Share
Amy Spurlock listed her Cornelius home for $220,000, what seemed to be the going rate in her neighborhood six months ago. Then the foreclosures started.
“Houses around here started getting foreclosed,” she said. “That lowers everybody.” She soon dropped her price about 14 percent – to $189,000.
As the Charlotte-area housing market continues to struggle, sellers increasingly have to drop their prices to make a sale. Last May, the average difference between the listing price and the selling price was about 6 percent. This May, it was about 11 percent.
Beginning last September, when the economy began its nose-dive, the numbers imply that sellers have started to shave asking prices in order to make a sale.
“That's part of people coming to the reality of how much their house is really worth,” said real estate broker Jeff King, who works mostly in NoDa and Midwood in central Charlotte. “People are used to the value going up every year. They're having a hard time adjusting to the fact that it might be worth less this year.”
He said that while there's always been some disconnect between what sellers thought their homes were worth and what buyers were willing to pay, the downturn has exacerbated it.
Area sales prices dropped 10 percent in April compared with April 2008, according to the S&P/Case-Shiller Home Price Index released last week. It marks the Charlotte region's worst month for home sales prices since the downturn began, but the drop is still less severe than many of the 20 markets measured by the index.
For the first part of 2008, homeowners were still able to put homes on the market and sell them for close to the asking price. It wasn't until September that the bottom dropped out, UNC Chapel Hill professor Roberto Quercia said. “Early last year was a different mindset,” he said. “People knew the market was softening up, but they didn't know there was a crisis.”
In September, big economic news began putting people on edge. It put uncertainty over major banks, including Charlotte-based Bank of America and Wachovia, two of Charlotte's largest employers.
Fannie Mae and Freddie Mac were seized by the government, Bank of America snapped up Merrill Lynch, Lehman Brothers filed for bankruptcy protection, AIG got an emergency loan and Wachovia was acquired by Wells Fargo.
Now, as Charlotte continues to struggle with layoffs and pay cuts, home sellers are becoming less optimistic.
Sellers of more expensive homes are coming off their asking prices as they find the market nearly saturated.
The number of homes selling for at least $1 million could satisfy demand for 10 years, said broker Lars Hedenborg. There are about 1,200 on the market, he said; it's a good month if six or eight are sold.
“A lot of people hold onto the fact that Charlotte was a strong market two years ago,” Hedenborg said. “Charlotte was doing (better) than most of the country. It takes time to turn.”
Jim Sudderth's Dilworth home has been on the market for a year. Originally listed at $2.1 million, it's dropped about 5 percent, to $2 million. “It's horrible,” he said. “There aren't buyers.”
Some may decide to ride out the market. Spurlock, in Cornelius, said she won't go any lower: “I'm not going to give the house away.”
