By NOELLE PHILLIPS
Staff writer
thestate.com

At 29, Kurt Huffstetler has grown weary of paying rent and losing deposits when he moves.

It’s time, he said, to buy a house.

He has a $95,000 bid on a Maryland Street house. If Friday’s home inspection went as planned, it will soon be his.

“It makes more sense to save money and put my money into something where I’ll get it back,” Huffstetler said.

First-time home buyers like Huffstetler are helping push the Columbia area’s housing market toward another year of record sales.

Despite a slight dip in May, Columbia-area home sales during the first five months of this year rose by 7 percent from the same time period in 2003.

Columbia-area real estate agents report low interest rates and overall growth in the area are driving the trend. They say it keeps a steady pace despite interest rates that are slowly creeping up.

State and national Realtor associations this week released reports on home buying that show:

• In Columbia: 4,284 residential homes sold between January and May, up 7.5 percent from the same time a year ago.

• In South Carolina: 21,813 homes sold during the first five months of 2004, up 20 percent from the same period of 2003.

• In the United States: Sales of existing homes hit a record 6.8 million units, a 2.6 percent increase over the previous month. And new-home sales jumped 14.8 percent last month after a drop in April.

Jim Peters, chief executive officer of the South Carolina Association of Realtors, said the state continues to be a hot real estate market.

In Columbia, the median price of homes sold dropped in May, to $99,000. But Peters said that was because of the large number of first-time home buyers, who typically buy in the $100,000-to- $150,000 range.

“These are the people who are coming into the market place and coming in substantial numbers,” Peters said.

INVESTING AGAIN

People in the real estate business also say the improving economy means more people are again buying second or vacation homes. That business had been slow during 2002 and into the early part of last year.

Some of the business comes from out-of-state retirees or from people ready to buy a vacation home.

“Instead of putting their money in stocks, they’re looking to put money in condominiums or houses on the beach,” Peters said.

And new home construction continues to grow like gangbusters, Peters said.

Tom Markovich, president of the S.C. Homebuilders Association, said the new construction market has held steady at 1 percent during the past few years.

If the rate of new home construction grows much faster, infrastructure such as sewer lines, water supply and roads won’t be able to keep up, he said.

In April 2004, 1,858 permits for new, single-family home construction were issued in Richland, Lexington and Kershaw counties. That’s a record for the last four years, according to the Homebuilders Association of Greater Columbia.

“There’s no slowdown that we can see,” said Earl McLeod, the association’s executive director. “A lot of renters have become homeowners because of the interest rates.”

Jennifer McBroom, the real estate agent who helped Huffstetler find his first house, said about 70 percent of her clients are first-time buyers. They are mostly young professionals who want to live in town.

Although mortgage interest rates have increased since last summer, McBroom doesn’t think the climb will cause a drop in home sales.

“People have become spoiled with low interest rates over the last several years,” she said. “Of course, that was with a price because unemployment was up and the economy was down.”

As the economy improves, the federal government will raise interest rates. The Federal Reserve Board meets Tuesday and Wednesday to discuss interest rates, and home loan rates have risen in anticipation of that move.

Last summer, Kristie Sanderson, sales manager for Chase Manhattan Mortgage Corp., was offering 30-year fixed loans with a 4.9 percent interest rate.

“That was a 43-year low,” she said.

Right now, the interest rate on the same loan is about 6.25 percent — still a good rate by historical standards, she said.

The Associated Press contributed to this story. Reach Phillips at (803) 771-8307 or at nophillips@thestate.com.

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