We know there is a lot of inventory- 54 months according to my last post based on the first 9 months sales of this year... an almost 5 year supply of homes. Does the word sub-prime, or Pick-A-Pay mean anything to you? Or my preferred term, Junk Financing? Looking back, way back all the way to 2001, I charted the growth of the Over$1M market in the Carolina MLS. It is important to note, the slow but steady growth from 2001-2003, and then the sharp rise in 2004-61%, or an additional 82 homes. Thes 82 new 1M homeowners represent 24% of all 
the over $1m homes sold in 2001-2003. So what happened in Charlotte to account for this massive influx of new money - 82 homes to be precise... Did we bring a corporate headquarters here that year of significance? A NFL franchise perhaps? What would account for not just the 133 home sales of 2003, but another 83 or215 in 2004? What if I told you that Over $1M home sales jumped another 50% in 2005, and another 35% in 2006? Check out the chart, and see if you can answer that question we heard so often: "Where were all these people coming from who can afford these Million dollar homes?" In the peak year, 2007, 477 over $1M homes were sold. That is the equivalent of all the homes sold in 2001, plus 2002,2003, and most of 2004. Whaaat? Those of us who lived here know there is no explanation for this kind of increase in demand. Job growth was good from 2001-2203, and from 2004-2008 and that produced healthy increase in demand for housing, but not this good.
This is about greed, our insatiable desire to have everything NOW, and junk loans. Junk loans that created a false demand, or a bubble, and now, as many of these mortgage reset, are going to produce foreclosures at record levels in the next 3 years.
Since the junk loans are no longer available, and most of those loans reset in 3-5 years, demand is quickly falling to pre-junk levels, and foreclosures will mount as sales won't break 200 in 2009. And in 2010? I'm predicting about 150, and inventory still at 5 year levels. It is going to get worse before it gets better.tm
::::::::::::::::::::::::::::::::::::::::::::::::::::
Is it safe to buy a home here in Charlotte? Yes- with conditions. Buy for the long term, buy in a blue chip neighborhood, and buy it cheap- We can help. We help with home finding, we do the research, and we take your lead in the negotiations.. 704-351-1519 Custom Homes in Stonecroft- Southpark area Over $1M Homes Sales Market Report
Everyone is familiar with the national brouhaha behind The Economic Recovery Act, aka the stimulus plan... Is it possible that, at the State level, the funds could have been politically hijacked, and sent to primarily rural political strongholds in the state? It is possible that the rural interests gain once again at the expense of the cities that pay the state's bills?
The Stimulus invested $563,065, 282 in North Carolina, and of that $512,689,234 is "Under Contract", or allocated presumably with "shovel-ready " projects and contractors from around the state. Much of this data comes from ProPublica*
North Carolina, 10th largest state in the nation, was treated fairly by the Federal Government. It has received the 9th largest State Stimulus Check at $563,065,282.
Since the Charlotte area is, by far, the largest county by population in NC , the largest contributor to state GDP, it is logical to assume we are receiving the largest amount for stimulus funding, right? No, not exactly. Surely it is Raleigh? No, not Raleigh either.RDU? Guess again...
Congressional District 5, Virgina Foxx (R) andSenarotr Burr's former District... Have a look for your self: The rest of the story- spending by Congressional District, and County Charlotte NC Stimulus
"The $8,000 Tax Credit Looks Good, But how do I make a good decision when buying a home in today's market?" A recent Charlotte home buyer asked me... and made me think.
If you listened to the talking heads on TV, you would be convinced that the world as we know it is about to come to an end. Well no. We are still working here in Charlotte, going to work, selling homes, like about 2/3's of the rest of the country that have not experienced big price declines.
Still, in this market, there is a premium on Buying Smart. If you are thinking that is much more than "Buying Low" you are right!
5 Keys to Home Buying Success in Today's Market
1. Buy for the long term and plan to stay a minimum of 3 years, preferably 5-7 years. The longer you stay, the lower the risk in your investment. You get tax savings every year, and it just makes sense you have more time to let your home appreciate, and appreciation WILL be back in Charlotte before too long.
2. Buy a home in a community with a "Value- Anchor." What is a Value-Anchor? Anything that sets a particular set of homes apart to a large number of potential purchasers. Some examples include: The area it self, in Charlotte Myers Park, Southpark, these names have cache... not coincidentally they are closer to uptown. Waterfront, waterview, golf course, these are all homes that have attracted, and will attract a particular set of buyers.
The communities above are higher priced- you are starting out, maybe you can't afford these, then look for other value anchors, for example: communities with great natural beauty, communities with loads of amenities, communities with great schools (though this can change over 10 years) still look for a value anchor in every house or community. Close to town works almost anywhere. Other community anchors might be high quality amenities, larger lots (than the neighors) , great parks or greenways nearby, unusually convenient neighborhood, etc. There are too many to list, but I always ask, what is the value anchor, or value proposition for this home and community?
3. Buy Quality over quantity-Smaller, well cared for home with custom features are more and more preferred to a big plain box, and the dramatic shift in the last year is towards smaller homes. At any price point, look for the home with the most features, with attention to the feature that last.
4. Don't over buy, and finance with incredibly low 30 year Fixed which won't last forever. Current rates are around r 5%, and what a difference that makes. I bought my first home when interest rates were 11%! I made 45K per year and qualified for an $85,000 home- today, the same $45K could buy a home, with a 5% loan, at $175,000, with similar $1,000/mo payments to my first 11% loan. (Depending on down payment, taxes , HOA fees etc)
5. Shop for the right community, the right deal, and then the particular house- in that order, to insure you are most likely to be happy with your purchase and stay. You can make changes to the house to make it more to your liking, but if it is in a great community you want to live in, and you got it at a great price, that is something you can build on.
Do be sure and claim the $8000 Federal Tax Credit if you purchase by --November 30, 2009, April 30, 2010--it is FREE money.
:::::::::::::::::::
Remember, to qualify for the $500 Gift card, give us a call first-704-351-1519- we'll often get the right agent on the phone right then... and get you started. Sign up here for your Fast Start Guide to Buying Your First Home Why You Need A Buyer Agent- Sand Traps and Land Mines to Avoid When Buying Your First home Learn more about the McDonald Team and First Home Buyers.
Deciphering bank motivation... I know I know, it may somewhere between astrology and palm reading, but here goes...
Here in Charlotte, where home values (though more recently declining) have remained relatively strong, it has to be on the market quite some time before they are willing to take that size (20% or so) of a discount. Conversely, in parts of California, I am told they accept substantial discounts within days of listing, why would that be?
What are the variables to consider? And while each bank/REO will be unique, are there any good rules of the road? Or at least a "Rule of Thumb?"?
I think the #1 determinant has to be: What is the likelihood of price declines in the next year?
The higher that likelihood, the sooner a bank would want to say "Let's Make a Deal." Interestingly enough, there are a number of companies that provide this information, the most widely used public (banks have proprietary date too) is from PMI, Private Mortgage Insurance which publishes those "likelihood of Price Declines" for over 350 markets in the US every quarter, and they use it to rate their proprietary private mortgage insurance.
One thing appears to be consistent here in Charlotte, banks and intermediaries get very nervous once on the market 120 Days. We have seen banks turn down offers of 90% of list in the first few months, only to accept 75-80% of list in month 5. We've seen a bit more flexibility early in the sale process on the less expensive REO's- could that be because even a 15% discount on a house priced at $125K is not a lot of cash comparatively speaking? Or perhaps a recognition that there are a LOT more REO homes priced in this price range and so getting an offer and getting it off the market is paramount?
One thing is for sure, if it lasts 120 days, the Sellers call us and say SELL IT, Bring us an Offer, and they mean it.
I am sure these are two of the external, local market factors Banks consider, but there largest motivation may be their own balance sheet, or their next meeting with regulatory (FDIC) agencies, how close they are to their required reserves, etc, and with these we would not have any idea of their motivation.... except watching now as the end of the first quarter is fast approaching... will that make a difference?
I would appreciate other agents from around the country to comment, possibly any asset managers, or others with REO experience. watching?
Thanks to all
-------------
See my Introduction to Charlotte Real Estate or visit my personal website Search for Charlotte Homes
A new page at Charlotte Communnities is perfect for that person who just found out they were being transferred to Charlotte NC, or perhaps they've hearcd about Charlotte.
If that's you , then you'll want to
it will take you from an overview of Charlotte, to a look at specific areas and neighborhoods, in two short videos.
Then of you'll go to the category of choice, Charlotte Schools, Things To Do in Charlotte, Over 55 Active Adult-All from the left hand column at Charlotte Communities.
-------------------------------
Charlotte remains a desirable city to move to, Charlotte real estate is eminently affordable, and when combined with historic low interest rates makes buying a home in Charlotte a smart buy, as long as you buy a home for the long term, and buy it smartly.
I am a Charlotte real estate broker specializing in relocations, 2nd homes and first time home buyers--buying and selling
real estate of all kinds- and will represent only you. My team works with Buyers and Sellers every day from Ballantyne to Lake Norman -and Fort Mill SC too. We work with all relocation companies. My team and I know the homes, the communities, and the new home builders. We know what's hot, what's not, and where the deals are. I represented Buyers in the largest foreclosure sale in Charlotte in 2008. And I helped a handful of first time home buyers. I was the Top Agent in 2008 in our 800 + Agent firm, and won an award for customer satisfaction in 2008. We are flexible and at your service.
We are working to help you "buy smart" in Charlotte, and to make your relocation easier and less stressful.
If it's between the hours of 8 AM to 8 PM, EDT, please don' t hesitate to call me direct at 704-351-1519. Terry
Charlotte NC CharlotteCommunities Charlotte Real Estate Charlotte Luxury Homes
 |
|
|
I lead a small skillful Team in the buying and selling of residential and investment property from Waxhaw to Lake Norman. We are knowledgeable, dedicated, and vigorously defend our clients interests.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
