Economic malaise is costing jobs, triggering more business failures and leaving all sorts of commercial real estate without tenants in North Carolina. But a trend is developing in the housing market that is positive. Fewer home foreclosures are taking place, a rarity in most places these days.
The lack of fewer default notices indicates that the once booming North Carolina housing markets may be on the mend much sooner than many other areas.
There is plenty of evidence to fuel an earlier stabilization in North Carolina. Raleigh has a growing population and the price of average housing is much lower than the national average. The community also offers a blossoming downtown area attractive to new businesses. The turn in North Carolina's markets won't be evident for a while yet – not until housing values stop declining.
Jobs are the key factor to stabilizing the housing market. Higher unemployment in manufacturing, banking and furniture making are contributing to a deteriorating economic climate. The downward spiral is sending home values lower in Charlotte, which had some of the highest priced real estate in the boom.
 |
| City |
Forecast |
| Raleigh |
− 13.6% |
| Charlotte |
− 13.8% |
| Wilmington |
− 14.1% |
| Durham |
− 13.2% |
| Greensboro |
− 12.3% |
Charlotte became one of the nation's banking centers, including mortgage companies. But after the mortgage crisis hit lenders started what would be a series of job lay offs, severely impacting the market. Foreclosures climbed but have now leveled off, and appear to be stabilizing. Housing Predictor forecasts average home prices to deflate 13.8% in Charlotte in 2009.
Falling home sales in Durham are also making a dent in the market, but the community is supported by a rich academic community that continues to attract newcomers. Home values are declining. Durham is forecast to experience average deflation in its housing market of 13.2% for the year.
Raleigh was a second hub for the banking business in North Carolina as bankers and mortgage companies set up shop during the boom. Now many of those same offices are empty and the bankers have fled. The bust developed more slowly as a result in Raleigh, which is forecast to have average housing deflation of 13.6% in 2009.
However, in Wilmington the nation's foreclosure epidemic is affecting home values and the community is projected to see the pace of foreclosures increase through the rest of 2009 as more than 3 million adjustable rate mortgages reset nationally during the year, a large majority of which are expected to become foreclosures. Wilmington is forecast to see average home values deflate 14.1% in 2009.
In Greensboro home sales are also declining and the volume of sales should remain low through the remainder of the year. As the inventory of foreclosures increases, home sales are projected to slow further on average deflation of 12.3% in 2009. Sales in nearby Winston and Salem should also be slow as North Carolina tries to move towards a more stable housing market.
