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Old 10-14-2018, 06:13 AM
 
Location: James Island, SC
2,956 posts, read 2,637,987 times
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Quote:
Originally Posted by thaifood View Post
Cool. So with 30 year interest rates around 4.8% is there a rate where you would expect a significant downturn in buyers?

There's not a certain number that turns away buyers, it's a matter of affordability. Someone who can afford the payment on a $300k mortgage at 4.25% can only afford a $240k mortgage at 6.25%. As the rate goes higher, there's just less buyers who can afford to buy. It's like watching two sides of a scale... as one side rises, the other falls. As pointed out, the rates are still traditionally low but that might not mean much to the millennial who is used to the sub 4% rates we've had for several years.

Charleston has been blessed/cursed (depending on your perspective) with an influx of retirees with a lifetime of savings and folks with higher incomes who can afford to pay more for a property. This has made it tough for the long term residents who have been stuck with the lower than average wages offered here. Thus the affordability issues we hear so much about. The added population has also pushed rents up to a premium which puts those average income earners at another disadvantage with so much of their income going out to housing. Watching interest rates rise must be like watching the ship they were hoping to get on sail farther away without them.

The market forces should self correct this eventually, but it takes years.
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Old 10-14-2018, 07:28 AM
Status: "It takes a lot of balls to golf like me" (set 7 days ago)
 
Location: Charleston, SC
3,920 posts, read 3,183,953 times
Reputation: 3381
Quote:
Originally Posted by LocalHero View Post
There's not a certain number that turns away buyers, it's a matter of affordability. Someone who can afford the payment on a $300k mortgage at 4.25% can only afford a $240k mortgage at 6.25%. As the rate goes higher, there's just less buyers who can afford to buy. It's like watching two sides of a scale... as one side rises, the other falls. As pointed out, the rates are still traditionally low but that might not mean much to the millennial who is used to the sub 4% rates we've had for several years.

Charleston has been blessed/cursed (depending on your perspective) with an influx of retirees with a lifetime of savings and folks with higher incomes who can afford to pay more for a property. This has made it tough for the long term residents who have been stuck with the lower than average wages offered here. Thus the affordability issues we hear so much about. The added population has also pushed rents up to a premium which puts those average income earners at another disadvantage with so much of their income going out to housing. Watching interest rates rise must be like watching the ship they were hoping to get on sail farther away without them.

The market forces should self correct this eventually, but it takes years.
I almost consider it a population shift. Locals living here on locals wages, doing locals living, are being replaced with a different kind of population. Folks with higher wage earning (tech sector etc) and those who are fed up with where they live but have equity and spending power and don't need to work. This is true of most of the SE United States as property values in other coastal cities have been higher than ours for a while, the governments of those areas have been steadily raising taxes to fund all kinds of things for years. Now it's too the point where those communities have had enough of the taxation and have decided to cash out their property values and put it into an area where they can start building their wealth again.

Until recently, we never saw folks moving here from San Francisco, Washington, Oregon etc. Now it's a good portion of my business every year. A 3 br home built in the 1940's in San Fran costs 1.2 million and gets taxed on everything, where they can move into the same home in Avondale for what they paid in taxes on the 1.2 million home out there.

Economically it makes a lot of sense to a lot of the coastal areas of the US to move here. Middle America is still a much better deal real estate/tax value wise that Charleston, but everyone wants to live near the ocean currently.
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Old 10-14-2018, 07:31 AM
 
1,579 posts, read 937,931 times
Reputation: 541
Quote:
Originally Posted by LocalHero View Post
There's not a certain number that turns away buyers, it's a matter of affordability. Someone who can afford the payment on a $300k mortgage at 4.25% can only afford a $240k mortgage at 6.25%. As the rate goes higher, there's just less buyers who can afford to buy. It's like watching two sides of a scale... as one side rises, the other falls. As pointed out, the rates are still traditionally low but that might not mean much to the millennial who is used to the sub 4% rates we've had for several years.

Charleston has been blessed/cursed (depending on your perspective) with an influx of retirees with a lifetime of savings and folks with higher incomes who can afford to pay more for a property. This has made it tough for the long term residents who have been stuck with the lower than average wages offered here. Thus the affordability issues we hear so much about. The added population has also pushed rents up to a premium which puts those average income earners at another disadvantage with so much of their income going out to housing. Watching interest rates rise must be like watching the ship they were hoping to get on sail farther away without them.

The market forces should self correct this eventually, but it takes years.
With apartments, last time I looked they were all connected and base prices off of availability of surrounding apartments. It was all done automatically by computers. They are alot of apartments coming online soon so prices should drop with that unless that many people are still moving in and getting those empty apartments spots
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Old 10-14-2018, 07:32 AM
 
1,084 posts, read 530,294 times
Reputation: 820
Quote:
Originally Posted by WiseManOnceSaid View Post
I almost consider it a population shift. Locals living here on locals wages, doing locals living, are being replaced with a different kind of population. Folks with higher wage earning (tech sector etc) and those who are fed up with where they live but have equity and spending power and don't need to work. This is true of most of the SE United States as property values in other coastal cities have been higher than ours for a while, the governments of those areas have been steadily raising taxes to fund all kinds of things for years. Now it's too the point where those communities have had enough of the taxation and have decided to cash out their property values and put it into an area where they can start building their wealth again.

Until recently, we never saw folks moving here from San Francisco, Washington, Oregon etc. Now it's a good portion of my business every year. A 3 br home built in the 1940's in San Fran costs 1.2 million and gets taxed on everything, where they can move into the same home in Avondale for what they paid in taxes on the 1.2 million home out there.

Economically it makes a lot of sense to a lot of the coastal areas of the US to move here. Middle America is still a much better deal real estate/tax value wise that Charleston, but everyone wants to live near the ocean currently.
Yes someone moving from San Francisco to Charleston would be like someone moving from Charleston to the Dominican Republic. You can afford a lot
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Old 10-14-2018, 09:51 AM
 
6,899 posts, read 2,558,031 times
Reputation: 4691
Quote:
Originally Posted by WiseManOnceSaid View Post
I almost consider it a population shift. Locals living here on locals wages, doing locals living, are being replaced with a different kind of population. Folks with higher wage earning (tech sector etc) and those who are fed up with where they live but have equity and spending power and don't need to work. This is true of most of the SE United States as property values in other coastal cities have been higher than ours for a while, the governments of those areas have been steadily raising taxes to fund all kinds of things for years. Now it's too the point where those communities have had enough of the taxation and have decided to cash out their property values and put it into an area where they can start building their wealth again.

Until recently, we never saw folks moving here from San Francisco, Washington, Oregon etc. Now it's a good portion of my business every year. A 3 br home built in the 1940's in San Fran costs 1.2 million and gets taxed on everything, where they can move into the same home in Avondale for what they paid in taxes on the 1.2 million home out there.

Economically it makes a lot of sense to a lot of the coastal areas of the US to move here. Middle America is still a much better deal real estate/tax value wise that Charleston, but everyone wants to live near the ocean currently.
So you’re saying the people who are most likely to believe the sea level is eventually going to rise and swallow everything in the near future insist on living near the ocean anyway?
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Old 10-14-2018, 09:55 AM
 
6,899 posts, read 2,558,031 times
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Quote:
Originally Posted by thaifood View Post
Yes someone moving from San Francisco to Charleston would be like someone moving from Charleston to the Dominican Republic. You can afford a lot
Sorta. Depends on if they still get San Fransisco wages. If they’re renting in San Fransisco they’re coming here with no equity and starting from scratch.
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Old 10-14-2018, 10:53 AM
Status: "It takes a lot of balls to golf like me" (set 7 days ago)
 
Location: Charleston, SC
3,920 posts, read 3,183,953 times
Reputation: 3381
Quote:
Originally Posted by Ziggy100 View Post
So you’re saying the people who are most likely to believe the sea level is eventually going to rise and swallow everything in the near future insist on living near the ocean anyway?
Do as I say not as I do...
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Old 10-14-2018, 12:27 PM
 
1,084 posts, read 530,294 times
Reputation: 820
Quote:
Originally Posted by WiseManOnceSaid View Post
Do as I say not as I do...
It's not an all or nothing proposition. You can believe in global warming and still live on the coast but not right on the water and expect to live many decades above sea level while expecting those in the first quarter mile or more to go underwater over time
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Old 10-14-2018, 02:15 PM
 
6,899 posts, read 2,558,031 times
Reputation: 4691
Quote:
Originally Posted by thaifood View Post
It's not an all or nothing proposition. You can believe in global warming and still live on the coast but not right on the water and expect to live many decades above sea level while expecting those in the first quarter mile or more to go underwater over time
The property values of houses right on the water don’t seem to reflect that same concern.
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Old 10-14-2018, 02:33 PM
 
1,084 posts, read 530,294 times
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Quote:
Originally Posted by Ziggy100 View Post
The property values of houses right on the water don’t seem to reflect that same concern.
Many of those people consider their houses disposable. This is like the 5th house that they go to when the other four houses are being cleaned. Also a lot of people have no clue about global warming and think that the property will never be underwater and to be fair it will probably be decades but it is encroaching and it is real. I know because I went to Trump University
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