Business

Charlotte home prices slip for the year

Average Charlotte-area home prices have fallen for the first time over a 12-month period since 1991, figures released Tuesday show – and they might not have hit bottom yet, experts say.

Still, many remain optimistic, saying Charlotte's historically steady market, population growth and strong job outlook will help the city stay afloat in this increasingly sluggish economy. They point out that things are far worse elsewhere, with steep declines in urban areas nationwide.

Area prices dropped 0.1 percent in the 12 months through April 2008, according to the widely followed S&P/Case-Shiller Home Price Index, ending a three-month streak as the only one of 20 urban markets across the country still showing rising home prices.

Meredith Baker of Indian Trail has had to reduce the price of her three-bedroom house, which has been on the market since last July, she said. It's listed for $173,500 on Craigslist, about $10,000 less than originally priced.

The economy has made it difficult for would-be buyers to get loans, she said. The house was under contract at one point, but that fell through in late April, Baker said.

Now her family, which is building a house nearby, is living with her mother and might have to move back into the old house if it doesn't sell soon, she said.

“Whatever has happened with the market, that has brought us to this stumbling block,” Baker said. “We'd like to have this (new) home, but we're over and done. We have three children.”

The April figures show annual declines in the prices of existing single-family homes in all 20 urban markets measured, for an average drop of 15.3 percent versus a year ago. Thirteen of the 20 areas posted record drops, and 10 were in double digits.

Las Vegas and Miami, the two hardest-hit areas, dropped nearly 27 percent in the past year, the data show.

Some cities' indexes climbed slightly between March and April, including Charlotte's, which rose 0.2 percent.

“Charlotte is still holding up better than any other market,” Wachovia economist Mark Vitner said. “I think our economy is very resilient.”

Foreclosures and builders who need to get rid of their inventory – not to mention economic woes such as rising gas prices – had contributed to a steady month-to-month decline in Charlotte, with home prices dropping 3.6 percent since August, he said.

Prices will likely continue to fall, possibly to 7 or 8 percent, before things turn around, Vitner said.

That means homeowners should be ready to give up some price appreciation when trying to sell, he said.

“They should be cognizant that the market has changed,” Vitner said.

Charlotte has avoided the steep declines of other urban areas because it never experienced a sharp gain during the nation's real estate bubble. According to the Office of Federal Housing Enterprise Oversight, which evaluates a different pool of sales, Charlotte-area home prices gained more than 6 percent in the 12 months before March 31.

Closings last month were up 15.6 percent from April, according to the Charlotte Regional Realtor Association, but down 26.5 percent from May 2007. The average sale price for May was just under $224,000, down 3.8 percent from the year before, the group found.

Still, “if I had to be in real estate anywhere, I'd want to be here,” said Dot Munson of Re/Max Executive Realty, president of the Realtor association.

She expects further challenges this year and the beginning of next but said things would likely turn around by the end of next year.

In the meantime, people should be patient when trying to sell, said Munson, whose own house is on the market.

“The thing they've got to realize is that they're not going to make the money they would have made two years ago,” she said. “You've got to price it right. Anything will sell for the right price.”

Average Charlotte-area home prices have fallen for the first time over a 12-month period since 1991, figures released Tuesday show – and they might not have hit bottom yet, experts say.

Still, many remain optimistic, saying Charlotte's historically steady market, population growth and strong job outlook will help the city stay afloat in this increasingly sluggish economy. They point out that things are far worse elsewhere, with steep declines in urban areas nationwide.

Area prices dropped 0.1 percent in the 12 months through April 2008, according to the widely followed S&P/Case-Shiller Home Price Index, ending a three-month streak as the only one of 20 urban markets across the country still showing rising home prices.

Meredith Baker of Indian Trail has had to reduce the price of her three-bedroom house, which has been on the market since last July, she said. It's listed for $173,500 on Craigslist, about $10,000 less than originally priced.

The economy has made it difficult for would-be buyers to get loans, she said. The house was under contract at one point, but that fell through in late April, Baker said.

Now her family, which is building a house nearby, is living with her mother and might have to move back into the old house if it doesn't sell soon, she said.

“Whatever has happened with the market, that has brought us to this stumbling block,” Baker said. “We'd like to have this (new) home, but we're over and done. We have three children.”

The April figures show annual declines in the prices of existing single-family homes in all 20 urban markets measured, for an average drop of 15.3 percent versus a year ago. Thirteen of the 20 areas posted record drops, and 10 were in double digits.

Las Vegas and Miami, the two hardest-hit areas, dropped nearly 27 percent in the past year, the data show.

Some cities' indexes climbed slightly between March and April, including Charlotte's, which rose 0.2 percent.

“Charlotte is still holding up better than any other market,” Wachovia economist Mark Vitner said. “I think our economy is very resilient.”

Foreclosures and builders who need to get rid of their inventory – not to mention economic woes such as rising gas prices – had contributed to a steady month-to-month decline in Charlotte, with home prices dropping 3.6 percent since August, he said.

Prices will likely continue to fall, possibly to 7 or 8 percent, before things turn around, Vitner said.

That means homeowners should be ready to give up some price appreciation when trying to sell, he said.

“They should be cognizant that the market has changed,” Vitner said.

Charlotte has avoided the steep declines of other urban areas because it never experienced a sharp gain during the nation's real estate bubble. According to the Office of Federal Housing Enterprise Oversight, which evaluates a different pool of sales, Charlotte-area home prices gained more than 6 percent in the 12 months before March 31.

Closings last month were up 15.6 percent from April, according to the Charlotte Regional Realtor Association, but down 26.5 percent from May 2007. The average sale price for May was just under $224,000, down 3.8 percent from the year before, the group found.

Still, “if I had to be in real estate anywhere, I'd want to be here,” said Dot Munson of Re/Max Executive Realty, president of the Realtor association.

She expects further challenges this year and the beginning of next but said things would likely turn around by the end of next year.

In the meantime, people should be patient when trying to sell, said Munson, whose own house is on the market.

“The thing they've got to realize is that they're not going to make the money they would have made two years ago,” she said. “You've got to price it right. Anything will sell for the right price.”

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