Lake Norman, NC real estate, homes, waterfront properties

Truthfully,  2009 was a pretty easy year to predict real estate trends in our Lake Norman area. (See my 2009 predictions).  Prices came down, foreclosures and short sales dominated our market, new construction ground to a screeching halt putting many of our local builders out of business, and lenders made everyones’  lives extremely difficult. Yes, it was a tough year for home sellers and home buyers.

However, looking forward in 2010 I am not seeing a lot of black and white but rather a medium shade of grey. 

For our Lake Norman real estate market 2010 will be a turning point.  The question is, how bumpy will the road be, how far down the road will we hit the turn, and will it be a gentle, hardly discernable curve or a pronounced change in direction?

The Big Picture:

To a certain degree, our Lake Norman housing market’s ability to begin to stabilize will depend on the national financial policy makers.  Our national financial uncertainly makes it extremely difficult to make solid predictions for our local market.  Here are some of the major issues that will play a significant role in our housing market this year:

• At the end of march, the Federal Reserve will end its $1.25 Trillion program backing the mortgage market and helping to keep interest rates low.
• FHA is currently working on legislation to tighten their underwriting standards although progress is being made to modify and soften their original requests.  This tightening was initiated by a need for capital reserves due to losses FHA has absorbed since the recession began.
• Only a modest rebound in housing starts is expected.  Builders who have survived are still finding it nearly impossible to get loans for new projects and spec building is almost not existent.
• The homebuyer tax credits will end April 30th – June 30th. 
• There is expected to be another wave of  resets of adjustable and interest only loans, especially on jumbo loans, which means sharply higher monthly payments for those homeowners.  This may trigger another wave of shortsales and/or foreclosures.

Regionally:

Our Lake Norman housing market is also going to be impacted significantly by regional economic components, especially jobs. 

• North Carolina’s population growth was the third highest in the US  according to the Charlotte Business Journal.  Lake Norman is still a destination for people throughout the US.  While many of my out-of-state buyers have had to delay their moves here, very few have actually canceled them.

• Jobs play a huge role in our recovery.  The jobless rate in North Carolina started to lessen in November however unemployment rates in Mecklenburg and Iredell Counties remain higher than the state average.  North Carolina pundits seem very mixed in their economic vision of 2010 but they do seem to agree that unemployment has peaked and that we will see improvement by the end of 2010 if not sooner.  But everyone agrees that we must see job improvement before we see any significant change in our housing market. 

My Predictions:

• Bargains will continue to drive the market.  More and more homebuyers who have been sitting on the fence will realized that these bargains, once gone, won’t necessarily be replaced so they will be more confident and motivated in 2010. 
• A year of  foreclosures and short sales.  Sellers who have been hoping to sell at a price that allows them to at least break even are going to run out of time. We will continue to see active listings slowly evolving into short sales or foreclosures. 
• Shadow Inventory?  One of the biggest questions I have is just how many Lake Norman homeowners are either waiting to sell until they see a turn in the market or have withdrawn their homes from the market (which accounts for our drop in inventory) while planning to bring them back on the market once they see signs of improvement.  If, just when our inventory of homes gets down to a good number (6-8 months of supply), a large number of sellers who have been waiting  jump into the market, then we will again face high levels of inventory and a second round of a buyers market.
• A year of stabilization more than recovery is what most everyone is saying throughout the country.  Personally, I don’t think it will be an exciting year with significant changes but rather a slow, methodical road towards recovery.  2010 may hold some surprises but for the most part it will be a year of righting the ship and preparing to sail slowing forward in 2011.

I would love to hear your thoughts and predictions. Please leave a comment!

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