Quote:
Originally Posted by wasme
While housing market is pretty bad nationwide, Charlotte's housing market is doing well at least now. What's #1 reason in your mind? And are you a realtor?
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Doing "well" is all a matter of perspective.
If two people take a test and one person scored a 15 and the other a 55 (out of 100). You might say the 2nd did "well".
However the point is both grades are F.
That's kind of the scenerio Charlotte metro is in today. And as I've been saying all along, the trend will continue down for several reasons.
1. Major oversupply of inventory: As talked about ad nauseum on this board, look at any price range of homes in the metro region and you'll find new construction and resales just sitting for a long long time. Builders got greedy and overdeveloped. Town Councils and politicians allowed this to happen w/o focusing on the infrastructure to accomodate this. to name a few. Builders have slowed considerably which is a good first step, but the months of inventory out there is astronomical, so it will take a long time for this # to go down.
2. Foreclosures: large amounts of ARM mortgage's resetting will continue through all of 2008. This will bring plenty of negative news about blight in many neighborhoods and builders leaving certain markets (ie Beazer in Charlotte). Attached is a chart which shows the reset schedule for arm's..if someone has a more current chart, it would be appreciated.
ARM Reset*Schedule - Statistics 2007 - bubbleinfo.com (http://www.bubbleinfo.com/statistics-2007/2007/3/15/arm-reset-schedule.html - broken link)
3. Transplant slowdown: Charlotte depends on transplants for their growth, that's a fact. Many people do want to move to this area but can't because they can't sell their primary homes. Thus which leads into 1 of 2 scenerios. Carry two mortgages or let the deal fall through here. The charlotte market will not get better until native transplant markets bottom out which we don't know when that will be.
4. Tightening Standards: Put simply, there are less qualified buyers now then ever before. So many deals are falling through now because potential homebuyers can't get the financing they need.
5. Buyer Psychology: Many buyers today (the ones that are qualfied) are sitting on the sidelines because they suspect "why buy now when I know prices will drop in 3-6 months?". Totally different attitude from 18-24 months ago.
In summary, Charlotte was "late to the party" in terms of a major slowdown, but it is alive and kicking right now. It will not improve until bubble markets bottom out. Until then, there will be major pain for homesellers and builders alike in this region, while buyers w/o any contingencies will reap the benefits.