Charlotte Posts Modest Gain Amid National Housing Slump

Mon April 07, 2008 - Southeast Edition
Ieva M. Augstums - ASSOCIATED PRESS



CHARLOTTE, N.C. (AP) While home prices in much of the rest of the nation are falling, Charlotte managed to eke out modest gains compared to a year earlier. Even so, the market is showing signs of softening.

The widely watched Standard & Poor’s/Case-Shiller home price index released March 25 showed Charlotte posting a 1.8 percent rise in January as the 20-city index fell 10.7 percent — the steepest decline in the index’s two-decade history.

Real estate agents and local officials cited the strength in the regional economy and Charlotte’s history of more modest house price growth during the boom years as reasons the market was holding up now.

“We are still selling here in Charlotte,” said Dianne McKnight, a broker associate at Re/Max Executive Realty in the city. “If a property is priced right, it sells in a day and you have multiple offers. There are plenty of buyers out there kicking around.”

That’s not to say Charlotte, with roughly 1.7 million people in its metropolitan area, isn’t feeling the same pressures as the rest of the nation.

“You have to try a little harder to sell more of your listings, but homes are selling,” said Kristi Lee, a broker at Urban Realty LLC in the city. “Depending on the day, the phone does not ring. Other days, it is ringing off the hook.”

The Charlotte area also is home to nine Fortune 500 company headquarters, including two of the nation’s four largest banks, Bank of America Corp. and Wachovia Corp. More than 14,000 jobs were created in the Charlotte area last year, compared with around 12,000 jobs in 2006.

“The banks, not withstanding the financial difficulties across the industry, are major, they give us clout,” said Bob Morgan, president of the Charlotte Chamber of Commerce. “They draw other jobs, and with jobs, people need place to live.”

Economists say Charlotte has been saved from declining house prices because the region did not have the dramatic house price inflation that occurred in other markets.

“We’ve never seen the huge double-digit appreciation,” said Dot Munson, president of the Charlotte Regional Realtor Association. “We have less of a correction to make than most other markets.”

Worst-hit according to the Case-Shiller index were Las Vegas and Miami, both reporting 19.3 percent drops, as the regions pay the price for rampant speculation and overbuilding. Those cities and 14 others, including Phoenix, San Diego and Detroit, posted record lows.

While the vast majority of homes in the U.S. are not in danger of foreclosure, the housing slump has raised concerns about a recession and has had ripple effects across the economy as consumers spend less in other areas and banks tighten lending requirements.

With no clear bottom yet, some analysts say it may be late summer before the nationwide housing market sees any notable improvement. The question is, will Charlotte remain unscathed?

“Even if we show a negative 1 or 2 percent, I don’t think that’s going to devastate Charlotte,” Munson said. “We have a lot of movement here.”