2010 North Carolina Housing Market

Blueridge Mountains North CarolinaPropelled by the federal tax credit, near record low mortgage rates and lower home prices the path to recovery in North Carolina housing markets may be close to materializing. During the real estate boom North Carolina benefitted from tens of thousands of new residents moving to the state to retire, and now the “Half-backs” as they call themselves since they are half way home from Florida to North Carolina, are driving the early stages of a recovery of sorts that is only beginning.

The drastic decline in home prices forecast to develop in North Carolina has undergone a major reassessment as buyers return to the market for lower priced homes more quickly than in most of the nation. But home price appreciation has not yet developed, and it is not projected to do so for some time.

As projected by Housing Predictor the home buyers’ tax credit produced higher home sales in the first half of the year in most areas. However, issues persist with an economy that is heavily dependent on the banking industry.

In Charlotte, one of the nation’s prime banking centers foreclosures have hampered the market’s recovery as home prices are pressured by the back-log of REO properties, and homes that are in the foreclosure pipeline but not yet formally foreclosed. The boom was good to Charlotte but the bust has been anything but short. Home prices are projected to decline over the remainder of the year as sales remain sluggish. Average prices are forecast to decline a less severe 6.3% in 2010.

The federal government’s Hardest Hit Fund will help some unemployed homeowners in North Carolina, which has to over-come high levels of joblessness before a full recovery can get underway. The states business climate still holds a strong diversified future, despite the weakened banking sector.

The economic downturn will, however, have to sustain strengthening in other areas before Raleigh gets back on its feet, a second state hub in banking. Intense pressure in financials is magnified for Raleigh with higher levels of foreclosures. The housing market will take longer to stabilize as a result with forecast average home price deflation at a lesser 6.9% for the year.

In Durham home sales saw a boost, but prices are still declining and are forecast to drop over the rest of 2010 as bargain hunters pick up deals from banks that need to unload the inventory of foreclosures and other troubled properties. Durham attracts investors for its college based tenants, and should experience a sooner rebound as a result. However, average housing prices are forecast to decline 5.8% in 2010.

Home sales rose in Wilmington like most of North Carolina over the course of the first part of the year, but housing priced on the cheap to get rid of the inventory of foreclosures pulled values down. The trend is projected to be magnified over the remainder of the year as Wilmington sustains one of the hardest hits in the state in the housing crisis. Average home prices are forecast to remain at a declining rate of 6.4%.

In Greensboro the market has also been hurting, but has at least gotten a sort of step up by the retirees, who consider themselves “Half-backs” since so many have moved to North Carolina from Florida and have moved half way back to their former homes in the north-east. However, Greensboro is still in for a slow ride out of the housing downturn forecast to deflate at an improved average of 6.1% for the year.