes sold in Anderson County and may not tell you what is possible or realistic with a specific home.
For more up to date reports on Anderson County real estate, you can read the Market Reports.
Multifamily Builders and Developers Remain Positive
Confidence in the multifamily housing market remained positive in the first quarter of 2018, according to the Multifamily Production Index (MPI) and the Multifamily Vacancy Index (MVI) released today by the National Association of Home Builders (NAHB). The MPI remained unchanged from last quarter, coming in at a reading of 53, while the MVI remained essentially unchanged at 42.
Any number above 50 for the MPI means that more respondents report conditions are improving than report conditions are getting worse. Any number over 50 for the MVI indicates more property managers report more vacant apartments. A reading of 42 is seen as a healthy number for the multifamily market.
NAHB Chief Economist Robert Dietz said:
The stability of multifamily builder confidence is consistent with NAHB’s view that the market has reached a healthy, sustainable level of production. The overall strong economy is supporting demand and balancing supply-side issues many builders are facing, including shortages of labor and buildable lots, and the recent surge in lumber prices.
A win is a win despite the continuing supply side issues. Remember that the higher costs faced by builders will eventually be passed on to consumers.
Want to Improve the Economy? Improve the Schools
A key element of any successful economy, whether a nation or a state, is the quality of its workforce. The economic gains to each state from improving its schools are enormous and justify significant changes in state policies.
Education has long been thought of as an important component of any economic development strategy. Because of the central role of workers’ skills in local economies, people have always looked to schools to promote development. This attention is without doubt correctly placed, at least if proper attention is paid to quality issues.
Recent research highlights two dimensions to this discussion. First, there has been growing and correct appreciation of “high-quality” education. It is possible to push up graduation rates if there is no regard for graduates’ skills and achievements, but if workers’ skills are not appropriate for the modern economy, this solution will not be sufficient for economic development. Second, the relative quality of workers is an important element in explaining state income differences and determining future economic growth rates.
The cost to society is too high to neglect the education of young Americans. There is no doubt that it would take many years to see the results but for far too long our schools have been falling behind the rest of the world.
How to pay for improving our public schools is a tough question BUT how to pay for generations of poorly educated Americans is an even tougher question…
South Carolina’s Population Continues to Grow
South Carolina ranked No. 7 in 2017 for inbound relocations according to an annual study conducted by United Van Lines. Roughly 60% of the people moving to South Carolina were over 55 according to United so it could be we are seeing more people retiring here.
Michael Stoll, economist and professor in the Department of Public Policy at UCLA said:
This year’s data reflects longer-term trends of movement to the western and southern states, especially to those where housing costs are relatively lower, climates are more temperate and job growth has been at or above the national average, among other factors.
Sounds like Stoll is describing South Carolina perfectly!
Want to Make Buying Home Easier?
I have preached and preached about how important it is for anyone looking to buy a home to focus FIRST on the money BEFORE you start looking at homes. Home buyers MUST already know how much they can safely afford and understand how much they need for down payment and closing costs!
Last week, Fannie Mae released a study that said:
Buying a home and getting a mortgage for the first time is one of the largest financial decisions that a household will make during its lifetime. Prior research has shown that saving for a down payment and insufficient credit history are the biggest barriers to obtaining a mortgage for home purchase. Other research has found that consumers do not do much comparative mortgage shopping by getting multiple quotes.
Remember, you need to check your credit long before you apply for a mortgage so that you will have time to correct any errors or improve your credit score. This can save you thousands of dollars by helping you get a better mortgage rate!
Fannie points out that there are 3 phases of home buying: preparation, cycle of decisions and purchase. Home buyers must go through these steps to ensure that they get the best home at the best price and do not exceed their budget.
Fannie found that many of the home buyers in this study focused their energy on the home search instead of on the details of the mortgage. Fannie said that study participants consider the mortgage as a hurdle to overcome.
How a home buyer will pay for the home is not a hurdle but an important part of the home buying process. As Fannie said, buying a home is one of the biggest financial decisions you will make in your lifetime.
It is imperative that you check your credit and talk to several lenders of your choice to discuss your options. Being educated about mortgages and your credit can save you thousands of dollars!
Something else that can save you thousands of dollars when buying a home is having a Realtor as your Buyer’s Agent. But that is a discussion for another day…
Higher Corporate Profits Will Not Mean You Get a Raise
Very few Americans have enjoyed steadily rising pay beyond inflation over the last couple of decades, a shift from prior years in which the working and middle classes enjoyed broad-based wage gains as the economy expanded.
Now, executives of big U.S. companies suggest that the days of most people getting a pay raise are over, and that they also plan to reduce their work forces further.
This was rare, candid and bracing talk from executives atop corporate America, made at a conference Thursday at the Dallas Fed. The message is that Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.
Scary stuff but the shift towards automating more jobs means that we all must be prepared. Once most jobs are being done by robots, who will be making money to pay for the stuff the robots produce?
We cannot rely on our employers or the government to help us live the life we want. We must work hard and be smart about every penny we make or spend.
Well that is all for today! Please share this article if you enjoyed it and as always, if you have any questions about real estate in the Anderson SC area, Contact Me!