Mortgage insurers and declining housing markets
The good news for the Charleston real estate market is that Charleston is not considered a declining market according to the mortgage insurers. A lot of the country is as mortgage insurers attempt to reduce risk.
A big change is that borrowers can no longer avoid mortgage insurance by taking out the piggyback loan which has virtually disappeared. The good news is that mortgage insurance is finally tax deductible, likely a big reason for trying to get around it in past years. But make no mistake, today's mortgage market requires a down payment, mortgage insurance when the down payment is less than 20%, good credit and documentation.
While Charleston is not currently rated a declining market, we still face headwinds from very high inventory levels and fewer sales. As I've mentioned on many occasions, high supply and less demand pressures prices. But as I notice the areas on the chart, of course there are the usual suspects, California, Florida, Arizona and Nevada along with the economically troubled Midwest. But a lot of large metropolitan areas seem to be designated including the very populated Northeast corridor and I can't help but wonder if the mortgage insurers are painting with too broad a brush by not digging down and analyzing how home prices are doing in specific areas such as zip codes. Here in Charleston as an example, home prices are performing somewhat differently in Mount Pleasant and Daniel Island than Summerville and Goose Creek.
Here is a very helpful map from the WSJOnline showing declining housing markets.
