Carolinas housing market 'excellent,' bank executives say

The residential real estate market could be stabilizing, with pockets of the country starting to see home prices appreciate, according to executives with Wells Fargo Home Mortgage.

Conditions in the Carolinas' housing market, meanwhile, are "excellent" and "very solid," they also said.

Around 100 local Realtors gathered at Regal Cinemas Stonecrest Thursday to listen to Wells Fargo executives talk about the housing market and ways they could improve business in 2012.

The event, called CineMeeting, was broadcast in real time to 100 movie theaters across the country. The goal of the event, the bank's fifth annual telecast, is to educate and inspire agents, organizers said.

The Observer also spoke with two bankers before the presentation to get their feel for the regional and local markets.

Cliff Frohn, Southeast Division Manager for Wells Fargo Home Mortgage, said consumer confidence about the economy in general is rising, which bodes well for the housing market. He cited a February survey by Fannie Mae showing 70 percent of those polled think now is a good time to buy a home, down 1 percent from January.

Frohn said foreclosures will continue to weigh on some markets and push prices down. But he also praised the bank's efforts to reach out to borrowers, saying of the borrowers the bank talks to, seven out of 10 are able to avoid foreclosure because of loan modifications or other arrangements.

"If we can talk to you, there's a 70 percent chance we can help you," he said.

Wells Fargo is one of the banks that agreed to a settlement last month with federal agencies.

The deal resolved claims that banks used shoddy servicing and improper foreclosure practices such as signing foreclosure related documents without a notary or knowing whether the facts they contained were correct. North Carolina will receive $338 million of the $25 billion settlement. The money will go to help struggling homeowners. The settlement also sets new mortgage servicing standards.

As for Charlotte's market, Andrew Misocky, Wells Fargo Mortgage Area Manager, said he is seeing signs the local market is improving.

For example, the median sales price for the Charlotte area is around $185,000, down from $220,000 in 2007, but up from $180,000 where it has been relatively recently.

"I think it's a sign of new momentum," Misocky said.

Misocky and Frohn both said they are hearing Realtors talk about receiving multiple offers on houses, something that hasn't happened often during the past five years.

Asked if the market has hit the bottom, Frohn said: "It feels it not only is the bottom but that we're starting on the way up."

S.C. home prices up in January, Realtors group says

South Carolina Realtors reported Wednesday that home prices have started the year on an "up note."

The median sales price in South Carolina rose to $145,000 in January, up 3.4 percent compared to last year, according to the trade group.

Pending sales rose 19.7 percent to 4,024 and the number of days a home was on the market fell .6 percent to 143 days versus the same time last year.

Inventory levels shrank 15.2 percent to 47,916 housing units, and months of supply of inventory fell 16.9 percent to 11.7 months during the same time. A healthy housing market is thought to have six months of inventory.

"The media sometimes obsesses over the negatives, but last year brought several important improvements in key metrics that should not be brushed aside, such as an improved inventory picture," the group wrote in its report. "As we delve into a new year, we're seeing mostly positive signs."

The statistics do not include shadow inventory, distressed homes that aren't yet on the market. Shadow inventory includes homes that are crawling through the foreclosure process, properties that have been foreclosed on but not put up for sale, or houses whose borrowers are so delinquent they are unlikely to recover. Such homes are typically excluded from monthly sales statistics compiled by trade groups.

An Observer analysis found the seven counties surrounding Mecklenburg had more than 17,300 homes in shadow inventory at the end of last year. In contrast, the seven counties had 8,636 homes listed for sale.

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

Shadow inventory is not a new phenomenon. But because of the housing meltdown and recession, banks are taking back a record number of homes. The foreclosure pipeline is also swelling as banks take longer to complete foreclosures and more borrowers fall behind on their loans. When shadow inventory comes on the market, it typically sells at a steep discount, depressing values.

Wells Fargo economists less bullish on housing market gains this year

The housing gurus at Wells Fargo say while 2011 ended on a "fairly solid note," the latest data for 2012 is a "little less heartening."

By the end of last year, sales were appearing to improve, inventories appeared to be declining and builder optimism had posted four increases in a row, according to Well's Fargo Economic Commentary, released Wednesday.

But cracks are now appearing in that rosy picture.

New home sales for December showed sales weakening somewhat, the commentary says. And the S&P/Case-Shiller Home Price Index, released Tuesday, showed a larger-than expected decline in November.

Still, the analysts expect sales of both new and existing homes to improve this year. New home construction will also post its first meaningful gain since the home-buyer tax credit frenzy, the report says.

"We remain somewhat optimistic about the outlook for 2012, but we generally see less improvement than does the consensus," the commentary says. "Unfortunately, there is still much work to be completed before a self-sustaining recovery in housing can take place."

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

Home sales rose last month but prices fell

Charlotte-area home sales jumped year-over-year in October for the fourth straight month but prices are still falling, new data show.

The region's inventory of available distressed homes also dropped significantly. But the statistics don't take into account a reportedly growing amount of "shadow inventory," or foreclosed homes that aren't on the market.

About 1,882 houses, townhouses and condos sold in the Charlotte region last month, up 12.4 percent from October 2010, according to a report released Wednesday from the Charlotte Regional Realtor Association. Closings dropped 4.4 percent from September.

Meanwhile, pending sales - one of the best gauges of current housing activity - rose 14.1 percent in October compared to the year before. Pending contracts are signed contracts that haven't yet closed.

Average sales prices for the month dipped 3.6 percent year-over-year to $194,837. That's down less than one percent from the previous month.

Association President Laurie Knudsen said she was encouraged by the decrease in listing inventory, which suggests the market is working through a glut of available homes. Listings of non-distressed properties fell 10 percent from last year, while the amount of new listings for distressed homes dropped 55 percent.

"They keep talking about shadow inventory," Knudsen said. "But I think part of that shadow inventory has been absorbed in short sales and other sales. We have not suffered as much as the rest of the country. I believe Charlotte is going to remain pretty stable."

Last month, the closely watched S&P/Case-Shiller Home Price Index showed Charlotte was one of the few major markets where home prices in August rose compared to the previous month. Local home prices rose .2 percent from July and fell 3.4 percent from a year earlier.

"People still continue to move here," Knudsen said. "It's still a destination city."

Home prices fall despite low interest rates

For the second month in a row, home prices across the country fell, according to the latest report by CoreLogic, a real estate research firm.

Home prices dropped 1.1 percent in September compared to August, and 4.1 percent compared to the same time last year.

"Even with low interest rates, demand for houses remains muted," said Mark Fleming, chief economist for CoreLogic. "Home sales are down in September and the inventory of homes for sale remains elevated."

Fleming said he expects prices to continue falling through winter.

In the Charlotte area, home prices fell 1.8 percent in September compared to September 2010. In August, prices dropped 3.1 percent compared to the same time last year.

Despite the low interest rates, the housing market remains saturated with a glut of unsold homes. More foreclosures are also expected to hit the market as banks and lenders work through a growing inventory of foreclosures.

The parts of the country that saw the biggest appreciation in September include West Virginia (up 7 percent year over year); South Dakota (up 3.6 percent year over year); and Maine (up 3.5 percent year over year).

States with the greatest depreciation include: Nevada (down 12.4 percent between September 2011 and September 2010); Illinois (down 9.2 percent year over year); and Arizona (down 9 percent year over year).

CoreLogic tracks repeat sales of the same house over time.

To see the report, go to: http://cl.internal.cvic.com/corelogic/url.php?cin=1x2e1x2a1w1w