While still recovering from the recession, the Deep South state of South Carolina has plenty to offer current and new residents. The information below gives insights into the South Carolina real estate conditions, which can then be used to obtain the best mortgage rates. This summary depicts how South Carolina is performing in comparison to the rest of the United States, where most residents are choosing to live, and how the South Carolina mortgage rates, mortgage types, and foreclosure laws impact home ownership.
Comparing South Carolina Real Estate Prices
A key indicator of how well South Carolina is performing economically is real estate prices. The state’s low home prices, slow sales, and high jobless rate contribute to the lack of confidence and income to move into a new home. These conditions impact South Carolina mortgage rates, as lenders adjust their rates to compensate for the risky market.
While portions of the state are experiencing decreased foreclosure rates and improving home sales, much of South Carolina is headed for a slow recovery. To determine whether South Carolina’s condition is typical for the times, the state’s real estate market must be compared to nearby states and the United States as a whole. The following information places South Carolina’s circumstances into context.
South Carolina Compared to Its Neighbors
South Carolina and all of its nearby states have experienced a decrease in median home prices over the last year. Between November 2009 and November 2010, South Carolina’s median home price dropped 7.5%. All other states in the region faired better. Details about regional list prices, as supplied by zillow.com, are listed below:
- South Carolina – Median list price: $174,900, Change: -7.5%
- North Carolina – Median list price: $195,000, Change: -2.3%
- Georgia – Median list price: $165,000, Change: -2.9%
- Virginia – Median list price: $237,700, Change: -1.0%
- Florida – Median list price: $179,000, Change: -5.8%
South Carolina Compared to the United States As a Whole
South Carolina’s housing market is sluggish compared to the United States as a whole. While the U.S. median home price decreased only 2.2% from 2009 to 2010, South Carolina’s rate declined 7.5% for the same period. In addition, the median list price for an American home is $195,500, which is $20,000 higher than what a similar home would be listed at in South Carolina. The low prices can provide an opportunity for homebuyers who want to purchase within the state and have time to wait on appreciation. Realtors expect home prices to improve as the U.S. economy strengthens and South Carolina adds more jobs.
Most Popular and Fastest Growing Cities
South Carolina ranks as one of the fastest growing states in the nation. The rapid growth has been attributed to its low tax rates, warm climate, and lower cost of living. Home to 613,000 residents, South Carolina benefits from the high population concentration in Columbia and the quick expansion of Fort Mill.
Columbia, South Carolina
Columbia is both the capital of South Carolina and the state’s largest city. Nearly 139,000 people live in Columbia, which amounts to about one fifth of South Carolina’s population. Columbia is home to the University of South Carolina, the Palmetto Health hospital system, and Fort Jackson, the U.S. Army’s largest training post. Forbes, BusinessWeek, and Bizjournals have all recognized the strength of Columbia’s economy. While home prices in Columbia have fallen from a high of $188,000 at the end of 2008 to a current median list price of $149,900, the city still represents the highest values in the county. The decline in home prices is near South Carolina’s overall decline, but the state still lags 5% behind the national average.
Fort Mill, South Carolina
Fort Mill is South Carolina’s fastest growing city. The population has almost doubled since 2000, thanks to an influx of employers like Continental Tire, Muzak, and financial firms. The area has also benefited from its proximity to Charlotte, North Carolina and its selection as a best place to live by Money Magazine and a best place to retire by U.S. News. The town is currently home to about 11,000 residents. The median home price of $137,900 sits above the South Carolina median but below the U.S. median.
Mortgage Rates and Mortgage Types
Mortgages can improve home ownership rates because they allow South Carolina homebuyers to purchase a home without first saving the full sale price. The state permits several types of mortgages, which affect South Carolina mortgage rates that must be paid. The list below includes the common loan types available to South Carolina buyers:
- Fixed rate loans – Interest rates and payment amounts are steady across a set period, usually 15 or 30 years.
- Adjustable rate mortgages (ARMs) – The initial interest rate is generally lower than the rate of a similar fixed loan. The rate may change after a specified period, such as 1, 3, or 5 years. That rate is then locked in until the next rate reset period.
- FHA loans – The Federal Housing Administration can insure qualified loans for borrowers with less than a 20% down payment. The mortgage insurance cost is added to the loan.
- Jumbo loans – Jumbo loans are created for non-conforming loans that are larger than the Fannie Mae and Freddie Mac limits. Due to the large size and greater risk of default, they typically have higher interest rates.
- Second mortgages – A second mortgage is an additional, junior-position mortgage on top of the existing mortgage.
- Reverse mortgages – Popular with the elderly, reverse mortgages are used to convert a portion of home equity into cash. The borrower’s age, the home’s appraised value, and the current interest rate all affect the maximum loan amount. The loan must be repaid when the borrower dies, sells the home, or vacates the home.
- Refinance loans – Borrowers can take out a new loan (refinance) to pay off an existing loan, consolidate debt, or lower monthly payments. Many borrowers refinance to obtain lower interest rates.
- Home equity loans – This loan is based on the amount of equity in a home. Repayment does not begin until the line of credit is drawn upon.
South Carolina Mortgage Rates
Mortgage rates in South Carolina are currently higher than the national average, which is likely due to the high number of foreclosures still occurring in the state. A 30-year fixed mortgage, a 15-year fixed mortgage, or a 5-year ARM will cost 2 to 8 basis points more than the same mortgage in other parts of the U.S.
First-time homebuyers with a low-to-moderate income in South Carolina may receive assistance from the South Carolina State Housing Finance and Development Authority. The organization offers fixed rate mortgages and down payment assistance based on available funding.
South Carolina Mortgage Types
Like most U.S. states, South Carolina uses a mortgage to place a lien on a home until the home loan is paid in full.
South Carolina is a recourse state. In the event that a property is foreclosed upon, the lender is still eligible to obtain full repayment of the underlying home loan. The property goes to a public sale and, if the proceeds are not enough to pay off the loan, the lender may apply for a deficiency judgment against the borrower for the difference.
South Carolina Foreclosure Process
South Carolina’s foreclosure rate is much higher than the national average. Back in 2008, only 1 in 5,155 South Carolina households were facing foreclosure instead of 1 in 775 householders across the country. As of May 2010, that number has shot up to 1 in 506 households for the state versus 1 in 400 for the nation. The increase in foreclosures is due not only to the overall economy but also to the departure of numerous employers from the state.
No matter the terms of the mortgage, all foreclosures in South Carolina must go through a judicial foreclosure process.
Judicial Foreclosure Process
Before a foreclosure can begin, lenders must file a complaint against the borrower in the South Carolina county where the property is held and then obtain a decree of sale from that court. This method of foreclosure is known as a judicial foreclosure process, as opposed to a non-judicial process, which does not need to go through the court system. The steps of a South Carolina foreclosure are listed below.
1. If the court reviews the foreclosure complaint and finds that the borrower is in default, the borrower has a set time period to cure the deficiency by repaying the amount due. If the borrower fails to pay by the deadline, the court will order the property to be sold.
2. The lender must publish a notice of sale for at least three consecutive weeks prior to the sale date. This notice must appear at the county courthouse and at least two other public places. It must also be published in a newspaper in the county where the property is held. The following details must be listed in the notice of sale:
- borrower’s name
- lender’s name
- property description
- the time and place of sale
3. The property sale must take place on the first Monday of the month or on the first Tuesday if the Monday is a holiday. The county sheriff conducts the sale between 11:00 am and 5:00 pm, unless otherwise ordered by the court. The sheriff may end bidding before 5:00 pm.
4. The public sale is not the final opportunity to bid on a foreclosed property. South Carolina uses upset bidding, which means the auction stays open for an additional thirty days after the public sale and anyone may bid a higher amount. The winner and successful purchaser is the person or entity who has placed the highest bid at the end of the auction period. Other bidders give up interest in the property and are refunded any deposits made in good faith.
5. The sheriff’s office will accept objections to the sale price for an additional three months. Otherwise, the sheriff will confirm the sale and make any necessary deed endorsements.
6. Borrowers in South Carolina have no right of redemption. The time period between the filing of the foreclosure complaint and the property sale order is the only time in which a borrower may pay what he/she owes and redeem the property.