Is the Charlotte Housing Market about to Burst?

[Short Sale Pro]

I don't think so.  Most of the time areas or cities that go through a Real Estate Bubble Burst is when homes appreciate too fast. 

Like here in Charlotte the appreciation rate has been consistantly 4% for the past 5 years.  At that appreciation rate there is no real risk of a bubble.  Anytime houses in a city as a whole appreciate at alarm rates of 10-20% per year, then you can count on a bubble burst because once the prices rise so high, people are no longer willing to pay.  So potential buyers will become long term renters until the market adjusts.

Massive job lost in an area can cause a real estate bubble to burst.  When you have a lot of good paying people out of work, that can send the employment statistics into shock.  I am talking about 1000's of people out of work.  It will be hard for most of them to find a job paying what they were used to making which can cause foreclosure.  A number of foreclosures and vacant houses can burst the bubble when consideration large scales.

As long as Charlotte doesn't have massive job losts and the AG can keep a lid on scamming realtors, fake appraisers and mortgage broker fudging financial statement for loans, we should be just fine.

[debtbubble]

I would respectfully disagree.  The housing bubble across the country is not a cause for economic problems in other places in the country.  Americans have short memories... we have all received massive amount of credit card solicitations and many other offers to borrow money including crazy mortgages. The housing bubble as well as the Nasdaq bubble were not causes but rather symptoms of a DEBT bubble. This debt bubble is actually international in scope.  People have borrowed themselves silly.  This causes inflation or rising prices.  When the credit is pulled away we are going to have big problems. The dollar is falling causing the rise in the cost of living. My expectation is anything that has been bid up due to debt is going to fall.  As far as housing... everyone who wanted a house has one (there are no qualified buyes left) Charlotte is not immune to this fact.
IF the credit is not pulled away the dollar will continue to fall and the cost of living will skyrocket making it harder and harder to pay the mortgage.  Think back about all the people who tried to loan you money the past 7 years. The DEBT bubble is imploding and some people are in denial.

[Short Sale Pro]

Well Debt bubble you are partially right.  Overextending credit is a number one kicker for most people, but to add what you are saying.  When does over extending your credit cause a homeowner to go into default?  There are a few ways that i can think of right now and that is a homeowner with an adjustable rate mortgage. 

When bills are paid on time to due to being overfinanced then i can see some owners going into default.  Because late payments never look good on a resume when you go to refinance to a fixed rate.  Which can cause a bubble to burst especially when you have majority of owners with subprime mortgages and are over extended. 

I still believe Charlotte shouldn't be a problem for a bubble burst for the simple fact prices have not risen drastically.  If you look in most markets that had a bubble burst, it was because of inflation.  Not some bad loans.  You had scamming realtors, mortgage brokers and appraisers, inflated values on properties.  And neighbos selling their homes relied on those fluffed comparables to sell their home, next thing you know the value has risen so fast that no one else is willing to buy a house because it is cheaper to rent. 

Let us know your definition of a real estate bubble burst.


Also i stated that economic factors on a large scale can cause a bubble to burst.   

[debtbubble]

I understand what you are saying.  If prices never went up drastically then how can they come down drastically.  I recently moved here from Southern California so I understand the concept real well.  I am also from Cleveland Ohio a city that leads in foreclosures for different reasons.
People generally have short memories. I am a financial planner and have been for 10 yrs. Is it a coincidence that we had the largest stock market bubble followed shortly by the largest housing bubble in history? or is there something more to it? The stock market and real estate market both went up due to excessive credit. They were not causes but rather symptoms of a debt bubble. Think of the amount of credit card solicitations everyone has received during this same time. This credit has created malinvestment or in other words distortions in the economy. Why do we suddenly have super walmarts and giant Loews stores on every block? The credit is now going to shrink in its availability and the distortions will be fixed.  Unfortunately, this will be a painful exercise with job losses.  Excess credit also causes rising prices. Look at the cost of living.. gasoline, commodities, health care, food, energy.  These rising prices will bite into the family budget and the people are already up to their eyeballs in monthly payments.  Rising costs of living will mean less income can be put towards housing. New buyers are not going to support the prices in other words. Charlotte is not immune to this regardless of not having experienced insane inflation in housing the past few years.  I agree with you that some places will do better than others but in a relative way.  This is one reason I moved here. However, people are in denial about what is happening or don't understand it.  Which is why I have dedicated my business to helping families get out from underneath their debts. Everyone in Charlotte knows someone with a debt problem. The borrowing cannot continue and the debts have to be repaid before we experience real growth again. This cannot be fixed in a matter of months and will take some time to rectify.

[debtbubble]

Looking at this again I guess I didn't respond well to the question.
Housing prices in Charlotte.... will they go down?  Certainly not like Southern California.. that whole state is one big financial fraud.  However, yes I see pricess going down to year 2000 prices. Some don't feel this is possible.. but think of Japan with their debt bubble of the late 1980's. Heavily poplulated country yet real estate fell for 14 yrs in a row. We will go back to prices that were around prior to excessive credit being created. What will this do to people with equity lines of credit now? Many factors will cause this drop in price but for example the people from New England are not going to becoming here with the money to bid up prices for example.

[debtbubble]

One more thing.... and I am truly sorry to keep posting but I like the topic. Besides my post the only other two messages are ...1.) someone getting foreclosed on  2.) Someone who can't sell their house.  What does that tell you?
The world has changed and now it is time to get out of debt.

Debtbubble

[Short Sale Pro]

Excess credit also causes rising prices.

I have to agree with you on the excessive credit deal.  I want to also add that easy credit is causing most of the financial downfalls you are seeing aka A.R.M.'s aka flex options and such.  you are right once credit becomes something you have to work hard for prices will start to stablize.

There are some areas around Charlotte that are starting to slip as far as prices but that in my opinion is because of some apple to oranges appraisals.  When the interest rates start to rise then prices will tend to lower in transitional neighborhoods, meaning what you can afford today because of easy credit might knock someone into a lower priced home when rates rise.


Its good to have you on board once things get moving around here you will be able to use your signature to market you business and establish yourself as the authority in your line of work. 

Continue to post and tell your family and friends about the forum.

[Credit-consultant]

The Housing market here in the Carolinas is one of the best in the country.  The only place that is doing better than we are is Seattle Washington.  We are holding steady and our foreclosure rate is not as high as other parts of the country.  Altough I can tell you from being in the Credit Industry and advising people daily regarding their credit that home builders are feeling the effects of building more homes than they have buyers willing to purchase.  It all goes back to the adverse effect of bad credit and not having the score that is needed by the lending institutions to obtain financing for homes with decent interest rates!

[Short Sale Pro]

Well the Charlotte market is following the country in a downwind spiral.  According to Carolina Homes Charlotte home prices dropped 29% in July and the amount of homes sold dropped 25%.  Well well, well things are starting to cool down which means homeowners will be looking for creative ways to sell their homes, because Charlotte has 31,000 houses on the market and only 10% are selling.  Not the kind of trend we were hoping for.