Don't buy in charlotte! (Mooresville: 2011, foreclosures, renting)

[flexysteve]

If you hated it that much you'd move. The fact that you still live here means that you don't hate it that much. Stop complaining and act. Along with the fact that many americans aren't very smart, they sure like to complain and not take action. If I hated my job, I'd quit. If I hated where I lived, I'd move. Quit bitchin and do something.

[md to nc]

Originally Posted by flexysteve

If you hated it that much you'd move. The fact that you still live here means that you don't hate it that much. Stop complaining and act. Along with the fact that many americans aren't very smart, they sure like to complain and not take action. If I hated my job, I'd quit. If I hated where I lived, I'd move. Quit bitchin and do something.

Exactly if someone hated a place that much they would not care at what cost it would take to get the h**l out. The only complaint I have it this economy right now but that has nothing at all to do with Charlotte, I would be in the same way in MD. As far as Charlotte itself, I love it and would not move back to MD. If I chose to move, it would be forward, like the coast, lol.

[Comfort Food]

In the long term, real estate prices do not appreciate an average of 5% per year. Typically just a hair over the rate of inflation. The price increases we've seen (even in CLT) over the past 8 years are an anomaly.

Our bubble here is small, but it does exist. IMO, If you buy today, don't expect to realize much appreciation unless you hold on for 8-10 years. I would expect prices to gradually decline for at least the next 18 months here, possibly longer if the economic downturn is as severe as some think it will be. Prices have to be in line with incomes.

Transaction costs (realtor fees) are still considerable, but the good news is that the days of 6% commission are numbered.

[SunnyKayak]

Originally Posted by Comfort Food

In the long term, real estate prices do not appreciate an average of 5% per year. Typically just a hair over the rate of inflation. The price increases we've seen (even in CLT) over the past 8 years are an anomaly.

Our bubble here is small, but it does exist. IMO, If you buy today, don't expect to realize much appreciation unless you hold on for 8-10 years. I would expect prices to gradually decline for at least the next 18 months here, possibly longer if the economic downturn is as severe as some think it will be. Prices have to be in line with incomes.

Transaction costs (realtor fees) are still considerable, but the good news is that the days of 6% commission are numbered.

that is way it use to be but we are now in a recession and it looks very bleak with no light at the end of the tunnel. Homes prices are declining , forclosures are way up and people who would love to own their own home in this area cant. Why no job or lost their job.

[CouponJack]

Originally Posted by Kristen Haynes

While I certainly see signs of the real estate slowdown here in our fair city, the "SOLD" data is what tells the true story when it comes to appreciation values in any given market- not just what people "hope" to sell for. Our market has been very steady compared to Vegas, California, and Florida, and actually only lost 1 % in sold value overall from October 2007 to October 2008- this is a true recession. Homes are selling in the Charlotte market for between 91.3% and 96.9 % of their listed price- phenomenal numbers as compared with other cities, who are experiencing severe DECLINES in their numbers. And homes are still selling- just at a slower clip- the average list time is 110 days on the market, versus 75 days on the market a year ago in October 2007. And some areas of our market do perform better than average- fast growing areas, like Wesley Chapel, Ballantyne, and Fort Mill are posting better than average numbers. So, yes, contracts are coming in slower, but sellers are getting the value out of their investment when they do sell.

Most buyers are not "real estate invesotrs" who buy and flip homes for quick turnaround. If you take a 5 or 10 year view of the market, which is the minimum most people hold a real estate investment, the numbers are steady and rack up yearly, Five percent a year becomes a 25 % return on your investment over a five year span- how many of us can match those numbers in a stock fund or cd? There is money to be made in ANY market in real estate- you just have to know what to buy,and how to buy, based on the market you are in.

Interest rates are also at crazy, record lows- currently at 5.25 % for a 30 year fixed rate, with changes potentially coming that will drop them even lower- some are saying in the 4.5 % range. If you buy a home and are paying an interest rate of 5.5 %, and your investment returns an average of 5 % a year- that's a return of 25 % over a five year span- not so shabby. Plus, when selling your principal residence, you get to shield your appreciation 100 % from taxation when you sell it- unlike selling stocks, where you pay capital gains taxes- (singles get to keep $250,000 and married folks get up to $500,000 as long you occupy the residence for any two out of the five years)- AND you get a further tax break as an interest deduction on your tax return for each property you own. What else? You even get a tax break on your points paid to get that cheap mortgage in the first place. There is no other place I know of that gives you so many benefits tied to such a solid performing investment.

That being said, I think that we are starting to see bottom of the barrel pricing now- builders have gone as low as they can to try to move inventory off of their books going into fiscal 2009. This is a true buyers market. And that means "buy and hold"- the same advice you would get when looking at any type of investment (stocks, mutual funds, etc). Most of us would do lousy as day traders and do not have enough experience to "time" the market- and even the pros are wrong. It is an excellent time to buy real estate- the deals are out there, the interest rates are low, the tax breaks are real, and the appreciation figures will be steady over the long term. So-my advice- buy at the bottom of the market (now), look at your real estate holdings as a long term investment, grab the benefits of the tax breaks and cash that is shielded from taxation, and watch your appreciation grow- slow and steady.

Kristen, I'm sorry, the pitch won't work. Please don't come on here and quote "% of list price" figures because people who understand where they derive those figures know its a total sham. Example:

Person A lists their house for $350,000. It doesn't sell after 3 months so they lower it 25K (to 325,000). Now the house sells for 300,000....well according to your figures the owner got 92% of list. HOWEVER it does not take into account the original list price that was reduced from. So the TRUE % of list price is 300K/350K which is 85% of list....

See how the NAR likes to manipulate numbers on the unsuspecting public?? Shall we go into "days on market" or do you want me to dissect that too?



So please leave the figures out and don't think we all fell off the turnip truck. The market is dead in Charlotte like everywhere else. Commercial is rapidly declining almost to where Resi is right now.

[ivster]

Some real world Charlotte real-estate reality.
I am in the middle of a company relocation to the NE; I bought my house in Aug of 06 for $209K. As part of the relo package they do offer to buy your house after 150 days on the market. To get the number they will offer, the do 2 appraisals on the house, average the 2, and then offer 95% of that value. Well yesterday they told me what that value would potentially be: $154K .

I think I almost had a stroke. The average listing price of the house around me is still around $210k area. I have it listed at $200k and had 2 showings in 18 days. From the sounds of it I will lose $40k I put down on the house, and may have to write a check to get out of it too. Hard pill to swallow.

[lovesMountains]

Originally Posted by ivster

Some real world Charlotte real-estate reality.
I am in the middle of a company relocation to the NE; I bought my house in Aug of 06 for $209K. As part of the relo package they do offer to buy your house after 150 days on the market. To get the number they will offer, the do 2 appraisals on the house, average the 2, and then offer 95% of that value. Well yesterday they told me what that value would potentially be: $154K .

I think I almost had a stroke. The average listing price of the house around me is still around $210k area. I have it listed at $200k and had 2 showings in 18 days. From the sounds of it I will lose $40k I put down on the house, and may have to write a check to get out of it too. Hard pill to swallow.

But geez, you only bought it TWO YEARS AGO!!! WHAT DO YOU REALLY EXPECT??? Additionally, so much depends on what area of town this house of yours is in. Sounds like they are lowballing you on that $154 for the convenience of selling and getting on with your life. In reality, again based on where the property is located, you really should expect to sell for more like $180,000 in current conditions. Best of luck.

[Native_Son]

how location dependent are these real-world figures?

I have the feeling that properties near center city are still evaluating/holding steady. I think the depreciation is in the suburbs, and it's dragging down the averages city-wide...

thoughts?

[ivster]

Yeah location has a big factor. I suspect I will be able to sell it for the mid $180's. I made the mistake of buying a Beazer house, (yeah I know, one I will never forget). When they pulled out they fire-saled the remaining inventory by an everage of atleast $20K, so this has a big effect.

[lovesMountains]

Originally Posted by ivster

Yeah location has a big factor. I suspect I will be able to sell it for the mid $180's. I made the mistake of buying a Beazer house, (yeah I know, one I will never forget). When they pulled out they fire-saled the remaining inventory by an everage of atleast $20K, so this has a big effect.

Well, there you go, you've basically explained your situation perfectly, and while it is happening around town, it's not exactly typical. Homes in my neighborhood are still holding their value (so far!) - but I am in town in a stable, desirable area.