Columbia was among the more affordable of U.S. cities for housing in a new study even as some working in real estate said potential buyers need to be ready to open their checkbooks fast to get entry-level houses in the Midlands.
The median Columbia monthly home payment of $861 is rated as more affordable than Charleston, at $1,451, according to the study of housing costs in cities across the country.
The study was released by Unison, a San Francisco-based company that helps buyers tap into capital from investors for their home purchase. It compared median housing costs with median pay in cities across the country to assess barriers for those looking to save up for a down payment on a home.
Unison's study also found a median monthly payment of $761 in North Charleston.
Unison estimated an average household in Columbia would need 16 years to save enough money for a 20 percent down payment based on the median home price and local incomes. That's better than the majority of the 30 cities included in the study, many with much higher property costs.
For Charleston the estimate is 18 years of saving with the city's higher incomes somewhat offsetting higher costs. In North Charleston, the estimate was 14 years.
And in Washington, D.C.? It would take 28 years of savings, according to the study.
For those buying entry-level homes in Columbia, the only way to succeed is to be ready to pounce immediately with a strong offer, said J.T. Livingston, a real estate agent with Keller Williams Realty. Most properties with an appropriate price in the range of $175,000 or less will have a contract within 24 to 48 hours, Livingston said.
"They have gone very, very quickly," he said.
Buyers wishing to win the race for a desirable property are likely to lose out if their bid is contingent on selling their current home, Livingston said. Appealing homes in the price range are attracting numerous bids, allowing sellers to pick the offer with the fewest strings attached.
In one recent deal Livingston assisted, the winning bid went above the asking price of about $125,000 without any finance or home inspection contingencies. This clean bid was accepted from among more than 20 offers, Livingston said.
Despite this high demand, it's difficult for homebuilders to add much more new property at lower price points below $175,000, according to Steven Mungo, CEO of Mungo Homes.
Just the cost of getting land in a desirable area has pushed prices up considerably, Mungo said. Mungo called the set-back requirements to protect small streams and small waterways a particular issue. The federal rules are stringent, Mungo said, and some municipalities are going above and beyond that.
Companies are losing sizable parts of their development space to mitigate possible waterway pollution and having to do more to protect waterways from being tainted by runoff during construction, Mungo said. That work adds to baseline costs.
"You're moving lots and lots of dirt to not lose lots from your plan," Mungo said.
Mungo sees a different challenge — in addition to cost — facing numerous potential first-time home buyers: accumulated college tuition and credit-card debt. Mungo Homes often has to try to find ways to help those who want to move from renting to home ownership but already have some accumulated debt to deal with. "It will hurt their ability to be homeowners," Mungo said.
The median value of a home in South Carolina rose by 7.3 percent between 2017 and 2018, according to the Unison study. Median household incomes didn't quite keep pace, rising 5.8 percent in the same time period.
Mungo worries that prices are rising so quickly that more first-time and lower-income buyers will find they cannot afford what is available. "That's not a sustainable rate," he said.