[ Article from The Charlotte Observer ]
After roughly four years of wallowing in the doldrums, the Charlotte-area housing market is showing new signs of life, local agents and experts say.
Sellers are starting to get multiple offers again. Buyers are losing their top picks. Some condo projects that sat empty during the recession are selling out.
No one suggests the heyday will return anytime soon. Prices are still struggling and are expected to drop again this year. Thousands of distressed homes are sitting on the sidelines, either owned by banks or mired in the foreclosure process.
Still, agents say, they are showing more units and writing more contracts than in the past two years. They say buyers are starting to offer more, just as sellers are becoming more realistic in their prices. The result: Sellers are getting a greater percentage of what they are asking.
In February, Charlotte-area buyers paid an average of 90 percent of the listing price, up from a low of 87 percent last year and the highest since 2008, according to the Carolina Multiple Listing Services. Before the real estate bust, buyers typically paid around 95 percent of the listing price.
“It shows me homes are being priced correctly, and it also shows me buyers are willing to pay,” said Jennifer Frontera, president of the Charlotte Regional Realtor Association. “It’s a sign things are getting better.”
Homes that are getting the most interest are those that have been well-taken care of, are staged well, are in sought-after neighborhoods, and are “properly” priced, which may be between 10 percent and 30 percent below the peak, agents say.
The Charlotte housing market has shown fits and starts before. But agents and experts believe this increase is sustainable. They credit rising consumer confidence, pent-up demand, historically low interest rates and a shrinking supply of homes.
Nationally, Realtors’ confidence in the single-family home market hit a four-year high in February, according to a survey of 4,300 agents by the National Association of Realtors.
Real estate agent Megan Triplett with Allen Tate Realtors said her office in Gastonia started buzzing in the beginning of February.
She declined to share specifics, but said her sales activity has doubled over what it was this time last year. She said one house that has sat on the market for nearly a year recently received four offers within a week and has since sold. Previously, the house had received only one offer, which was for half the $235,000 listing price. The recent offers are closer to the listing price, Triplett said.
“Previously, we saw ugly offers. It was insulting to sellers and lowered morale,” she said. “Buyers aren’t bottom feeding anymore. It’s exciting again.”
One Friday last month, Charlotte real estate agent T.J. Larsen found a home for sale that he wanted to show to his client. But by the time they tried to see the Myers Park property the following Monday, the $1.8 million house had sold.
The same thing happened a week later with a different client. Larsen spotted a listing for a home priced for $425,000 in the Elizabeth neighborhood in the morning, and by the time he tried to make an appointment that evening, the house was under contract.
“I’ve got to start sharpening my teeth with my response time and how aggressively I go after getting appointments,” said Larsen, owner of My Townhome Realty and Maison Properties. “Over the last four years, one tactic was to delay and not show you were that interested. You could do that in a slow market. You can’t do that anymore.”
Retiree Terry Holland and his wife Kris were surprised by the competition when they were house hunting earlier this year.
The couple lost a condo to another buyer. Then, during the drive to a showing for a house, their real estate agent got a phone call saying that house had just sold.
“We were kind of surprised at how quickly some of the properties that we had our eye on did move,” said Holland, who moved to Charlotte from Dallas to be near his four children and five grandchildren. “We learned within a relatively short period of time, if we see something we like, we better move on it.”
They recently closed on a 2,400-square-foot home with a yard and downstairs master bedroom off Providence Road in south Charlotte, paying in the mid-$200,000s. Holland said he feels it’s a great time to be a buyer because interest rates are low and home prices are off their peaks.
In Charlotte, the average sales price for all homes in February was $184,775, according to the Carolina Multiple Listing Services. That’s down nearly 16 percent from $219,515 in February 2007.
Pat Riley, chief operating officer with Allen Tate Company, said the market is benefiting because sellers are more realistic about what they may get for their home.
Companywide, Allen Tate’s sales between January and March 23 rose 37 percent to 4,023 units, up from 2,900 units sold during the same time last year.
“We were gummed up the last couple years with a lot of people that were wishing and dreaming,” Riley said. “Now we have a much more motivated seller than before, and a more educated buyer and seller.”
Still, Charlotte-area home prices will likely fall another 2 percent or 3 percent this year because new foreclosures are expected to hit the market and homebuilders are starting to build again, boosting supply, he said.
Riley expects prices to stabilize in 2013 and start appreciating at a rate of 1 percent to 3 percent a year. Some experts don’t expect housing prices nationally to return to pre-recession levels for another 10 years.
2 offers in 2 days
Charlotte real estate broker Andy Pressley said he averaged two dozen deals a year during the boom days then slowed to about one dozen in recent years. He said he’s already closed a dozen transactions in the last three months, including selling some houses “I thought would never sell.”
“There was literally a light switch that went on at the end of the year,” said Pressley, president of MECA Properties. Recent buyers include a young couple who moved here from Florida and a retired couple in San Diego who wanted a second home close to grandchildren.
Pressley listed Craig Brown’s duplex near Johnson C. Smith University for about a year without any nibbles from prospective buyers.
“Nothing happened and nothing happened, and then I get a phone call and I get two offers on it in two days,” said Brown, who is with a local real estate holding company. Priced at $55,000, the property sold for $47,500 in cash and closed within two weeks. Brown said he sold a similar property a year and a half ago for less.
“I’ve got to believe it’s all a good thing,” Brown said. “The market’s been so soft for the last three or four years, maybe they are turning some of these things around.”
Wells Fargo senior economist Mark Vitner said the market is improving for nondistressed properties. The number of homes available for sale on the market has been shrinking, to 8.9 months of inventory in February, down from 12.4 months’ supply the same time last year, according to MLS. A healthy market is thought to have about 6 months of inventory on the market.
This inventory does not include shadow inventory – the term for homes that are crawling through the foreclosure process, properties that have been foreclosed on but not put up for sale, or houses whose borrowers are so delinquent they are unlikely to recover. An Observer analysis found the Charlotte area had 16,800 distressed properties not counted among homes for sale in October, more than double the 7,887 homes on the market. It’s widely believed those properties will depress prices, delaying a full recovery.
Vitner said more of the distressed properties coming to the market have been vacant longer and have significant maintenance problems. Such sales can also take longer and require more paperwork.
“For buyers wishing to avoid the hassles of buying a distressed property there simply is not much out there to chose from, which is why properties are getting multiple offers,” Vitner said.
Frontera, the local Realtor association president, said she expects the market, and home prices, to see some small dips this year. But overall, she said, she believes the market is gaining strength.
”I don’t think (a recovery) will be a straight shot up. I think we’re building everything back,” she said. “Everything fell apart. We’re putting the pieces back together.”