Columbia is ranked among the top ten housing markets for 2020. Coming in at fifth place, the market forecast is for prices to ever-so-slightly decline while sales volumes rise.
The Columbia metro area sees strong demand for rental property from a variety of tenant types, including the military, students, and retirees. In fact, more than 50% of the households in Columbia are occupied by renters.
Columbia is the capital of South Carolina and the state’s second-largest city. Located in the central part of the state, the city is home to the University of South Carolina and Fort Jackson – the largest U.S. Army base for basic combat training.
In addition to education and the military, the diversified economy and job market in Columbia are driven by the healthcare, technology, transportation and logistics, manufacturing, and financial services sectors.
Keep reading to learn why the strong demand for rental property is helping to make real estate in Columbia a smart investment in 2020.
The Columbia MSA has been one of the fastest growing metro areas in the Southeast, with the population growing by 19% since 1990.
Employers are attracted by the region’s well educated workforce and low cost of doing business. People keep coming to Columbia because of the job opportunities, low cost of living, and high quality of life.
Key Population Stats:
- City of Columbia is home to about 135,000 residents with more than 820,000 people living in the metropolitan area.
- Columbia is the capital of South Carolina and the 2nd most populated city in the state, right behind Charleston.
- Metropolitan Columbia – also known as the “Midlands of South Carolina” – consists of eight counties, including Richland (where Columbia is located) and Lexington.
- Between 2010 and 2020 the Columbia MSA had a net population increase of nearly 80,000 people.
- Population of the Columbia metro area is projected to exceed 900,000 residents by 2030.
- Median age in Columbia is 28 years vs. 39 years in the State of South Carolina.
Nearly 43% of the residents in the Columba metro area hold a bachelor’s degree or higher. In fact, Columbia ranks 23rd in the nation for holders of doctoral degrees and 32nd for holders of college degrees.
The well-educated and productive workforce produced by the region’s 11 colleges and universities is just one of the many reasons why so many new and innovative companies keep coming to Columbia.
Key Employment Stats:
- The GDP of Columbia MSA is more than $43 billion, according to the Federal Reserve Bank of St. Louis, and has grown by nearly 37% since 2010.
- Job growth in Columbia was 1% last year, while unemployment is just 2.2%.
- Job openings in Columbia totaled 11,365 through the end of last year.
- Employment in Columbia is expected to grow by more than 12% by 2026.
- Target industry sectors in Columbia include advanced manufacturing, healthcare, insurance information and technology, green energy production, and transportation and logistics.
- Top five employment sectors in the Columbia MSA are health care and social assistance, retail trade, accommodation and food services, educational services, and public administration.
- Largest employers in Columbia include Amazon, Blue Cross Blue Shield of SC, Department of Defense, Michelin North America Inc., Richland County, United Parcel Service, Fort Jackson Army Base, and the University of South Carolina.
- Major manufacturing companies in Columbia include Square D, International Paper, Honeywell, Westinghouse Electric, Trane, and Bose Technology.
- University of South Carolina main campus is in Columbia, and the area is also home to other institutions of higher learning including Benedict College, Columbia College, and Midlands Technical College.
- Nearly 89% of the residents in Columbia are high school graduates or higher, while almost 43% hold a bachelor’s degree or advanced degree.
- Interstate highways passing through the Columbia metro area include I-20, I-26, and I-95.
- CSX Transportation and Norfolk Southern provide freight rail service in the Columbia region.
- Deepwater seaport of Port Charleston is less than two hours from Columbia.
- Columbia Metropolitan Airport (CAE) provides nonstop service to eight cities including Miami, New York, Chicago, and Washington, D.C. and also serves as the Southeast Regional Air Hub for UPS.
Real Estate Market
Columbia, South Carolina is the 5th-best housing market for 2020, according to a recent article in The Post and Courier.
Strong market fundamentals like a growing economy and job market combined with a low cost of living are just a few of the reasons why the real estate market in Columbia is expected to stay strong in 2020. In fact, Realtor.com predicts sales volume will rise about 5.5% this year, while prices decline by just 0.2%.
Key Market Stats:
- The median listing price of a house in Columbia is $183,000 while the median selling price is $155,300 according to Zillow (as of January 2020).
- Square foot listing price in Columbia is $96 vs. $103 per square foot in the Columbia metropolitan area.
- Home values in Columbia increased by 4.1% last year and by nearly 23% since February 2015 based on the Zillow Home Value Index.
- Average days on market is 71.
- During the listing period 15.2% of the houses for sale in Columbia have a reduction to the listing price.
- 14.6% of the homes in Columbia have a negative equity vs. 8.2% nationally.
- 2.1% of the homes in Columbia have a delinquent mortgage vs. 1.1% U.S. average.
- Neighborhoods in Columbia with the highest home values include Bradley and Dentsville.
- Belvedere and North Columbia are two neighborhoods in Columbia with the lowest home values.
Strong Renters’ Market
Although housing is relatively affordable in Columbia, there simply isn’t enough inventory to meet demand, according to The Post and Courier. The imbalance between supply and demand is one likely reason why so many households in the market rent rather than own.
Rental property investors in Columbia also benefit from the various demographic segments driving demand for rental housing, including the military from Fort Jackson Army Base and the National Guard, students from the University of South Carolina, and retirees drawn to the low cost of living and great climate.
Key Market Stats:
- Median rent in Columbia is $1,235 per month vs. $1,304 per month for the metropolitan area.
- Rents in Columbia increased by an average of 4% over the past year, according to RENTCafé.
- 53% of the housing units in Columbia rent for between $701 and $1,000 per month.
- Nearly 55% of the households in Columbia are renter-occupied.
- Neighborhoods in Columbia with the lowest rents include Brook Pines, Dutch Square, and Skyland where rents average $776 per month.
- Neighborhoods in Columbia with the highest rents include Downtown Columbia, Elmwood, and Granby Hill where average rents are $1,886 per month.
Historic Price Changes & Housing Affordability
Rental property investors conduct a variety of financial analysis to determine which real estate markets to invest in. Two of the key data trends to review are the historic change in housing prices and the affordability of housing in a specific market.
Tracking the change in housing prices over the long term may indicate the potential for future appreciation, while housing affordability is one indicator of how strong the demand for rental property might be.
Generally speaking, markets where houses are relatively affordable see more homeowners than renters. However, the exact opposite is true in Columbia, where more than 50% of the households are occupied by renters. Reasons why more people rent than own here include a shortage of affordable housing and the strong demand for rental property from a variety of renter segments.
Each quarter the FHA releases up-to-date data on the change in home prices for all markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for the Columbia MSA shows:
- Since Q1 1991 homes prices have increased by 124.82%
- Over the past five years home prices have increased in Columbia by 28.68%
- Over the past year prices have increased by 7.27%
- Over the last quarter home prices in Columbia have increased by 2.05%
The National Association of Realtors (NAR) publishes a Housing Affordability Index (HAI) report that measures the affordability of housing in every market across the U.S. The NAR begins by comparing the median family household income needed to purchase a median priced single-family resale home, assuming a conventional mortgage with 20% down.
Using 100 as a baseline index number, the NAR then assigns each market a HAI. The greater a market’s HAI is above 100 the more affordable housing is.
Based on the NAR’s latest report, the HAI for the Columbia MSA was 201.3 in 2018, the most recent year available. This means that the median family has slightly more than twice the income needed to purchase a median priced, single-family resale home in the Columbia, South Carolina metro area.
Quality of Life
Columbia is a city that mixes traditional Southern hospitality and tradition with today’s fresh perspectives. The city is a creative and tech hub fueled by the University, nearby military facilities, and the capital city community.
Key Quality of Life Stats:
- Forbes ranks Columbia as one of the best places in the U.S. for business and careers, cost of doing business, job growth, and quality of education.
- Cost of living in Columbia is 3.4% below the national average.
- Columbia ranks #4 in the list of U.S. cities millennials are calling home.
- U.S. News & World Report ranks Columbia as one of the best places to retire in the U.S.
- Columbia also receives strong ratings from U.S. News for value, job market, desirability, and net migration.
- Niche.com gives Columbia, South Carolina an “A” grade with strong scores for public schools, housing, family living, nightlife, and diversity.
- Climate in Columbia is humid subtropical with cool to mild winters and hot humid summers.
- Must-see places in Columbia include the Northeast Farmers Market, The Winery Mercer House that’s only one of ten organic wineries in the U.S., and the award-winning 70-year-old Maurice’s Piggie Park BBQ.
- The Main Street District in Downtown Columbia is the perfect spot to enjoy the Capital City’s art, live entertainment, cultural events, and foodie hotspots.
- Providence-Hospital Columbia is among the best-ranked hospitals in South Carolina.
- Sports programs at the University of South Carolina provide Columbia’s most popular athletic events.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Columbia based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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