SUMMER 2009 EDITION
COMMUNITY»
Less expensive housing
COLUMBIA — There is a housing crisis going on in the United States. But you wouldn’t know it from last week's realty tournament at L.A. Nickell Golf Course. Carol Van Gorp, CEO of the Columbia Board of Realtors, lounged on a shaded picnic bench, smiling while real estate agents from around Columbia worked on their golf swings.
It is a rare sight; those in the housing industry have little to smile about these days.
Columbia’s housing market is by no means flourishing, though it hasn’t been hit as hard as regions in California, Arizona and Florida. Van Gorp attributes the relative stability of Columbia’s housing industry to the type of home buyers here.
“Columbia is primarily a market for families, while coastal regions had a lot of people buying a vacation home,” Van Gorp said. “When things went bad, people started selling their second homes in those regions.”
That doesn’t mean that Columbia’s housing market hasn’t faced any hardships. Prudential real estate agent Jim Matteson said both home sales and prices have fallen, and Steven Smith, president of the market for Columbia Premier Bank, said mortgage loan “activity slowed quite a bit over the last part of last year.”
Although home sales have diminished overall, a combination of events makes this recession an ideal time to sell or buy a less expensive home.
Denver and Courtney Lybarger took advantage of the financial circumstances and recently bought their first home.
Courtney Lybarger wouldn’t give a specific price but said the house was between $120,000 and $134,000.
"We're ecstatic. We love it," she said. "We made the right decision."
But the Lybargers weren't always so sure.
"We were a little nervous at first," she said. "Deciding what house to put an offer on was probably most nerve-racking."
The Lybargers are just two of a growing number of first-time home buyers who are buying less expensive houses.
Van Gorp said houses priced under $175,000 have been selling relatively well, and sales of these houses may have even increased. In the years before the current housing crisis, houses priced between $175,000 and $200,000 were best-sellers, but lately, people have been looking for prices below $130,000, Matteson said.
Meanwhile, sales of more luxurious homes are declining. And the less expensive home sales are being kept afloat by first-time home buyers, such as the Lybargers.
The housing crisis has made these first-time buyers more conservative when taking out mortgage loans. Lybarger said that although she and her husband usually play it safe, hearing of people losing their homes made them even more cautious when it came to buying their own house.
“We just kind of decided that we were going to do it,” she said. “We are pretty conservative anyway, and we are not the kind of people that have to live beyond our means. We don't want to outdo ourselves.”
Banks also became stricter with their mortgage loan policies after the collapse of the housing market, Matteson said.
“Basically, you cannot borrow more money than you can afford (to pay back)," Matteson said. "They (banks) are verifying your records, your other obligations, your qualifications.”
New federal programs under the American Recovery and Reinvestment Act add to the appeal of buying a less expensive house. An $8,000 refundable credit for first-time home buyers makes up a much larger percentage of the payment for a $130,000 than a $200,000 house. Lybarger said the tax credit was a key reason she and her husband bought a house when they did.
"We had been looking for a while,” she said. “We finally got all our finances aligned, but the stimulus package definitely sped up the process."
Maybe Van Gorp has good reason to smile.