Charlotte Real Estate Blog

Foreclosures | What is going on with foreclosure filings in the Carolinas?

The national foreclosure filing numbers are out and the news is decent given the situation.  The number of foreclosure filing has dropped nationwide by 5.14%over the period of the first six months of 2010 compared to the last six months of 2009.  These numbers were given by CNNMoney.  The report also notes that 1 in 78 houses is still in danger of foreclosure.  The three states that lead the nation in foreclosure filings are Nevada, Arizona, and Florida. 

The Carolinas are experiencing a different trend.  The number of foreclosure filings over the same period ot time grew by 10% in North Carolina and by 21% in South Carolina.  Even with these increases the Carolinas' foreclosure rates are still a good bit below the national average.  (For the second quarter of 2010, North Carolina ranked #32 in the number of foreclosures)

WHAT HAS CAUSED THE FORECLOSURE FILING INCREASE IN THE CAROLINAS?

Analysts believe that number of foreclosure filings is still on the rise in the Carolinas because North and South Carolina are two very popular states for second homes. 

Low mortgage rates will continue to help to incent investors and home owners to buy up the foreclosures in today's market.  We are expecting to continue to see a large number of foreclosures nationwide. 

Another reason that the national foreclosure filings has decreased is because more banks are becoming more willing to allow a short sale.  Banks will often be willing to short sale the property to avoid paying the high cost of foreclosing on the property.

Steve Harney, a well respected real estate speaker, told our office a few months ago that he is predicting 5-8 million more foreclosure filings in the near future. 

We will experience more downward pressure on list prices as long as there are a high number of foreclosures in the area. 

New Market Reports Offer Neighborhood Specific Real Estate Information

Allen Tate introduced a new Market Report that many of my clients are finding very valuable.  The report is sent out monthly via. email and allows the property owner to see the recent activity in their subdivision and zip code.  This tool is an easy way for home owners to stay on top of their local real estate market and allows them to have a better idea of the value of their largest investment.

The report has a "unsubscribe" link at the bottom so if you relocate or decide that you no longer want to receive the information, it is very easy to remove yourself from the program. 

If you are relocating to Charlotte, NC and want to stay on top of what is going on in the neighborhoods of your interest, this is a great way to begin.

The report also maps the properties that are currently on the market and the previously sold houses.  Contact Brandon if you want your neighborhood market report sent to you monthly.

Below is a sample of the email that is sent out.  This report was generated for Ardrey Commons, a townhome development in south Charlotte.

Why Would You Want To Sell Your Home In This Market?

This is the million dollar question for people who have not been informed about what is happening in this real estate market.  Many people do not understand why so many listings are on the market that are not in a distressed situation.  "If you were not forced to sell your home now, why would anybody want to sell at a loss?"

It is simple really.....

Many sellers want to take advantage of the market even if this means taking a large loss on their home.  Many want to get out of their 6% mortgages and into a nicer house with a mortgage around 4.25%. 

Follow this...

Lets say they bought their house for $250,000 in 2007.  Lets also assume that their home is now worth only $185,000.  The owners are still paying a 6% interest on their mortgage of or around the $250,000 price.  These sellers are not financially stressed and have always dreamed of living in a nicer subdivision closer to the city but could never afford the house of their dreams.

Now the market crashes and house prices plummet...

The seller sees houses in their desired subdivision that are listed for $350,000.  These same houses were selling for $450,000 in 2007.  The sellers has also kept their jobs through this downturn and their salary has increased a bit over the last three years.  They can afford the $350,000 even after taking a $65,000 loss on their current house.

Why wouldn't the seller make the move is the better question! (Interest rates will not stay this low forever and house prices will eventually climb back up)

So now the seller has the house they want in the subdivision of their choice.  They have a new mortgage with an interest rate in the 4% range and have bought a house $100,000 less than what it was selling for a few years ago. 

Most sellers are having to sell their houses for less than what they purchased them for a few years ago but they understand that they can make their loss back when they buy a more expensive home. 

Note, if you are downsizing and not financially stressed, now is not the best time for you to make a move.  The percentage gain you get from purchasing a less expensive house will probably not be as much as you have to lose now on your current property.

Brandon Farmer ~ Charlotte, NC Realtor®

Why You Should Consider Buying A Home in Charlotte, NC

It is no secret that sales units and sales volumn are down this summer.  The lower-end market was moving before the tax credit ended and this helped to keep many real estate agents busy.  During the tax credit months, our median sales price dropped almost 10%.  This was driven by the lower-end properties that first time home buyers were purchasing.

I knew it would be a slow summer but I didn't know who would be taking advantage of this market next.  It has been investors and move-up buyers that are keeping the market ticking in Charlotte, NC.  Investors are looking for steals with hopes of quick flips while move-up buyers are getting in their desired neighborhood at bottom dollar prices and interest rates in the mid to low 4% range.

Our sales numbers in May and June show that buyers in the upper-end range are starting to shop this market.  Houses listed from $250,000-$750,000 are starting to gain strength. 

Reasons to consider relocating to Charlotte, NC

• Charlotte was recently ranked 16th for quality of life out of the major metro areas in the nation
• Charlotte housing and living expenses are low compared with other major cities
  • The city is known for having a higher and more stable home-ownership level
  • Charlotte neighborhoods are more aesthetically pleasing than what is common in other major cities
  • Charlotte has nationally ranked schools and North Carolina has great universities
• Charlotte is located 2 hours from the mountains and 3 hours from the Atlantic Ocean
• Charlotte experiences 4 seasons with a short and mild winter
• Charlotte attracts a large educated crowd because of a growing job market, businesses moving to Charlotte, and because we are still the #2 finance city in the country
• Charlotte is loaded with parks and has a great green-way system that circles the city.  This gives bikers, dog walkers, and runners plenty of opportunities to exercise
• Offers professional sporting events
  • The city is home to the Carolina Panthers (NFL), Charlotte Bobcats (NBA), and is the capital of NASCAR with three races a year (Coca-Cola 600, Bank of America 500, and the All-Star Race).  Many hope and plan for the city to obtain a major league baseball team in the coming years

Ask your Realtor® how you can take advantage of this real estate market!

Charlotte, NC Receives Federal Grant to Jump Start its' Streetcar Project

Today Charlotte received $25 Million to begin construction on its streetcar project.  Street cars have not ran in Charlotte since the 1930's.  The first track is going to run from the mass transit center near the Time Warner Cable Arena and will run to the Presbyterian Hospital.

The city of Charlotte has already set aside $12 Million for this $35 Million project but they still need $1.5 Million for operating expenses. 

There are also hopes of extending the streetcar line to run from Beatties Ford to the now closed Eastland Mall.  This project would take over 20 years and around $500 Million.  Hopefully by then, the mall can be reopened!

Mayor Fox mentioned that the growth of Charlotte's infrastructure will provide "sorely needed jobs for Charlotte."

I have been with relocating buyers this week that are trying to decide between Charlotte and Washington, DC.  They like Charlotte better but did mention that they expected Charlotte to have a better and more massive public transportation system. 

Now that the city has the money I say start hiring some people and break ground tomorrow.

Why People are Choosing to Move to Charlotte, NC

It's all in the lifestyle.  Charlotte has more to offer than most other cities...it's that simple.  Charlotte is just starting to get the respect it deserves as being the 20th largest city in the country and did you know, that per-capita, there are more millionaires in Charlotte than in any other city in the country? 

So What Is Charlotte Known For?

• Banks - Charlotte is the 2nd largest banking center in the country.
• Parks....there are parks scattered everywhere in Charlotte and a greenway that runs around the city that gets a lot of use from bikers, runners and dog walkers.  These areas are always well maintained and are a huge asset to the city.
• Tree lined streets in most of the neighborhoods to the south of the city.  The trees are a part of the Eastover, Myers Park and Dilworth neighborhoods.
• Affordable living expense - you will definitely get more for your money here then you probably think.  Check out houses for sale in Charlotte.  The housing prices are low in Charlotte and the rental prices are also dropping.
• Growing professional sports reputation - Charlotte has a solid NFL team and a promising NBA team with Michael Jordan being the new majority owner.  Charlotte houses the AAA affiliate team (Charlotte Knights) for the Chicago White Sox.  Charlotte is also the new home to the old Albany River Rats.  This is the affiliate team for the professional NHL team Carolina Hurricanes that play out of Raleigh, NC.  Of course Charlotte is also the home of Nascar...Nascar Hall of Fame located Uptown and the speedway located in Concord.
• Growing Uptown Lifestyle and Nightlife - The condo buildings have been going up fast for the last several years.  The economy forced short sales and foreclosures to lower the prices of the condo market Uptown.  Now the prices are compelling and people have been moving in to take advantage of the deals and to enjoy the Uptown lifestyle.  The Epicenter, located at the corner or College & Trade is the hot attraction.  The Epicenter is where you will find many of the popular bars and clubs.

Questions about Charlotte?  Just Ask

Buying New Construction?...What To Ask Your Builder

There is nothing like doing a little investigation on the builder first.

Remember this is the biggest investment you will probably ever make so do your homework. The internet is a great place to start. Try Google, Facebook and even Twitter to see what is being said about the builder you are considering.  Also, do a thorough examination of the builder's website. Reputable builders will let you know who they are and what they have done.  That said, the best research you can do is ride around a neighborhood on a weekend and chat with the neighbors...they will give you the real skinny on the builder.

Once you are satisfied with the builder's reputation, formulate a list of questions that you would like answered by the on-site sales person. This will be helpful since you will get distracted during the sales process looking at the variety of homes and options that are available and may forget to ask something very important. Any questions you have about the builder will be welcomed and expected.

Now that you know all there is not know about your builder, let's get to the questions. There is no particular order in which to ask these questions but you should get answers to all of them:

• Is the builder offering any special incentives? These could be on inventory homes, base price, options or financing?
• What kind of warranty does the builder offer?
• What is the earnest money deposit, is it refundable under any circumstances, who holds the deposit and is it used by the builder as money or funds to build the home?
• How much deposit is required for options and is that money refundable under any circumstances?
• What happens if the appraisal comes in lower than the contract price?  
• How long will it take to complete the home and what does the contract say about delays in completion?
• What is builder's policy on changes after the house is started and can you walk through the house while it is under construction?
• What is the service policy after you close on the property and who do you call if you have a problem?

These questions seem to be the most asked and also cause the most problems in new home transactions. I would highly recommend that you get a copy of the agreement of sale and take it home and review every single paragraph so that you know what you are getting into. If contracts are not your thing, enlist the help of an experienced Realtor or an attorney to review and explain anything that may be unfamiliar to you. The cost of this or the extra time spent in reviewing all the paper work will be well worth your time effort and money!

Why is Now the Time to Buy?

If you are in the market for a home or are thinking about purchasing a home...let me tell you now is the time to buy.  Interest rates are at a 25-year low and the inventory of homes available is high, which means the advantage lies with the buyer. So there is a perception that buying a home in today's market can be an easy decision if you have a steady job, good credit and don't have a home to sell.

Let's take a closer look at that statement. 

Historically, we could win on both sides of the transaction because America's housing values were appreciating.  Within the past three year's however, we have seen depreciation creep in, especially where acute price increases were enjoyed.  Like the stock market, we are recalculating our market values to reflect the new norm.

Follow me. . . If I sell my house for 10% less than my neighbor did last year ($270,000 instead of $300,000) and I buy my next home at 10% less than what my neighbor paid for his new home ($360,000 vs. $400,000), I will have fared much better than he did. At those prices, I attained $10,000 in savings plus below 5% mortgage rates.  This same example could be made at any price point.

Historically, housing was not looked at as an investment. Rather, it was viewed as a necessity with modest appreciation.  When the real estate boom hit, housing became an investment with potential for profit. Instead of investing in the stock market, consumers began investing in housing. Today, savvy shoppers know to look at the housing market like the stock market - buy to sell. Take a look at the housing market numbers...they tell it all.

Need more space? Looking at the mountains or the beach? Need to downsize?  The numbers are compelling! Now is a great time to buy.

Short Sales and Foreclosures are Common in Today's Real Estate Market

Almost 35% of houses sold were short sales in the month of March.  While these are national numbers and Charlotte, NC does not have as many short sales and foreclosures as many other cities, we are being told to be prepared for many more short sale listings. 

Learn About the Short Sale Process and What You Should Know as a Seller

It is important that a seller finds an agent that has the experience and connections to successfully close a short sale.  When sellers first call their lenders to ask about the short sale options, the lenders will recommend that they list with an agent that works short sales.  After listing the house, the best approach is to employ a third party service to help negotiate the short sale on behalf of the seller.  The company that has partnered with The Allen Tate Company is Mortgage Debt Services.  This company handles all paperwork...known as the short sale package...and they also do all the negotiating with the lenders.

I think using a third party negotiator to help with the short sale can benefit everyone:

1. The seller's financial information remains confidential.  I, as agent, usually don't see or know the sellers financial status.  Only the third party negotiating service...MDS...knows the exact assets and debts of the seller.  The agent will usually only know what is owed to the lien holders.
2. The third party service works full time communicating with lenders and has built relationships and strategies to successfully close short sales.
3. The negotiating service does not cost anything to the seller.  They try to get paid through the lender but with my experience they end up actually getting paid indirectly through the agent's commission.  I find that it is worth every penny.

 Short Sales can turn into a slow and frustrating process...especially if you have more than one lien holder.  Ask your agent if he/she has a full time negotiator to work to close your deal.

 If you are in a situation where you are considering a short sale...give me a call and lets talk about your options.

How Can You Sell Your House for More with a BUYDOWN?

There are several different marketing strategies that your listing agent should try in order to get more exposure for your property.  Your listing agent should want to get the most money possible for your house but they should also want to get the house under contract and closed as soon as possible.  Time is money for buyers and sellers.

All sellers have heard the same thing from every agent..."the house needs more web exposure" or "the house needs to be decluttered/painted"....here is an idea that can produce an offer for you house while benefiting both the buyer and seller.

HERE IS HOW THE BUYDOWN CAN HELP

Lets say your house is listed for $200,000 and the buyer is going to put down 20%.  With today's interest rate of 5%, the monthly payment would be $859.  This is the perfect scenario because the house is selling for asking price. 

Now what if the house sells for $190,000??? (the buyer is still putting 20% down with a 5% interest rate)

The seller has lost $10,000 by dropping the price and the buyer's monthly payment has fallen to $816.  It seems crazy that the seller would drop the price $10,000 to save the buyer $43/month.

The house can close for $200,000 and benefit both the buyer and the seller.  If the seller spends $5,000 to buydown the buyer's interest rate to say 4.25% then the buyer's monthly payment will drop even more to $787/month.  This is great for the buyer because their monthly payment is lower and because when they go to sell the house it will look like they paid $200,000.  It is great for the seller because the buydown saved him $5,000 and it was able to make his property affordable to more buyers.

IF YOU ARE IN A POSITION WHERE YOU NEED TO SELL FOR A CERTAIN AMOUNT...YOU MAY WANT TO CONSIDER OFFERING A BUYDOWN TO TODAY'S BUYERS.