Tuesday, January 31, 2012

Charlotte home prices fall

Home prices in Charlotte and other major cities fell again in November, reflecting how prices are still under pressure despite signs the overall housing market may be stabilizing, according to a report released Tuesday.

The Standard & Poor's/Case-Shiller Home Price Index, which measures home prices in 20cities, fell 1.3 percent in November from October and 3.7 percent from a year ago.
Prices in the Charlotte metropolitan area fell 0.5 percent from October and dropped 1.9 percent from November 2010, according to the index, which tracks repeat sales.

Nineteen of 20 cities saw prices decline on a monthly basis, with Phoenix being the only city to post an increase.

Atlanta continues to suffer among the most, posting a nearly 12 percent decline from November 2010.

Five cities, including Charlotte, however, saw their annual rates improve, even though home prices remain below last year's.

Economists and local real estate experts say they think area home prices will continue to fall this year and beyond.

That's because the market must cope with a large supply of available houses, including distressed ones. Foreclosed homes accounted for 20 percent of U.S. home sales between July and September, according to RealtyTrac. In a healthy market, foreclosures typically account for five percent or fewer of sales.

Additional pressure also comes from a looming amount of shadow inventory that could hit the market. Shadow inventory includes homes that are in the foreclosure process, likely to enter the foreclosure process or owned by banks but not on the market. These homes are not included in official inventory statistics.

Nationally, analysts estimate shadow inventory could range from 1.5 million to more than 6 million homes. An Observer analysis found Mecklenburg County had more than 16,000 homes in shadow inventory in October, compared to roughly 7,800 homes officially on the market.

"Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall," David Blitzer, chairman of the index committee at S&P Indices, said in a statement.

Overall, the index is down around 33 percent from its 2006 peak, and prices are close to those seen in mid-2003.

For more information go to: www.homeprice.standardandpoors.com

Charlotte foreclosure activity up but lower than rest of the country, new data says

Foreclosure rates in the Charlotte-Gastonia-Rock Hill metropolitan area rose in November compared to the same time last year, according to real estate research firm CoreLogic.

The foreclosure rate among outstanding mortgage loans is 3.33 percent for November, versus 2.54 percent in 2010, a 26 percent increase. When calculating foreclosures, CoreLogic looks at the percentage of loans that are in some stage of the foreclosure process.

The area's foreclosure rate is slightly below the U.S. foreclosure rate of 3.41 percent.

The area's mortgage delinquency rate also rose, according to CoreLogic. These involve loans whose owners are 90 days or more behind on payments.

In November 2011, 7.11 percent of mortgage loans were 90 days or more delinquent, compared to 6.84 percent for the same period last year. This is also slightly below the U.S. delinquency rate of 7.23 percent.

Nationally, banks have been moving forward with foreclosures that they temporarily stopped after it was revealed that some employees approved legal documents without proper review and made other short cuts.

Apartment complex plans "transportation lobby" where light rail commuters can grab coffee, avoid bad weather

Residents at one of the area's newest apartment complexes will one day be able avoid bad weather, search the Web and grab a cup of coffee before hopping on the light rail line.

Developer Proffitt Dixon Partners has started construction on its 208-unit luxury community at New Bern Station along the Lynx light rail line.

Details released Monday show the company will build a "transportation lobby" so residents can wait for their train sheltered from the weather while having access to computer work stations, WiFi and a coffee machine. There will also be big-screen televisions and a camera along the tracks that will let passengers see when the train is nearby.

The lobby, which will have hardwood floors, will sit 50 feet from the light rail platform, according to developers.

“It’s so close that residents can wait comfortably in the lobby – protected from the weather – until the crossing arms begin to flash, signaling their train’s approach. In the mornings, they can relax and enjoy the coffee bar and morning news; in the evenings they can socialize before heading out on the town,” said Stuart Proffitt.

Developers have announced a spate of new projects for the Charlotte-region in the wake of the economic slowdown.

Many condominium projects planned for the popular light rail corridor have been shelved, but multifamily developers have continued building. Analysts expect more people to rent as the housing market remains weak and the number of younger workers grows. For example, developers recently announced plans for new apartments for Midtown near the Metropolitan project and uptown.

Proffitt Dixon's complex, Fountains at New Bern Station, will built on 4.7 acres.

To take a closer look, go to http://www.proffittdixon.com/.

Friday, January 27, 2012

Good news in Mecklenburg County housing data?

There may be a glimmer of good news for Mecklenburg County hidden within the recent batch of housing data released this week by RealtyTrac.

The research firm reported that the percent of U.S. home sales involving foreclosures continues to shrink as banks delay putting homes on the market and the total number of home sales falls.

Foreclosures accounted for 20 percent of U.S. home sales in the third quarter last year, RealtyTrac reported. That's four times higher than at the housing market's peak, when foreclosures made up less than 5 percent of sales. Two years ago, foreclosures accounted for 37 percent of U.S. home sales.

in North Carolina, foreclosures accounted for nearly 9 percent of sales between July and September last year, a 30 percent drop from a year ago.
Foreclosure sales include homes purchased after they received a note of default or were repossessed by lenders.

But dive into the numbers and there's an interesting trend: In Mecklenburg County, the number of sales of homes in pre-foreclosure accounted for more than 4 percent of total sales, more than double the state average of 2 percent. Pre-foreclosures involve homes that are distressed but not yet owned by the lender.

The number of pre-foreclosure sales in Mecklenburg County jumped nearly 50 percent in the third quarter compared to the previous year.

What this means, says RealtyTrac's Daren Blomquist, is that lenders appear to be more willing to accept short sales, where a buyer purchases the home for less than is owed on the loan and the lender takes a loss.

To be sure, the market faces heavy challenges from the amount of distressed housing still out there. The statistics, for example, don't take into account the looming shadow inventory of distressed homes. Nationally, estimates suggest there could be anywhere from 1.5 million to more than 6 million homes whose owners are seriously delinquent, that are in the foreclosure pipeline, or are owned by lenders but not on the market. An Observer analysis found that for every home officially for sale in Mecklenburg County in October last year, there were at least two more poised to come on the market.

Still, "(the pre-foreclosure statistics) are a good sign for the long-term health of the market because it could help the area more quickly absorb the distressed properties," Blomquist said. "That lenders are more willing to accept short sales makes sense because the foreclosure process is increasingly messy."

Tuesday, January 24, 2012

More apartments planned for Charlotte

The multifamily sector continues to run hot with yet another player entering the Charlotte apartment market.

Orlando-based Global Growth Trust, Inc., a real estate investment trust, has entered into a joint venture with an affiliate of Woodfield Investments, LLC to buy 13 acres in the Queen City. The groups plan to develop a 297-unit, Class A garden-style apartment community.

When complete, the $30 million community will include amenities such as a club room, cyber cafe, fitness center and resort-style pool.

The joint venture expects to purchase the land within 30 days.

"We are excited to expand our relationship with Woodfield Investments who has the local market knowledge and expertise to develop exceptional new communities," Global Growth Trust president Andy Hyltin said in a statement.

This would be Global Growth's second multifamily partnership with Woodfield Investments. Last May, the two companies announced a partnership to build a new 258-unit multifamily development in Mount Pleasant, S.C.

The groups haven't disclosed the exact Charlotte location, yet. But in a release, they praised the southwest corridor's large amount of workers and proximity to other employment centers.

Global Growth Trust is sponsored by CNL Financial Group, a private investment management firm that has become more active in the Charlotte market.

Last year, CNL Financial Group provided $100 million in capital to Crosland Southeast, a development firm formed by former Crosland veterans.

Woodfield Investments has developed local apartment complexes including Elizabeth Square off Hawthorne Lane, which sold for a premium last year to institutional investors advised by J.P. Morgan Asset Management.

Wednesday, January 18, 2012

N.C. commercial construction spending way down but still among tops in the nation

Commercial real estate and construction continues to contribute significantly to the economy, despite slowed growth and stalled projects, says a new report issued by the NAIOP Research Foundation.

And North Carolina is faring relatively well compared to the rest of the country, generating enough construction dollars, jobs and personal income in 2010 to rank the state among the top 10 economic generators, the group found.

The economic impact of commercial development and construction spending nationwide reached $238 billion in 2010, according to the foundation, a think tank that studies issues relating to commercial real estate.

The spending and economic impact remains down sharply from $548.7 billion in 2007, before the financial markets crashed and the nation entered a recession.

Based on construction values in 2010, North Carolina ranked 5th in the country in spending on office projects, 8th in spending on warehouses and 10th for overall commercial building, according to "The Contribution of Office, Industrial and Retail Development and Construction to the U.S. Economy," by Stephen Fuller, director of the Center for Regional Analysis at George Mason University, and funded by the NAIOP Research Foundation. New York ranked 1st overall.

North Carolina saw commercial construction spending of $5.8 billion in 2010, down from $13.8 billion in 2007, the report says. There were 53,627 people employed because of commercial construction spending, down from 131,170 three years earlier. Personal earnings were $1.9 billion, down from $4 billion.

NAIOP, or the Commercial Real Estate Development Association, is a group of developers, owners and others in the commercial real estate industry that advocates for public policy.

Tuesday, January 17, 2012

South Carolina home sales and prices down in 2011

Home sales in South Carolina fell last year compared to 2010, South Carolina Realtors reported Tuesday.

Roughly 46,760 homes were sold statewide in 2011, a 1.7 percent drop compared to 47,556 sales reported in 2010.

The median price also fell - slipping 1 percent to $148,500 from $149,999.

Indicative of the tough sellers market, the number of days a home spent on the market increased by 8.1 percent to 143 in 2011, up from 133 in 2010.

In December, the inventory, or homes available on the market, fell, continuing a trend seen throughout 2011, the trade group says.

The state had 11.9 months of inventory, down 16 percent from the previous month, the group says. This excludes shadow inventory, or homes that are seriously delinquent, in foreclosure or owned by banks but not listed for sale. A healthy real estate market is thought to have six months of inventory.

An Observer analysis published last month found the region has a significant amount of shadow inventory looming.

The Observer's analysis showed the seven counties surrounding Mecklenburg have more than 17,300 homes in shadow inventory. In contrast, the seven counties had 8,636 homes listed for sale as of October.

Lancaster County in South Carolina led the region with nearly four times the amount of shadow inventory as for-sale listings.

The real estate group said market conditions now are better than two years ago.

"Sellers are seeing multiple-offer situations, buyers are seeing sub-4 percent loans, and supply-demand trends are more balanced," the group said. "When it gets down to it, that's a stable foundation and a far cry from 2009. While the fundamentals are better, the foreclosure situation and political unknowns remain wildcards. For now, we should enjoy the fresh canvas."

Friday, January 13, 2012

Land near Gateway Center sells for $2.3 million

While the real estate market remains slow, bits and pieces of land are selling.

Capital Bank, N.A. sold 2.3 acres near the Gateway Center and Johnson & Wales University to Gateway West- FCA, LLC for $2.3 million. The transaction closed last month.

NAI Southern Real Estate represented the bank.

Company affiliated with Childress Klein buys vacant land in uptown

A company affiliated with Childress Klein Properties has bought a prime piece of uptown land, according to NAI Southern Real Estate, which helped broker the deal.

CK Mint Street, LLC bought 1.69 acres on Martin Luther King Boulevard near Bank of America Stadium last month for $3.5 million, according to property records and NAI Southern Real Estate.

NAI Southern Real Estate senior vice president Roger Cobb said the buyer is part of developer Childress Klein Properties and involved with multifamily projects.

“Multifamily is hot,” Cobb said. “They bought it, liked the price, loved the location and all that is expected to continue to happen in that area of uptown.”

“They are studying it, trying to figure out what to do,” he said. “It could be multi-family. It could be something different as well.”

NAI Southern represented seller South Church Street Property Holdings.

A representative with Childress Klein couldn’t be reached for comment late Thursday.

The land, which is currently being used as a parking lot, is adjacent to the proposed new minor league baseball park at the corner of South Mint Street and Martin Luther King Boulevard.

Developers once had grand plans for the Third Ward area, including building a 39-story condo-hotel. While development in Third Ward has slowed along with the rest of the economy, plans for the area still include a public park.

Charlotte’s multifamily sector has attracted interest from developers and investors recently. Lenders are still making loans to build apartment complexes and analysts expect the number of renters to continue growing.

Uptown could use more apartments, said analyst Engle Addington with Real Data, which studies the apartment market.

Currently, there are 2,000 units in uptown. The vacancy rate as of August was 3.4 percent, down sharply from roughly 25 percent in February 2010, according to the most current data available.

Some new apartment complexes were added to the uptown market in 2010. More than 600 new condominiums have also been converted to rentals in recent years as buyers have largely disappeared during the downturn.

Demand, however, has remained strong.

“Uptown is doing pretty well, even with all the condo conversions,” Addington said.

“(Complexes) were running some great specials, and a lot of people took advantage of that.”
Average rents have also risen, despite concessions landlords offered to fill units. In August, the average rent for a two-bedroom unit in uptown was $1,180, up from $2,010 in February.

“The apartment industry is on top of the bell curve right now, especially since other parts of the real estate industry are not performing all that well,” she said. “Vacancy rates are in a good place and forecast to improve even more.”

“Anything uptown is a good location,” she added. “You can’t go wrong.”

Monday, January 9, 2012

2011 home sales rise slightly but prices fall

Charlotte-area home sales in 2011 rose slightly compared to the previous year, the Charlotte Regional Realtor Association reported Monday.

Nearly 23,000 home sales closed in 2011, up 2.5 percent from the number of sales in 2010, the association says. Sales volume in 2011 hit roughly $4.6 billion. (No comparison with 2010 sales volume was provided.)

The 2011 average sales price of $200,351 was down 3.5 percent compared to the previous year. Homes took seven days longer in 2011 to close, and the time a property was listed until it closed averaged 152 days.

During the month of December, closings were relatively flat compared to the same time last year, with 1,896 properties selling. Overall inventory, or the number of homes listed for sale, fell 27 percent compared to the same time a year earlier, to about a 9.1-month supply of homes. Experts say a healthy market has a six-month supply.

This inventory does not take into account what's known as shadow inventory, or homes that are distressed and could hit the market but are not currently listed for sale. A recent Observer analysis found Mecklenburg County has more than 16,000 homes in shadow inventory.

Friday, January 6, 2012

Unsecured creditors could get money back from EpiCentre

Unsecured creditors owed money by the EpiCentre's developer could end up being paid all of what they are owed - a rarity in a real estate bankruptcy case, experts say.

Attorneys for the entertainment complex, its developers, the lender and others met in federal court Thursday to continue working toward an end to the ongoing bankruptcy case. The EpiCentre's developer filed for Chapter 11 bankruptcy protection in July 2010 to stave off foreclosure attempts by its lender.

On Thursday, Travis Moon, an attorney for the trustee appointed to oversee the project, told the court that he expected the bankruptcy case would be "a 100 percent case," slang meaning "people are going to get paid," said Dennis O'Dea, the attorney for the committee of unsecured creditors.

The debtor is expected to present a reorganization plan to U.S. Bankruptcy Court Judge George Hodges next month. As part of that plan, O'Dea said, the project's lender, Blue Air 2010, seems willing to let more money go to the unsecured creditors.

O'Dea said creditors are owed between $5 million and $9 million.

"It's quite unusual in real estate cases that people who provided goods and services to the debtor get some money back," he said. "General creditors are usually just kind of swamped by the tide in the fight between the giants (the developer and lender)."

The uptown project has been mired in court battles since the original lender, Regions Bank, started foreclosure proceedings in July 2010 after the loan came due.

Shortly after Regions started to foreclose on the property, the two limited liability companies that own the EpiCentre, Pacific Avenue and Pacific Avenue II, filed for bankruptcy protection, stalling the foreclosure. Regions Bank then filed documents questioning how developers Afshin Ghazi and George Cornelson spent their loan money and kept records. "The integrity of the Debtors' financial records, and the earning power of the EpiCentre itself, must be established, " Regions Bank wrote. Ghazi and Cornelson denied claims of self-dealing.

That case was dropped after Regions in November sold the $93.9 million construction note to Blue Air 2010, a limited liability company. Ghazi also agreed to transfer assets owned by the EpiCentre to Blue Air.

Last fall, shortly before a reorganization plan was expected to be approved, Blue Air accused the defendants of wrongfully diverted money from the project before filing for Chapter 11 and in engaging in self-dealing.

Among other claims, it says the defendants changed or backdated leases to eliminate obligations owed by affiliated companies. Blue Air, for example, says in its filing the defendants wrongly removed from the books $800,000 in back rent owed by Ghazi-controlled EpiCentre Theaters Partners LLC. Blue Air also claims valuable contracts were transferred to a Ghazi-affiliated company on the eve of the bankruptcy filing.

The EpiCentre sits at College and Trade streets on the site of the old convention center, which was abandoned for years. City officials have viewed it as an important part of uptown's redevelopment.

A reorganization plan is expected to be presented to U.S. Bankruptcy Court Judge George Hodges next month.

Thursday, January 5, 2012

Crescent Resources names former Crosland exec as president and CEO

Crescent Resources’ has appointed Todd Mansfield as president and chief executive officer, the company said Thursday.

Crescent Resources' board of managers also named Dan Van Epp as its non-executive chairman. Van Epp is executive vice president of Newland Real Estate Group, LLC and president of The Van Epp Companies, LLC. He has served Crescent as a director since early 2011.

“Crescent is extremely fortunate to have Todd take the helm,” Van Epp said in a statement. “He is a visionary leader with the depth and breadth of real estate expertise to shape our future growth. Plus, he already has an extensive knowledge of the organization.”

“Crescent has solid positions in important real estate sectors and desirable markets, as well as access to capital," Mansfield said in a statement. "We have great opportunities before us to create value in real estate, and I am fortunate to work closely with this team of exceptionally talented individuals.”

The announcement comes less than four months after Mansfield joined Denver-based Bio-Logical Capital, a land-investment, development and conservation company, as president. Mansfield will transition to membership on its board of directors, according to a statement released by Crescent Resources.

Previously, Mansfield served as chairman and chief executive officer of developer Crosland, a position he left in September 2010.

He also served as executive vice president of Disney Development Co., where he led the team that initiated development of the 5,000-acre Town of Celebration.

Charlotte-based Crescent Resources LLC is a real estate development and land management company that was formerly owned by Duke Energy. Crescent is known across the Southeast for building upscale lakefront communities, shopping centers, multifamily housing and industrial parks.

The company emerged from Chapter 11 bankruptcy protection in 2010.