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SC News

York County’s Housing Market Is Red Hot. And It’s Burning Military Vets Looking To Buy In.

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Scott Morgan
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South Carolina Public Radio
Existing homes and those being built, like these in Rock Hill, are getting tougher for buyers who want to use Veterans Administration loans to buy into a market that overwhelmingly favors sellers.

The housing market in the Charlotte metro region is the Wild West for sellers. But military veterans trying to buy in through their VA loans are facing some tough obstacles.

Timitra Easton gave up looking for a house. For now, not forever. She’s “taking a little break because, you know, rejection hurts.”

This 20-year veteran of the U.S. Navy rests comfortably on her couch while she tells me this. It’s an immaculate couch in an immaculate apartment in Fort Mill. Not much about the place says “navy,” except, perhaps, for the tidiness that belies an adult life kept in such order – and, of course, her cap with the Navy logo on it.

Easton is intensely proud to have retired as a chief petty officer. You don’t get called “chief” in the Navy unless you earn it, and she’s proud to have earned it. She’s also intensely energetic and immediately likable; candid and definitive in a way you’d expect someone to be after a career in which nonsense has no place.

But she’s still a little hurt. The rejection she mentioned is the repeated “no” she heard for a year-and-a-half trying to buy a house in Fort Mill. She wants to use one of the more generous benefits afforded to military servicemembers, the Veterans Administration loan, to buy a place.

But the red-hot York County housing market is making it really difficult.

Data provided to South Carolina Public Radio by Canopy MLS in Charlotte, tracking every agent-listed existing-home (ALEH) sale in York County from Jan.1, 2018 to July 1, 2021, suggests Easton isn’t the only military vet facing a tough sell to sellers.

According to the data, VA loans comprised 7 percent of all ALEH sales in York County in 2018, 2019, and 2020. Through July 1 of this year, VA loans comprised 6 percent.

That might not sound like a big difference, but it translates into a projected 49 fewer homes sold using VA loans this year compared to 2020 and 58 fewer than in 2019. Through the first six months of this year, there were 168 homes closed through VA loans in York County – a total that’s on pace to finish the year at 336, the fewest in several years.

Houses in York County are also getting a lot more expensive and a lot harder to catch. The MLS data show the median home price in the first half of this year to be $313,900, which is about $45,000 more than just two years ago. Through May, Canopy’s data show an average increase of almost 13 percent in home prices across the Charlotte/York County region.

That spike in prices is being driven by an extremely tight market. According to the MLS data, homes are staying on the market for a median three days in 2021. In fact, the data show that around half the 2,798 homes sold in the county from January to July of this year were on the market for three days or fewer, and of those, a third were on the market for zero days.

That median is down from eight days last year, and down from 17 days in 2019.

This, says Karen Shaylor-Wong, a Charlotte-based real estate agent who specializes in buyers using VA loans to purchase homes, has created a feeding frenzy in the York County market (and across the Charlotte metro entirely).

“People are really looking at the asking price as a starting point for their offers,” Shaylor-Wong says.

The MLS data bear this out in. From 2018 to 2020, closing sale prices of ALEH homes in York County, in the aggregate, came up between $1.4 million and $2.7 million short of asking prices.

In the first half of 2021, closing prices for ALEH homes in York County were more than $9.1 million higher than asking prices.

“Not only are they going over asking, they add on 2 to 3 percent and they don’t appraise,” Shaylor-Wong says. “So the vet is now stuck with having to come up with all kinds of cash, or he can’t buy that house and has to back out.”

For vets like Timitra Easton, it’s a tough pill to swallow. She’s currently regrouping (or, rather, formulating her “next plan of attack,” which she says is another byproduct of a military career), but wants to enjoy her new apartment for a little while.

Easton moved to Fort Mill in May, from Maryland, because she wants to be a foster mom and likes the city’s schools, and because she can be close (“but not too close”) to her family around the Carolinas.

Having grown up in poverty in East Orange, N.J., where her high school principal was the famous, bat-wielding Joe Clark (who was exactly as Morgan Freeman portrayed him in the film “Lean On Me,” she says), Easton says she learned to be smart about her money.

So when she bid on her “just perfect” dream house – for which she was the 13th bidder after just 11 hours on the market – she didn’t want to commit to the extra $11,000 that she says the seller asked her to put down on the property.

Ultimately, she says, the person who got the house paid an additional $17,000 for it.

But even if Easton had offered extra money, there was no guarantee she’d get the house. Ask Shante Brooks.

Brooks, who left the U.S. Army after a little more than 10 years as “a 92-Foxtrot” (that’s a petroleum specialist), and I meet in her kitchen just after 7 a.m. One of us is just getting up, the other is just getting ready for bed after working the overnight shift.

Across her kitchen table (in another immaculate residence, for what it’s worth), she tells me how she too had found her perfect house in an ideal neighborhood. It was going for $210,000. She bid $218,000, thinking “Come on … they’re going to take it,” she says.

Well, they didn’t.

What burns Brooks is less that someone else got the house she really wanted and more that the seller ultimately took $214,000 for it. Brooks says she doesn’t know why the seller settled for less than what she’d offered, but she quietly suspects a cash deal happened.

If so, she says, she understands why a seller would take that over anything like a VA loan. Cash deals are easy and fast, and in a market that overwhelmingly favors sellers right now, sellers can pick and choose like royalty which deals they want to make.

This kitchen we’re sitting in, though, is in Brooks’ house. She was able to buy in Rock Hill.

But although she likes the house fine, it speaks to the fact that veterans relying on VA loans can find homes in York County, they’re just having an increasingly hard time landing their first-choice homes.

“I think I kind of was at the point where I just settled a little bit,” she says. “Because I wanted something.”

Brooks says the prices in the kind of neighborhood she wants – quiet, laid-back, neighborly, maybe a few small shops close by – were above what she is comfortable spending. Unlike Timitra Easton, Brooks says she didn’t learn to be good with her money until after she left the Army.

She says Veterans United – the largest vet-focused mortgage lender in the U.S. – helped her figure out how to build up her credit, become pre-qualified to tap into her VA loan privilege, and save up for a house.

But none of that three-year learning curve prepared her for the fact that a lot of sellers apparently don’t want anything to do with VA loans.

No seller’s agents contacted for this story responded to requests for an interview, but Shaylor-Wong says a lot of seller’s agents do quietly steer their clients away from offers involving VA loans, especially in markets that catch fire the way York County’s has.

She says that’s because VA loans appear cumbersome compared to conventional (and especially cash) deals. In the first half of 2021, conventional loans accounted for 65 percent of closings on York County’s ALEH properties; cash deals accounted for 14 percent, according to MLS data. Conventional loans also accounted for 65 percent of deals in 2020 and 64 percent in 2018 and 2019. Cash deals comprised 12 and 11 percent in 2019 and 2020, respectively, and 14 percent in 2018 (when the median price for a home was almost $60,000 lower than it was in the first six months of this year).

Chris Birk, vice president of mortgage insight and education at Veterans United, agrees that seller’s agents are often leery of VA deals because they fear they’ll be unwieldy. He also admits that back in the 1940s and 1950s, it might have been true that there was more paperwork and longer wait times to close when a VA loan was in play, but he says those kinds of issues no longer hold much water.

Birk says he’d like seller’s agents to become more educated about VA loans. Yes, they do require an appraisal, but they do not require an inspection. He just thinks inspections are good to have when putting your money into something as expensive as a house.

The problem with appraisals, however, as many military vets looking to buy in York County are finding out, is that appraisals – required by the Veterans Administration to establish a fair-market value of a property – might come in a lot lower than what a seller is asking for (and is likely to get).

Another issue Birk says sellers worry about when it comes to VA loans is long closing periods. A typical closing period for any home sale is between 30 and 45 days. Birk says VA loans, on average, take only about three days longer to close than conventional deals, not weeks as some sellers might fear.

For Shante Brooks, there’s something additional and intangible happening. Based on the stories she’s heard about sellers’ poor welcomes to VA loans, she doesn’t find the market in York County very military friendly. She expects to move in about five years. She’s looking at Columbia or Sumter, where Shaw AFB and Fort Jackson sit close by.

Neither Brooks nor Easton believe that sellers need to roll out red carpets for military vets looking at their properties, but they do both say more sellers’ agents need to be better educated on how solid a prequalified VA buyer really is.

Vets like Easton, in fact, get a steady income from retirement that maybe isn’t caviar money, but is steady and solid, she says. She thinks that should carry a lot more weight for sellers who might have a misconception that military vets are not financially savvy.

Under it all, though, she’s a little hurt by something beyond the three home-bid rejections she got over the course of a year-and-a-half. A VA loan is a reward for service to country, she says. And she wishes more people would see it like that when they’re selling their homes.