Real Estate Agents in Charlotte

Their View of the National Real Estate Crisis and its Impact on the Charlotte NC market

2007 brought out some extraordinary events in a number of real estate markets around the country as well is in the mortgage industry.  While many markets have seen the "bubble" burst, several markets continue their slow and steady growth. Markets such as South Florida, Boston, and Las Vegas come to mind when you think about sudden and significant decreases in home prices.  These markets have seen double digit appreciation throught the last five to ten years so in the eyes of most real estate professionals, the day of reconing was inevitable.

Real estate agents in Charlotte NC have noticed a small slowdown in late 2007 as the real estate market reacted to national headlines as well as the foreclosure and sub-prime mortgage crisis that decimated the mortgage industry.  While "days on the market" averages have increased, home sale prices have remained steady and have even seen growth of approximately 3% in 2007.  Most industry experts expect the national real estate crisis to continue to worsen….in fact many predict a national recession may be the end result of the current slowdown.

So what impact is being felt in Charlotte NC?  Most real estate agents in Charlotte NC have run in to issues with client financing.  In the past ten years, just about anybody with a paycheck and a pen in hand could sign up for a mortgage and buy a home for 0%-5% down.  This lack of equity, or skin in the game, manifested itself and compounded as variable rate and front end loaded mortgages for sub-prime borrowers unlocked causing large increases in monthly mortgage payments.  With no equity in their homes and payments they could no longer afford, many homeowners moved out and were foreclosed on.  As defaults skyrocketed, small mortgage firms saw their investors withdraw funds and move them to safer, albeit, lower yield investments. In short, the "money well" dried up.  Big banks responded shortly thereafter and the mortgage crisis hit its crescendo.

As we enter 2008, most real estate agents in Charlotte NC will tell you that client financing is a 50/50 proposition at best.  More lenders are requiring higher credit scores and a lower Loan to Value (LTV) which in layman's terms means a higher downpayment.  Many buyers do not have 15%-20% to put down as a downpayment and subsequently they are unable to secure financing.  Home builders and sellers are getting creative in an effort to sell their property by offering large amounts toward their closing costs…often equating to as much as 5-8% of the purchase price.  

Another factor in play is that the mortgage crisis peaked at a time when most real estate agents expect the market to slow and soften.  As a result, as warmer weather and springtime approaches, most real estate agents in Charlotte NC expect to see activity pick up and homes spend less time on the market.

In closing, there is no doubt a national real estate crisis. It is serious and could cause long term effects on our national economy. However, real estate in Charlotte NC continues to be a sound investment and is one of just a handful or markets to appriciate in 2007.