Charleston SC Metro Real Estate: June 2010

A very small portion of the population are able to offer cash on a home they are interested in buying.  For the rest of us, we keep a close eye on mortgage rates so as to get the best deal.  Most people set a budget amount of "X" amount of dollars per month, and depending upon the mortgage rate that person will seek out a certain loan amount.   The better the interest rate the more you are able to borrow, which in turn usually means a bigger/better home for the buyer.  

For example, a person who has a monthly payment in mind of about $1050 per month could get a $195,000 loan at a 5% mortgage rate.  At a 7% interest rate that loan amount drops to a little more than $157,000, and at a 9% interest rate the loan amount free falls to just a tad more than $130,000.  Note - all stated examples include only principle and interest.  Taxes and insurance were not accounted for as there are variables for each. 

As you can see the interest rate matters a great deal.  Over the last 36 years interest rates have risen and fallen like a roller coaster at an amusement park.  The height of interest rates peaked in 1981 and 1982 at around 16%.  The highest month was in October of 1981 when interest rates climbed to nearly 18.5%.  This is staggering if you consider that a person who gets a $100,000 loan at 18.5% would have a principle and interest payment of over $1500 per month, but the same loan at 5% is just over $500 per month for principle and interest.

Now comes the good news. 

Our interest rates this year have been hovering around 5% and the last two months of May and June have actually been under 5%.  As stated before, buyers will get more for their money. Let not fear grip you in this time of opportunity.  Consult a reputable local lender and/or a local Realtor with any questions regarding you next home.  Don't be the one who looks back on this time ten years from now and wishes they would have made a sound investment in real estate.  The only thing we can be certain of in this volatile market is that eventually interest rates on home loans will rise!   

Other Recent Blogs:

"Our Dogs Won't Bite"

Charleston Real Estate Environmental Issues

Military Homeowners Assistance Program (HAP) Expanded

Excellent graph showing the sustained low mortgage rates this year.

This past weekend I met with a husband and wife who were out of town buyers.  Before we met I scheduled a hand full of homes that they stated were of interest to them.  When scheduling the homes I was informed by CSS that one of the houses had dogs that would be in the kitchen.  I thought to myself, "the dogs will be either enclosed in the kitchen or in a kennel in the kitchen.  No big deal."  

After looking at several of the homes we had scheduled, we arrived at the home with the dogs.  As we approached the house I heard the dogs barking.  I looked back at the buyers and tried to reassure them by saying, "not to worry...they are probably in a kennel.  I'll just poke my head in the door to make sure."  This did nothing to calm the wife who was deathly afraid of dogs.  She bolted back to the car. 

I opened the door to see one large and one medium size dog in the kitchen as promised.  But, the only thing keeping them there was an infant fence propped against the wall.  It wasn't even in put snugly in place!  It probably would not have mattered as both dogs seem to tower over the fence, staring at me and seemingly daring me to step inside. I could almost hear the giggling with anticipation.

We quickly decided not to go in.  I called the listing agent and left a her a message stating that we did not go in because of the dogs.  She later called me back and left me a message.  She apologized and stated that her clients said the dogs were gentle.  They told her, "Our Dogs Won't Bite."  I think the most amazing thing is that she agreed with the sellers enough as not to demand that they either remove the dogs or put them in a kennel. 

Most animals in a home make buyers nervous, but the worst are dogs.  Here is something to consider when it comes to dogs: 

1. Good dogs will rarly bite their owner (depending on the breed and circumstance).
2. Good dogs will usually not bite someone else if the owners are with them and are introduce to the new person.
3. When you are not around and a stranger is on the dog's perceived property, the dog, no matter how good or well behaved, becomes unpredictable.  Why?  Thier instinct to protect takes over!

Lesson Learned - A great strategy for all listing agents is to try to get the dog out of the house for a showing or at least kenneled.  And, never let the seller convince you that a dog will not bite a stranger entering the house alone.  In addition, buyers agents should never take chances with their clients around strange animals.  It just isn't worth the risk.

When buying and selling real estate in South Carolina, and more specifically the metro Charleston area, there are a few environmental issues you should be aware of that may affect the sale or purchase.  These items should not be overlooked and if applicable you should consult a Realtor and/or an attorney.

1. Asbestos - Asbestos is a naturally occurring rock that is ground up and used for a variety of purposes.  It is a known carcinogen and has been subject to state and federal regulation since 1986.  Legislation to address the handling, removal and disposal of asbestos and curb the dangerous health effects of exposure has been enacted on both levels.  Asbestos is most commonly found in buildings as part of building insulation, floor tiles, and some older electrical insulation.  Asbestos has not been used recently in housing because of the known dangers and liability, but may be found in older buildings. 

2. Radon - Radon is an odorless gas that cannot be seen, smelled, or tasted.  It is formed by the breakdown of Uranium and is radioactive.  Radon is heavier than air, so it concentrates in the lowest levels of buildings.  It can also be found in water as a dissolved gas, but that is much less common than being found in the air.  Although there is no recognized safe level of radon exposure, radon gas levels exceeding 4 pico-curios/liter are a general cause for concern and many relocation companies will not allow a purchase of such a home.  The picture to the right shows the greatest areas of concern for radon in South Carolina, but the EPA suggests that all homes be tested.

3.  Undergound Storage Tanks (USTs) - this is most often found on residential properties with vast amounts of land such as farms and ranches where they were used to store heating oil, fertilizers or other chemicals.  The existence of an underground storage tank must be disclosed so that potential purchases are aware of it and can have an inspection prior to purchase.

4.  Wetlands - this is one of the biggest environmental issues in the "low-country" due to the many low lying areas.  Wetlands are important because they act as a filter for groundwater.  Wetlands also act as a sponge that absorb rainwater and reduce the probability of flooding after heavy rains.  Wetlands are delineated by the US Army Corps of Engineers based on how many days/year the ground has standing water and the type of vegetation growing on the land.  Before buying or selling real estate one should verify that the property is not hindered by the classification of wetlands.

5.  Synthetic Stucco - technically known as Exterior Insulation Finishing Systems (EIFS), synthetic stucco is a process and material that has caused controversy and concern over the years.  This is due to the possibility of water becoming trapped between the exterior and interior walls, causing rot and decay.  A licensed contractor or inspector should be used to determine if the exterior is traditional stucco or synthetic stucco.

Wordless Wednesday - Nazi Germany Zeppelin

This is a popular picture for anyone who was stationed at Rhein Main Air Base in Frankfurt Germany.  Most people got a digital or paper copy of it. I was stationed there from 1997-2001.  Not sure who took the picture but it is dated to the late 1930's.  Nazi Germany used Rhein Main AB during the 1930's for their Zeppelin's (blimps).  The most famous of which was the Hindenburg which was later the album cover for Led Zeppelin's first album.

Other Blogs:

Liberty Hall Plantation, Goose Creek SC

The Elms Plantation

Goose Creek Real Estate

Crowfield Plantation Goose Creek SC

Charleston Real Estate Housing Appreciation Trend: A Case Study

What's So Great About Charleston SC?

I'ON in Mt. Pleasant SC

Good blog and valid points by Patricia Kennedy!

The Military Homeowners Assistance Program has been expanded to help members who have been ordered to Permanently Change Stations (PCS).  The military loves to abbreviate everything so the program is affectionately known as HAP.  I was in a class yesterday given by one of the directors at the Savannah HAP Field Office.  Here is the information he relayed to us.

HAP was initially designed in 1966 to provide monetary relief to service members (including Coast Guard) and federal employees who suffer financial loss on the sale of their home (primary residence) due to base closure or realignment.   In 2009 Congress passed the American Recovery & Reinvestment Act (ARRA) which expanded HAP to service members with permanent reassignment orders.  The following are the eligibility requirements:

Eligibility Requirements

1. Active Duty military personnel only.
2. PCS orders dated 1 Feb 2006 thru 30 Sep 2010 (subject to funds availability).
3. Must have purchased home prior to 1 Jul 2006, and sold home after 1 Jul 2006.
4. County and City home values must have declined at least 10%.
5. Individual home value must have declined at least 10%.
6. Members can only receive benefits from this program once.
7. Property is/was member's primary residence.
8. Member orders must move them at least 50 miles (duty station and home).
9. Member must have been in the military prior to purchasing the home.
10. Retiring personnel - only mandatory retirements eligible.

Note - HAP will not reimburse or pay-off second mortgages, including equity lines of credit, unless obtained when the home was purchased, or funds were used to improve the home.

Private Sale Reimbursement Calculations:

90% of original purchase price - sales price + closing costs (including Realtor fees).

Example:

• Purchase Price of $200K X 90% = $180K
• Applicant sells house for -          - $150K (mortgage paid at 150K)
  
•                                                    $30K
• Closing Costs (7% of sales price)   $10,500
• Total =   $40,500                                

On very rare occasions the government may employ the government acquisition program.  This occurs only after you were not able to sell your home within 120 days and it must be approved by military headquarters at the Army Corp of Engineers (HQUSACE) in Washington DC.  If approved the applicant may be eligible to receive the greater of 1) 75% of the purchase price, or 2) Mortgage payoff.

For more information visit the HAP Website, or contact Michael Johnson at 843-817-5299.

Other Blogs:

Charleston Air Force Base History

Liberty Hall Plantation, Goose Creek SC

The Elms Plantation

Goose Creek Real Estate

Crowfield Plantation Goose Creek SC

Wordless Wednesday - 16 Jun 2010

Photo taken at the beach at Isle of Palms SC.  Tourists and locals enjoying the sun and surf. 

Other Blogs:

Liberty Hall Plantation, Goose Creek SC

The Elms Plantation

Goose Creek Real Estate

Crowfield Plantation Goose Creek SC

Charleston Real Estate Housing Appreciation Trend: A Case Study

What's So Great About Charleston SC?

I'ON in Mt. Pleasant SC

Is this where Real Estate is going?  Would you use a Realtor with a kiosk at a grocery store?