Charlotte home prices rise for 1st time in two years

Charlotte-area home prices in November inched up for the first time in two years and home sales jumped again.

The average sales price last month of $195,244 marks a gain of slightly more than 1 percent from November 2008, according to results released this morning by the Charlotte Regional Realtor Association.

That was the first yearly price gain since November 2007 for transactions through the association’s Carolina Multiple Listing Services. The past year has seen several months of double-digit price declines.

For the year, the average price is a little ahead of 2004 levels, meaning that people who have been in their homes for several years are probably still sitting on gains.

MLS sales in November rose a hefty 31 percent compared with a year ago as people rushed to take advantage of the first time homebuyers tax credit that had been set to expire last month. Congress, under heavy pressure from the housing industry, extended and expanded the credit. The November gain is even bigger than October’s year-to-year jump of almost 20 percent, the first increase in more than two years.

MLS deals account for nearly all transactions in the Charlotte area.

The big gains come on comparison to an extremely weak market last fall, when the nation’s financial system cratered. In Charlotte, that brought the loss of Wachovia’s headquarters and mounting worries about job losses. Home sales plummeted in October 2008 and continued to sink through the winter.

Despite the jump, the 2,000 houses, townhouses and condos sold last month in the area represents a sales level below that of 2003.

Federal Money Could Help Charlotte Streetcar

The federal government recently said it will distribute $125 million nationwide for transit projects that could include streetcars – an announcement that Charlotte officials said could help the city’s planned center city streetcar line.

Under the Bush administration, streetcars struggled to receive federal money. The Federal Transit Administration earlier this decade valued most of all how much time a transit project would save commuters, which made it difficult for slower-moving streetcars to receive federal dollars.

But on Dec. 1, U.S. Transportation Secretary Ray LaHood announced the FTA would pay for transit projects that improve a city’s “livability.”

Some of the criteria include economic development and improvement to the quality of living in the area where the project is built.

The Charlotte Area Transit System believes the planned 10-mile streetcar line would meet those requirements.

The FTA said it would spend $125 million on transit projects such as streetcars and bus rapid transit projects, as well as $150 million for bus projects. The most any one project could receive is $25 million.

The federal government said it will award the grants in early 2010.

But that timetable may make it difficult for Charlotte to qualify because design work on its streetcar only recently started.

The Charlotte City Council this fall voted spending $4.5 million to design part of the line. Democrats who supported spending the money said it was needed to get the $450 million to $500 million project ready for possible federal funding.

Charlotte Mayor Anthony Foxx, who supported spending the money to design the streetcar, said last week he is encouraged by the federal government’s announcement.

The streetcar is planned to run from the Rosa Parks Transit Center to Eastland Mall, via Trade Street uptown. The streetcar is different from the light-rail line in that it runs in mixed traffic and must wait at traffic lights with cars.

Charlotte won’t be able to get grant money to pay for engineering work, said Paul Griffo, a spokesman for the U.S. DOT. The grants can be used only to build new systems, buy land or trains or buses.

It’s possible Charlotte could create a plan to build a small piece of its streetcar line, allowing it to apply for a grant.

John Muth, interim chief executive of CATS, cautioned: “What realistically can you do for ($25 million)?”

It’s unclear how CATS and the city will pay for the line. Foxx has opposed raising property taxes to build it.

Charlotte Home Values on the Rise

Home prices rose for the second consecutive quarter in all but two of the regions tracked by Freddie Mac.

Nationwide, the average quarter-over-quarter increase in third-quarter prices was 0.9 percent. The 0.9 percent rise in prices followed a revised 2 percent increase in the second quarter.

Prices in the South Atlantic region, which includes the Carolinas, rose 1.1 percent. The Pacific region saw quarterly prices increase 3.9 percent, the biggest gain in the nation.

Prices in New England and the Mountain region declined.

“The lowest fixed-rate mortgage rates in a half century, lower house prices, incentives to encourage first-time buyers and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes,” says Freddie Mac (NYSE:FRE) Chief Economist Frank Nothaft.

Nationwide, third-quarter home prices were still down 3.9 percent from the same quarter a year earlier.

The latest local figures, compiled by the Charlotte Regional Realtor Association, show that the number of home closings in the Charlotte market rose 13.6 percent in October from September.

However, the average sales price dropped 9.5 percent.

The market saw 2,210 closings in October, up from 1,945 in September, according to the Realtor association. The average sales price dropped to $196,204 from $196,760 in September.

Closings were up and prices were down from a year ago.

October’s closings rose 19.6 percent from the 1,848 total a year earlier. But the average sales price fell 9.5 percent from $216,777 in October 2008.

The average listing price of houses sold in October was $218,050, down less than 1 percent from the previous month. The average listing price was $237,436 in October 2008.

Living in Windsor Park Can Make You Rich

Living in the moderately priced Windsor Parkk neighborhood in Charlotte, NC can help you build personal wealth. Check out the following article by financial writer, Liz Pulliam Weston that highlights how among the most important decisions you can make on your way to real wealth is choosing the right neighborhood — but it’s not the neighborhood you might think.

The neighborhood you choose can have a powerful impact on how rich you become and how wealthy your children will be.

But the link between where you live and how much you’re worth may be different than you expect.
So says wealth myth buster Thomas J. Stanley in his new book, “Stop Acting Rich . . . and Start Living Like a Real Millionaire.” Stanley is on a mission to change how Americans view money, starting with the blockbuster he co-authored in 1996, “The Millionaire Next Door.”
Too many Americans are what Stanley calls “aspirational spenders” — people who spend money to make themselves look richer or more successful than they are.
But their “hyperconsumption” effectively torpedoes any chances they would have at accumulating real wealth, which typically requires spending significantly less than you earn and investing the difference.
In his latest survey of millionaire and nonmillionaire households, Stanley ranked more than 200,000 U.S. neighborhoods for wealth, then followed up by surveying select households, more than half of which were millionaires, which Stanley defines as having $1 million in investments, excluding their homes.
Here’s what Stanley found:
The neighborhood in which we live influences a lot of our spending. The more expensive the house, the bigger the mortgage tends to be, and the more we’ll spend on heating, cooling, insuring and maintaining the place.
But we also feel pressure to match our neighbors’ spending on cars, vacations, furnishings and other trappings.
The “keeping up with the Joneses” mentality means the fancier the neighborhood, the less wealth we may accumulate, Stanley said. The opposite is also true: When our surroundings are more modest, we tend to spend less, regardless of our incomes.
“The propensity to spend,” Stanley said, “is directly related to the typical home price in that neighborhood and to the price you paid for the house.”
Interestingly, most of the people Stanley surveyed who lived in $1 million-plus homes weren’t millionaires.
“They may have a big mortgage,” Stanley said. “They don’t have a lot of money.”
In fact, Stanley found that three times as many millionaires live in homes worth $300,000 or less than live in homes worth $1 million or more.
“People who have a tendency to accumulate wealth live in neighborhoods that are easy to live in,” Stanley said. “That’s a hallmark of an accumulator.”
Whom you hang out with matters. The ideal neighborhood, Stanley said, would be populated with engineers and teachers, two professions he found were associated with higher-than-expected levels of wealth accumulation.
Educators were especially good at turning sometimes below-average incomes into above-average wealth, something Stanley — a university professor for 20 years — credited to the culture in which they work. Frugality and saving for the future are valued in many teaching settings, he said, and that culture can have a profound effect.
“Work with frugal people, and you may become frugal,” he writes. “Associate with colleagues who are astute investors, and you may become wealthy one day.”
Our neighborhoods influence our kids’ future wealth accumulation, too. Stanley asked his survey respondents a simple question: Growing up, were they better off or worse off financially than most of their neighbors?
People who perceived their childhood family’s income as below the average for their neighborhood tended to become aspirational spenders and below-average wealth accumulators, Stanley said. They spent more to compensate for childhood feelings of somehow being “less than” their neighbors.
“They said things like, ‘I went to high school with kids who had a lot more money,’” Stanley said. “They’re making up for that scar.”
By contrast, those who felt their families were in the upper half of their neighborhood’s wealth hierarchy were more likely to be accumulators, rather than spenders.
“They’re not looking for ways to consume to make up for the past,” Stanley said.
Most millionaires have just one house. Many people associate a second or vacation home with having arrived. In Stanley’s surveys, though, 64% of millionaires had never owned a second home. The net worth of second-home buyers at the height of the real-estate boom was actually considerably lower: a median of about $380,000, Stanley estimated.
Houses cost a lot to run and maintain. Stanley postulates that money-savvy millionaires find one home to be enough and prefer not to pour money into a property they may not use often — or might feel pressured to use more often than they want to.
A mere recession won’t change Americans’ spending habits. Actually, this wasn’t a survey finding but is Stanley’s own assessment of the long-term impact of the Great Recession on our likelihood of accumulating wealth.
Yes, people have cut back their spending because of job losses, less access to credit and the desire to build up savings, Stanley said. But that cutback is likely to be reversed as the economy improves, he said.
“It’s not going to change the fabric of people,” Stanley said. “Our whole (economic) structure is based on hyperconsumption.”

Charlotte NC Area Home Prices Post Another Increase

From the Charlotte Observer:

Charlotte-area home prices logged another increase in July, the fourth monthly gain this year, according to a closely watched index released today.

Area sales remain in negative territory compared with a year ago, but rose .06 percent from June to July, according to the S&P/Case-Shiller Home Price Index. That’s the same as the revised monthly uptick for June, continued evidence of a slowly stabilizing housing market.

The broader index of 20 metropolitan areas also has been improving.

“We now seem to be witnessing some sustained monthly increases across many of the markets,” said David Blitzer, chairman of S&P’s index committee. But, he cautioned, downsides remain.

The first time homebuyers tax credit, which has fueled sales this year, expires Nov. 30. Blitzer also warned about the impact of “anticipated higher unemployment rates and a possible increase in foreclosures.”

Home prices and sales are still way off their highs, locally and nationwide, but the latest Case-Shiller reading is among the growing signs of improvement.

The index is especially meaningful because it tracks repeat sales of existing houses, the most precise broad measure of how home values are holding up. Charlotte’s prices held up longer than most markets but in April 2008, turned negative.

This March, Charlotte saw a tiny gain, followed by an April decline and now three consecutive months of gains. Those gains have narrowed the area’s price decline compared with a year ago to 9 percent. That’s the fifth-smallest of the group.

Compared with a year ago, all 20 markets remain down, although Cleveland and Dallas are nearing a positive reading. And 18 areas, including Charlotte, saw a monthly gain in July. Las Vegas remained in last place, with a 31.4 percent decline from a year ago.

Charlotte-Area Home Prices Creep Up

From the Charlotte Observer:

Charlotte-area home prices continued a slow creep upward in June, according to a closely watched index released this morning.

Area sales prices remain in negative territory compared with a year ago, but rose .7 percent from May to June, according to the S&P/Case-Shiller Home Price Index. While that was down slightly from the previous month’s uptick, it was the third monthly gain in four months and further evidences prices are stabilizing.

The increase comes as the broader index of 20 metropolitan areas also has been improving.

“For the second month in a row, we’re seeing some positive signs,” said David Blitzer, chairman of S&P’s index committee, adding “there are hints of an upward turn from a bottom.”

Home prices and sales remain well of their highs, locally and nationwide, but today’s Case-Shiller reading adds to a growing list of small improvements.

The index is especially meaningful because it tracks repeat sales of existing houses, the most precise broad measure of how home values are adding up. Charlotte’s run of rising values outlasted the 19 other markets for a long time. But in April 2008, the region turned to losses. This March, Charlotte saw a tiny gain, followed by an April decline and now two consecutive months of gains.

Charlotte’s prices compared with a year ago also improved, moving out of double digit losses, to a 9.6 percent decline. That remained the fifth smallest decline of the group.

Compared with a year ago, all 20 of the index’s markets remain down. But 18 areas had positively monthly gains in June, up from 13 in May. Phoenix, long the most depressed market, saw a monthly gain. Las Vegas registered the biggest monthly loss, which pushed it into last place, with prices down 32.4 percent from a year ago.

Windsor Park Homes Selling Fast

Charlotte, NC’s hidden gem of a neighborhood, Windsor Park, is a hot real estate market. Check out this article from the Charlotte Observer that describes the speed of real estate sales at this price point.

Bargain houses selling as others keep sitting:
Homes under $100,000 double share of market

Single-family homes under $100,000 have accounted for more than one in six Charlotte-area sales this year, almost double the rate before the downturn.

Some of these deals are older houses and rural properties, which are often less expensive. Other homes have fallen below $100,000 amid a weak market that’s pushed prices down. And a major driver of the low-end increase is foreclosures and distressed sales, more common among lower-priced houses.

The erosion of property values pains the broader community, driving down neighbors’ home values and property tax revenues. But it also means bargains for buyers. And reducing inventory at all price levels is a necessary step toward a housing recovery.

“These distressed properties have to get moved at some point,” said Matthew Martin, an economist and head of the Federal Reserve in Charlotte. “It will help the healing process in the market.”

Rising low-end sales during the second quarter helped give the region its best spring bounce from the winter doldrums in three years.

Jeffrey Hood, 25, and his fiancee Samantha Lear, 23, offered less than $100,000 last week on a four-bedroom east Charlotte house that sold for $175,000 in 2007. The house fell into foreclosure in January. The couple, who plan to wed next year, also expect to qualify for the $8,000 first-time homebuyer tax credit.

“We’re tired of renting, just giving money away,” said Hood, a maintenance mechanic for Carolinas Medical Center. “With the market being down, it’s a good time to buy.”

Sales at the very low end began gaining market share late last year as total home sales dropped sharply, according to Market Opportunity Research Enterprises. So far this year, single-family sales below $100,000 accounted for 18 percent of deals in the eight-county area, according to an Observer analysis of the Rocky Mount firm’s data compiled from court records. That’s double the 9 percent market share in 2006 and 2007.

About 40 percent of the area’s low-end single-family sales this year were in Mecklenburg County. Throughout the eight counties, nearly all were existing homes, not new construction.

The MORE Report, one of the most precise measures of the eight-county region’s home sales, doesn’t track which sales are foreclosures.

But an Observer analysis of Mecklenburg County data found about two-thirds of homes that sold for less than $100,000 this year had fallen into foreclosure during the last 18 months. That compares with about one-fifth of all county sales, based on data available from the county last week.

“Lower-end sales and foreclosures are absolutely driving the market,” said Joe Clorite, a Keller Williams Realtor in Charlotte.

“The magic number” for hot properties is $90,000 to $125,000, said Brenda Goddard, an Allen Tate Realtor, who represents Hood and Lear. “Everybody is looking for the biggest amount of bang for their buck, and those bargains are out there.”

And that means first-timers, newcomers, investors and other bargain hunters competing for the deals.

“When we see a house that we like, you don’t have time to think about it,” said Hood, whose current offer is his fourth. “You either move on it or somebody sweeps in and gets it.”

David Forker moved to Charlotte in January, not long after retiring from a 20-year career that began with mopping floors for a grocery chain and ended as a store manager. Forker, now 50, plunked down $72,000 cash for a house in northwest Charlotte.

The three-bedroom house had sold new in 2001 for $109,500, fell into foreclosure in 2006, resold for $91,000 and foreclosed a second time last fall, according to county records.

Forker has been a homeowner since shortly after graduating college and a saver, socking away enough money to retire two years ago. He worked in Virginia, tried living in West Virginia, but wanted something different. His research led him to Charlotte.

“Charlotte was the most affordable place to live. I got a great bargain,” said Forker, who also was drawn as a Panthers football fan and theater lover.

Real estate investor Kevin Brown moved from Florida to an uptown Charlotte apartment two years ago. He says he bought 20 single-family houses this year alone, most under $100,000.

“It’s been nice,” he said. “I can buy my properties 40 to 50 percent off their values.”

Brown, who is 32, began investing in lower-end houses in South Florida six years ago. He wanted a different lifestyle, so he researched cities across the country. Charlotte’s housing market looked more stable and profitable than other places like California and New York. He moved after selling all but two of his Florida properties.

Brown rents most of the houses, and says he does background checks on tenants before letting them move in. Business has been “pretty lucrative so far,” but he declined to say how much he is making.

Also, about once a month Brown buys a house, fixes it up and sells as fast as he can.

“I like flipping houses,” Brown said. “The rental business can be kind of boring.”

Charlotte-Area Home Prices Post Solid Gain

From The Charlotte Observer:
Charlotte-area home prices posted their best monthly gain in a year in May, based on results of a closely watched home price index released this morning.

Area sales prices remain in negative territory compared with a year ago, but rose 0.9 percent from April to May, according to the S&P/Case-Shiller Home Price Index. That was the second monthly gain in three months and was almost as big as the monthly rise in May 2008. The increase comes as the broader index also has been showing signs of improvement for several months.

“This could be an indication that home price declines are finally stabilizing,” said David Blitzer, chairman of S&P’s index committee.

Compared with a year ago, Charlotte-area prices remain down 10 percent, but that’s a lot better than some of the 20 urban markets tracked by the index.

Charlotte Home Closings and Prices Up

From the Charlotte Business Journal:
The number of residential real estate closings in the Charlotte market rose 5.9 percent in June from May, and the average sales price increased 9.8 percent.

There were 2,024 closings in June, up from 1,912 in May, according to the Charlotte Regional Realtor Association. The average sales price rose to $218,728 from $199,243.

Closings and sales prices are down significantly from a year ago.

Last month’s closings fell 26 percent from June 2008, when there were 2,734 closings. The average sales price dropped 6.4 percent from $233,670.

The average listing price of houses sold last month was $244,316, down 1.5 percent from June 2008. The average listing price in June rose 9.3 percent from $223,470 in May.

Charlotte NC Became 18th-Largest US City in 2008

From Charlotte.com

The city of Charlotte was the nation’s 23rd fastest-growing city for the year ending in July 2008, and is now the county’s 18th-largest city, according to Census estimates released Wednesday.

For bragging rights, Charlotte has passed Memphis, Tenn., in population. The Queen City has 687,456 people – up from 570,091 at the start of the decade.

The estimates don’t cover fall 2008, when the recession deepened and hit Charlotte in full force. It’s possible that next year’s growth numbers will be smaller. Mecklenburg County’s unemployment rate is now 11 percent, a few points higher than Wake County’s rate of 8.6 percent.

“The story will likely change over the next year,” said Mark Vitner, an economist at Wachovia, now part of Wells Fargo. “Since these numbers came out, the economy has weakened considerably.”

Vitner said he expects Charlotte to still grow in the next year, though at a smaller pace. It’s possible, he said, that the city may lose some newcomers to outlying areas, as people pinch pennies and look for cheaper housing.

“I suspect we’ll find more people looking for affordable places to live,” he said. “It’s typically more expensive to live in a city than in an unincorporated area.”

Charlotte’s growth has been fueled by the city’s strong economy for much of the decade, with areas near the central city being redeveloped with new housing. The city’s growth is also helped by N.C.’s liberal annexation laws. In many cases, Charlotte has grown by annexing outlying communities to capture their tax base.

If Charlotte continues to grow as the city has this decade, it may pass the population in cities such as Columbus, Ohio; Indianapolis and Jacksonville in the next 10 years.

Cary was the nation’s third-fastest-growing city in the past year, at 6.9 percent. Raleigh was eighth (3.8 percent) and Durham was 16th (3 percent).

New Orleans was the nation’s fastest-growing city, at 8.2 percent. It now has 311,830 people, up from 210,768 in 2006 following Hurricane Katrina. The pre-storm population of the city was 484,674.

These Census estimates are only for individual cities, and not metro areas. The six-county Charlotte metro area has a population of 1.7 million.