US Home Prices Rise Steadily in July, Lifted by Higher Sales

U.S. home prices rose at a solid pace in July, as would-be buyers competed for a diminished supply of available housing.

The Standard & Poor's/Case-Shiller 20-city home price index climbed 5 percent in July from a year earlier. That's up from a 4.9 percent annual pace in June.

Home prices rose in all 20 cities over the past 12 months. San Francisco posted the biggest gain of 10.4 percent, followed by Denver with 10.3 percent.

Steady job growth and an economic recovery in its seventh year have encouraged more Americans to buy homes. That lifted sales to an eight-year high in July. Yet those buyers have bid up prices in many areas because the number of homes for sale remains limited.

The current housing inventory is equal to 5.2 months of sales, below the six months that is typical in a balanced housing market.

Price gains were much smaller in many Eastern and Midwestern cities. Home prices were just 1.7 percent higher in Washington, D.C. compared with 12 months earlier, only 1.8 percent higher in Chicago, and up just 1.9 percent in New York.

Svenja Gudell, chief economist at real estate data firm Zillow, said the housing market is continuing to improve despite some conflicting trends. New home sales jumped to a seven-year high in August even as existing home sales slipped. Mortgage rates remain low, though it can be difficult for first-time buyers to qualify for a loan.

"The market is continuing to heal and find its footing in a new environment, one where highly local factors ... matter more than national trends," she said.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The July figures are the latest available.

Consistent price gains can make homeowners feel wealthier and more likely to spend, providing a boost to the economy. Higher home values also reduce the number of Americans who owe more on their mortgages than their homes are worth, a condition known as being "under water."

Still, housing faces several challenges in the coming months. Prices are rising at more than double the rate of wages, which have increased just 2.2 percent in the past 12 months. That is likely pricing many would-be buyers out of the market.

And while mortgage rates are still low, they could be headed up soon. Federal Reserve Chair Janet Yellen has indicated that the Fed may raise short-term rates for the first time in nine years before the end of the year. That would eventually push up mortgage rates.

Those trends may already be weighing on sales of existing homes. They slid nearly 5 percent in August from July's eight-year high to the lowest level since April, the National Association of Realtors said last week.

And fewer Americans signed contracts to buy homes in August. That suggests sales may slip further in the coming months. A signed contract typically precedes a completed sale by one or two months. Still, existing home sales are 6.2 percent higher than a year ago.

500 or More Houses Possible for Rural Site Near Blythewood

Some 500 houses could be allowed on a rural site near Blythewood. And while the developer and Richland County staff consider the potential subdivision to be an appropriate low-density development, some neighbors have concerns it will change the character of their community.

Drapac Group, a national and international real estate developer, hopes to develop homes on about 202 acres off Heins Road, west of its intersection with Langford Road and just east of Blythewood, near Richland County’s eastern edge.

Earlier this month, the Richland County Planning Commission recommended approval of a rezoning request that would allow the developer to build as many as 529 houses on lots of .45 acres or less. If that many homes were built, the subdivision could be one of the largest added in the area in recent years.

Attempts to reach Drapac officials for further details about the types of homes and how many they are planning were unsuccessful.

The rezoning request now moves to County Council for approval, with the first of three required votes to be taken Tuesday following a zoning public hearing.

The county’s land-use plan and desired development pattern for this area call for lower-density, single-family neighborhoods to act as a transitional area from rural to more medium-density development patterns. This proposed development would fit into the county’s plans for the area, county zoning administrator Geonard Price said.

But neighbors say that’s too dense.

At the Sept. 8 Planning Commission meeting, commissioners voted 6-3 to recommend that County Council approve the rezoning request, after hearing from some neighbors. Among their concerns:

▪ Potential light pollution from streetlights in the planned subdivision

▪ Effects on property values for larger parcel homeowners

▪ Traffic congestion locally and in Blythewood near the interstate

▪ The possibility of this large development being used to justify other large developments nearby.

Tod Little and his wife, Adele, live on seven acres across Heins Road from the proposed subdivision site.

The Littles have seen significant growth in the northeast corner of the county since moving from Lexington about seven years ago to escape traffic and congestion there, Tod Little said.

“(We) just wanted to have a little extra space and not feel like you’re on top of everybody,” he said. “I understand growth, and I understand all that, but I would like to think they would keep it more of a rural feel.”

Little said he’d like to see the developer build houses on larger lots, perhaps one acre or larger, and keep the houses shielded from view along Heins Road. He also worries, he said, that increased residential development could lead to more nearby commercial development.

Little did not attend the Planning Commission meeting but plans to speak at Tuesday’s zoning public hearing, he said.

Councilwoman Joyce Dickerson, who represents the district where the development would be located, said she needs more details about the project and more time to discuss it with the developers and the community. She said she hopes to defer the council’s first-reading vote until after a meeting can be had with the developer and interested community members.

“I know I’m not going to approve no 500 houses, I can tell you that right now,” Dickerson said. “This is really, really rural in that area. I would really have to look at this really, really closely. And I think the community needs to have the opportunity to have input as to the number of homes.”

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