Interest rate worries cited as major factor
Interest rate worries cited as major factor
Allen Tate Realtor Sandy Kindbom negotiated three residential real estate contracts in one week last month.
That didn’t happen in 2010.
For Kindbom, it’s a hopeful sign that 2011 will be the year when — finally — Charlotte’s real estate market begins to climb out of the ditch.
“We are having a really, really good start,” she said. “January and February have been dramatically better than we have seen in several years. There’s just a much different vibe out there.”
Interest rates are one factor blamed for the uptick in Charlotte’s real estate market. Kindbom said offers on homes are increasing, partly because rising interest rates are motivating potential buyers who are worried that they’ll miss out on low rates, creating a sense of urgency in the market.
“Buyers are willing to make decisions,” she said. “Now things are selling … and we’re seeing people lose property they want. There are multiple-offer situations, and I think that is attributable to a general acceptance of what this market is.”
Dave diCecco, a Realtor with Coldwell Banker United in Charlotte, agrees that 2011 has begun on a positive note.
“I think the market is starting to slowly rebound,” he said. “Interest rates are going up, and buyers want to get in before they go up more. I’m looking forward to the spring selling season.”
Data compiled by the Charlotte Regional Realtor Association also supports the notion that the residential real estate market is slowly improving.
There were 1,414 residential closings in January in the Charlotte metropolitan region, up 3.7 percent from January 2010 when there were 1,363. February 2011 statistics were not available as of press time.
With 4,006 new residential listings reported by CRRA in January, it is a buyer’s market, and that is leading to some frustration among some Charlotte real estate agents.
“Buyers are aware of the buyer’s market, and buyers still think they can lowball these homes,” Realtor Rich Ferretti said. “If it’s priced right, that’s the right price. It doesn’t give you the right to come in $20,000 to $30,000 less.”
Still, Ferretti said he’s seeing a lot of activity in the market. He said he has listed half a dozen properties within the past two weeks or so and has some closings scheduled this month. It helps that interest rates are edging up but also that investors are seeing opportunities to buy rental properties in the Charlotte area, he said.
“People are looking and they want to take advantage of this,” he said. “I’m trying to stay positive. Our office is doing well.”
Builders get boost
Mike Wright, a broker with Matthews-based James Custom Homes, said the start of 2011 is encouraging.
Wright said JCH is building homes in the McKee Plantation neighborhood at Providence and Kuykendall roads in south Charlotte; in Hampton Oaks, also on Kuykendall in South Charlotte; and in the Ashton neighborhood at Old Providence and Rea roads in SouthPark.
Falling home prices have resulted in prices that are about as low as they can get, he said.
Homebuilders are getting a boost from homes that are sitting on the market for a long time, he said, adding that buyers think there must be something wrong with those homes. As a result, more buyers are considering plunking money down on a new house instead of an existing one, he said.
“Now if you have a good location and good school zones, it’s time to get moving because builders have homes so aggressively priced and interest rates are going up,” he said. “I think it’s a great time to buy new, because in a few years’ time the demand will come back. You can get a brand new house for a lot less than you will pay in two years.”
‘Not a lot of inventory’
The market for high-end homes is also improving, said Alan Simonini, vice president of Alan Simonini Homes in Charlotte, which builds homes on lakefront properties and in gated communities that feature golf courses.
Simonini, formerly of Simonini Homes, which is ceasing operations after 16 years, said the inventory of homes from $500,000 to $1 million has nearly been depleted.
“There’s not a lot of inventory left, if any,” he said. “The new-home market has not produced a lot of new homes in the last two years. We are seeing some opportunities there. It’s going good. There’s a lot of activity. There are a lot of people looking.”
ASH is focusing on communities where construction was stalled during the slumping housing market, he said.
“We’re getting them moving again,” he said. “We’re coming in with new plans, elevations and landscaping. There’s just a lot more interest than there was a year ago.”
ASH opened at the first of the year, and the company is already hoping to build about 10 homes in 2011. It is building in the Chrishall subdivision on Park South Drive in SouthPark and in the Charndon neighborhood on Sardis Road between SouthPark and Cotswold.
Rates expected to rise
Although many potential buyers are worried about interest rates rising, Charlotte-based LendingTree reported last week that rates fell from the week before. But LendingTree’s chief economist doesn’t expect rates to stay down for long.
Cameron Findlay said mortgage rates are hovering around 5 percent for a 30-year fixed-rate loan. But with government reform of Fannie Mae and Freddie Mac on the horizon, rates will likely rise, he said.
On Feb. 22, the average home loan rates offered by LendingTree network lenders were 5.16 percent for a 30-year fixed-rate mortgage, 4.37 percent for a 15-year fixed-rate mortgage and 3.87 percent for a 5/1 adjustable-rate mortgage.
On that same day, the lowest mortgage rates offered by lenders on the LendingTree network were 4.75 percent for a 30-year fixed-rate mortgage, 4 percent for a 15-year fixed-rate mortgage and 3.25 percent for a 5/1 adjustable-rate mortgage. The lowest rates offered fell one-eighth of a point from the week before.
Tara Ramsey can be reached at [email protected].