Charlotte Foreclosed Homes Drag Down House Prices
November 27th, 2009 by 
wsummers
Charlotte foreclosed homes helped push total homes sales up in October, but they dragged down house prices, according to the Charlotte Regional Realtor Association.
A total of 2,210 single-family houses, townhouses and condo units were sold in October, marking an increase of almost 20 percent compared to total home sales in October last year and marking the first time home sales climbed up on a year-over-year basis since February 2007.
Because of the depressed prices of foreclosure and distressed sales, the average price of homes sold in October plunged to $196,204, a drop of 9.5 percent. According to housing analysts in Charlotte, the free fall of house prices and home sales in the metro area began when Wachovia collapsed and closed its operations in Charlotte, starting the spiral of job losses in the metro area.
But in October this year, the combination of several factors such as low mortgage rates, sharp home price discounts, the November 30 expiration of the federal tax credit and the surge in fence-sitting prospective homebuyers suddenly wanting to enter the housing market pushed home sales up.
According to Chris Cope, head of Charlotte real estate company Allen Tate Mortgage, mortgage closings soared in October largely because of home buyers who wanted to beat the November deadline of the tax credit.
With the expansion and extension of the tax credit, realtors expect more Charlotte foreclosed homes to get sold. Realtor Brandy Gaiser, who has been selling bank foreclosure homes since 2001, said that any foreclosed house priced below $200,000 is being snapped up quickly by buyers.
But both realtors and mortgage brokers have observed that even higher-priced foreclosed homes are now starting to sell more quickly. Gaiser said that she has just signed a contract for a property priced above $600,000.
Mortgage consultant Bill McConnell meanwhile said that he is reviewing two mortgage applications for home loans amounting to $600,000 each and home builder Ellen Smith is closing on a house priced above $800,000 and another for almost $1 million.
In a report by another real estate research agency, it was shown that the metro area of Charlotte, Concord and Gastonia had 1,265 foreclosure postings in October, an increase of more than 5 percent compared to filings in October last year. Statewide, foreclosure filings increased by more than 7 percent to 3,447 filings.
