Charleston’s Real Estate Market Demise. The Silver Lining.
Brayden Capital would like you to know that, once again, Chicken Little is dead wrong and the reports of our country’s (and Charleston’s) demise are greatly exaggerated. Here are the positives that don’t get enough coverage:
The mortgage industry has seen a bloodletting the likes of which have not been seen in this country since 1929. The ranks of the employed in this industry have been paired down to record lows. Who are the folks left standing and what does this mean to you, the borrower? The lenders left standing now are the cream of the crop. They are the ones who stayed away from the untruthful loans of the last five years. They are highly educated: this will give real expertise. They are experienced: only those lenders who were around before the housing demise are here today and this means that they will lend you more than money, they will lend you perspective. They are motivated: there is an excellent environment out there to make sure that all borrowers are carefully advised and directed.
The Federal Housing Authority (FHA) which underwrites and insures many residential real estate loans these days is improving its loan originations. This is due in large part to the return of sanity to loan underwriting guidelines. With the increase in credit score requirements default rates are down. FHA is making inroads into high-end real estate and this is stabilizing that vital market. With an increase in their funding coming from the fee they charge to guarantee the loans they back, the FHA will have more capital to sustain itself through the defaults they will have to cure.
A record low in interest rates combined with relaxed housing prices make this an ideal time for qualified borrowers to borrow.
Commercial property owners are rezoning unsuitable properties to make them viable once again. L. Mendel Rivers Federal Building in North Charleston is a great example. The new owners plan to renovate and open the site as a hotel, bringing jobs along with a viable presence for the building.
Boeing. Boeing. Boeing. The Dreamliner plant in North Charleston will employ 6,000 people, all of whom will need to sleep, eat, and relax somewhere in the tri-county area.
Charleston remains a top-tier location to live and vacation. The fact is that people from the upper Midwest are not going to stop moving here anytime soon. It’s a great place to live! Eventually, demand will outpace supply and the real estate market will rise from its sickbed.
So next time Chicken Little tells you that the sky is falling just shrug it off and count your lucky stars that he’s only singing the same tired tune. It happens to be a song that the low country’s economy is not quite ready to dance to.
Robert Weaver is a mortgage loan officer with Brayden Capital. You can read more about his services by clicking here.