Prompted by a great article I read today on Forbes.com:   The Foreclosure Fallacy  I decided it was time once again for me to tackle the ever growing pile of information, mostly about our national and Lake Norman housing market, that is in a stack on my desk I call “Blog Topics”.  Most of these are not worthy of their own post so I will share a quick summary of a number of them here at one time:

National:

•  The Foreclosure Fallacy  is wonderful in its simplicity.  In one short article they touch on all of the major issues related to foreclosures from the risks involved to the sage advice from one Detroit area broker:  “Don’t be too picky.  A lot of houses will need work.”  I have mentioned in previous posts the importance of being willing to “compromise” if you are search for a bargain.  So true!

• Standard & Poors: Modifications and Slower Foreclosures Shrink Shadow Inventory article in the Wall Street Journal was one of many referencing the release of Standard & Poor’s  yearly report.  (S&P defines shadow inventory as properties with borrowers who are 90 days or more delinquent on their mortgage payments).  One disconcerting figure in this article:  “The time it takes for a lender to foreclose on a borrower has lengthened—from about 20 months to about 40—”. The amount of Shadow Inventory here in Lake Norman is one of the biggest unknowns that keeps home-buyers uncertain about when to move forward with a purchase.

• The Mortgage Bankers Association released a report today, February 18th, that says that the percentage of mortgage holders who are behind in their payments dropped to the lowest number in two years in the fourth quarter of 2010.  “While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner in the foreclosure crisis” according to MBA Chief Economist Jay Brinkman in a statement.

• There have been numerous articles recently about the death of the “McMansion Era”.  According to both the National Association of Realtors and the National Association of Home Builders the “median sized home being built today is smaller” and the future trends will be towards smaller, more energy efficient homes. Will the 8000 sq ft+ homes on Lake Norman one day be obsolete?  Probably not but it will be interesting to watch!

Local:

• CNNMoney.com recently listed Charlotte NC in their top 10 housing markets as the best recovery bets.

• Charlotte was chosen as the host city for the 2012 Democratic National Convention!

• Unfortunately, many of the ambitious housing/urban villages/mixed use developments that were in the pipeline several years ago are either drastically changed or no longer viable.  There have been a number in our local news over the past few months.  Instead of the Mooresville Cotton Mill mixed use village in the old Burlington Factory on Hwy 115 there will now be a large furniture store.  According to an article in the Charlotte Observer “In Cornelius, a massive mixed use project was planned that leaders predicted could generate thousands of jobs.  The bank now owns the farmland.”  Langtree at the Lake, the $850,000,000 upscale Lake Norman resort development that I have written about a number of times has still not broken ground.  The project was recently in the news announcing the sale of  land which will bring in enough cash to finance the first phase of their newly re-designed project which will now include 300 luxury apartments (originally planned as very high-end condominiums) with retail and commercial to come soon after as well as an hotel. 

• According to an article today in the Statesville Record & Landmark,Iredell County revaluation notices were sent out today.  “The final line is a 1.5% total decrease in value in the county…Nearly 58% of Iredell property owners saw the values of their property decline.”

• All Lake Norman residents will receive notification this month of our 2011 home revaluation. (Remember that 4 counties comprise the Lake Norman shoreline).

Personal:

• I, as I’m sure every member did, received a summary from the social network LinkedIn letting me know that 53 of my LinkedIn connections “started something new” meaning a change in job titles in 2010.  Lot’s of change, that’s for sure!

Mission accomplished!  My pile is now a full inch shorter.  Hopefully you found at least one or two of these of interest to you!

Every once-in-a-while I write an eclectic article for my readers with miscellaneous business and real estate news that has accumulated in a stack by my desk.  Here is just such an update!

North Carolina and Lake Norman Area Business:

• North Carolina ranks fourthin CNBC’s recent survey:  America’s Top States for Business:  The Charlotte Business Journal ran an article on July 13th.
• The Palm City Florida based firm Policom recently ranked the Statesville-Mooresville area 15th among 576 Micropolitans nationwide in terms of economic strenth according to a recent article in The Statesville Record and Lankmark Newspaper.
• Today’sMooresville Tribune says that the Iredell County jobless rate dropped to 11.6%
• Lennar,one of the nation’s leading home-builders, recently announced that they will be building town-homes in a brand new community in Cornelius adjacent to Harborside.  It will be called Harborside At Lake Norman

Housing and Real Estate:

• According to the National Association of Realtors, 10 – 14% of all pending home sales don’t close.  (Very interesting!)
• A Wall Street Journal article on July 26th reported that “Foreclosures Reduce Home Values by 27%“.
• “Foreclosure starts hit a record high for Fannie, Freddie loans” according to an article today in Inman News.  It went on to say that in all loans, 30-day delinquencies were down 1.4% from May, 60-day delinquencies rose 2.4%, 90-day delinquencies were down 3.9% and loans in foreclosure were down .4%.
• The Federal Trade Commission has amended rules governing free credit report offers to prevent deceptive advertising.  The only authorized source under federal law for a free credit report is:  AnnualCreditReport.com  or 877.322.8228.
• Note to home buyers and sellers:  HUD has clarified it’s rule regarding fees to Real Estate Brokers for Home Warranty Plans.  Real estate brokers and agents may NOT be compensated by Home Warranty Companies.  I don’t take the fees and have always thought they were unethical and/or against the RESPA laws regarding kickbacks so now it is official!
• The number one source for home searches, REALTOR.COM is in the Beta testing mode of a vastly improved site: http://www.beta.Realtor.com which was launched on June 15, 2010.  It looks to be a truly major different and exciting!

There you have it…my stack of news is now much thinner and I can go back to analyzing our Lake Norman housing market!

According to a recent update I received from the National Assoication of Home Builders, two scenarios since the extension of the First-Time Home Buyer tax credit and the creation of the repeat home buyer tax credit have risen and been addressed by the IRS:

“With the addition of the second tax credit, there may now be a situation in which two unmarried buyers purchase a residence together where one qualifies for the $6,500 repeat buyer credit and the other qualifies for the $8,000 credit. According to the IRS, they must allocate the tax credit in a meaningful manner. The repeat buyer cannot receive a tax credit higher than $6,500 and the total amount claimed by both buyers cannot exceed $8,000. For example, the repeat home buyer could claim $6,500 and the first-time home buyer could claim $1,500. Alternatively, both buyers could claim a $4,000 tax credit.

The second scenario involves the qualification status of married purchasers as repeat home buyers. In order to qualify for the repeat buyer tax credit, both individuals must have lived in the same residence for five consecutive years out of the last eight. If one spouse has lived in the house for five years and the other moved in later, after they were married, then they are both excluded from the repeat buyer tax credit.

This information has been updated on NAHB’s consumer tax credit Web site, which can be found at www.federalhousingtaxcredit.com.”

One of my Lake Norman home buyers also raised an interesting question recently.  They have owned a home in Raleigh NC  for 5 years but they only lived in it for 4 years before moving to Lake Norman.  It has been rented for the past year.  Because they had not lived in the home for 5 consecutive years out of the past 8 years they are not eligible for the tax credit.  Remember, there are also income limitations.

When in doubt, I would ask your accountant/CPA!

The Lake Norman and National real estate trends are not the only important news to report.  In fact, there are some new laws and regulations that will probably affect nearly all readers of this blog.  I have been making a stack for quite a while so here they are!

According to a Harris Interactive poll, North Carolina is the sixth most popular state when it comes to where people want to live.  “The most popular states and cities where large numbers of people would like to live tend to attract tourists and business.  They are places where people like to take vacations and where companies like to have their offices and factories” according to a Harris news release.  Great news!

A new law went into effect on October 1, 2009 in North Carolina outlawing plastic bottles in landfills.  (Motor oil and pesticide containers are excluded).  This means that all residents in the Lake Norman area must recycle all plastic bottles whether or not we have curbside recycling.  While this law may be hard to enforce, the spirit of the law is what is important.  As a reminder:  The City of Statesville offers curbside recycling.  The Iredell County Solid Waste Department offers five locations for recycling.  We go to the one at the intersection of Hwy 150 and the 21.  For more information:  Iredell County Recycling Coordinator Diane Lewis: 704.928.2023.  See below of link to Think Green Recycling, a private company serving Lake Norman.

Mooresville and in fact all North Carolina town residents will now be required to install a separate water meter and pay the town a fee that could cost as much as $1800 when installing new lawn irrigation systems.  This law, effective July 1, 2009, is part of Drought Control Legislation enacted to help towns enforce water restrictions.

On January 2, 2010, the state of North Carolina will ban smoking in restaurants, bars and all enclosed public places!  As a non-smoker I am thrilled to see our state join the 24 other states that have similar smoking bans.  It is particularly impressive to me, in light of the fact that our state once relied on tobacco production as its primary economic driving force.  We have come a long way baby!

Lake Norman officers patrolling the lake are increasing the number of citations for a “little known but potentially life-threatening infraction: Allowing children and guests to dangle (their arms and legs)  from the bow of their boats” according to a recent article in the Mooresville Tribune. There have been several cases of people falling off of the boat and being injured when the boats run over them or even biting one’s tongue or lips when the bow of a boat hits a large wake.

North Carolina has added additional requirements to Home Inspection Reports as of October 1, 2009.  The “Summary” section of the inspection report MUST:

• Describe any system or component of the home that does not function as intended, allowing for normal wear and tear that does not prevent the system or component from functioning as intended.
• The summary page must also describe any system that appears not to function as intended, based upon documented tangible evidence, and that requires either substantial examination or further inspection by a specialist
• The summary page MAY describe any system or component that poses a safety concern
• The summary report must contain the following statement: “The Summary page is not the entire report.  The complete report may include additional information of interest or concern to you.  It is strongly recommended that you promptly read the complete report.”

Finally, the Lake Norman Fire Department is urging all homeowners to purchase a $35 sign for their docks with clearly displays the street address. This is because fire crews have had difficulty in the past finding a home from the lake.

RELATED ARTICLES

Lake Norman Real Estate’s Business of the Week:  Think Green Recycling Company 

Lake Norman Real Estate:  How to Harvest the Rain!

 Lake Norman Real Estate’s Growth and Development Update

• 2-week snapshots called Hot Sheets for up-to-the minute Lake Norman housing data
• Monthly sales reports which compare it to the previous year and prior month
• Quarterly sales reports which provide two separate reports; an overview of the 2nd quarter and then a break down by price-range.

IMPORTANT FINDINGS

• Our current inventory of active listings has actually dropped by 11%.  While they are still too high, this is certainly a move in the right direction.
• The number conditional sales (those that just went under contract) are dramatically higher than last year however the average price has decreased and the average days on market has increased 44%.  Please note the average sales price last year was very high due to several high sales that skewed the figure.
• The number of pending sales (those that are ready to close) dropped by 17% but the average price and days on market are almost the same as last year.
• The number of closed sales this past quarter dropped 23% versus the second quarter of 2008.  The average price dropped 3% but the average days a home was on the market increased by 43%.
• Our number of months of supply of homes increased from 19.9 to 22.8.  Even though our inventory has dropped, our sales dropped even more which results in a higher number of months of supply.  As always, keep in mind that a balance housing  market should have between 6-8 months of supply so we current have three times as many homes for sale as we should have.  We are definitely still in a buyers market!  However, it is nice to see some higher numbers in conditional and pending sales.

2nd Quarter 2009 Lake Norman Home Sales By Price Range

*All statistics are from the Charlotte Regional Multiple Listing Service

This report is probably the most useful for both home buyers and sellers.  This is because it enables you to focus on your own price range and size up the competition, the strengths and weaknesses and trends that might help position you best for your future purchase or sale.

For example, let’s say you are planning to buy a home in the $600,000 – $1 million price range.  While that price range in general is very weak, the homes priced in the $700,000s and the $900,000s have over twice as many months of inventory than the other price ranges.  Knowing these are particularly weak, you might look for greater discounts when making your offer.  When there are 64 homes on the market in the $900,000s and on average only one sells per month, you can imagine these sellers must be getting pretty anxious.

On the flip side, if you are a seller in this same price range and are on the fence about pricing your home in the low $700,000s or the high $600,000s, clearly you should price your home in the $600,000s where you have a much larger pool of buyers and the least amount of competition (months of supply, not number of homes).

This past quarter, 67.3% of all of the Lake Norman home sales were under $500,000.  Only 12.5% of our Lake Norman home sales were $700,000 or higher yet that same price range represents 31.4% of our active listings.  As has been the case for several years, our higher end homes sales are extremely slow.

So, pick a price range and take a look at the number of sales, the number of active listings, the average days on the market and the months of supply.  This report provides you with the data to focus on your price niche.

RELATED ARTICLES

 Lake Norman Real Estate:  Why is it so hard to buy a home right now?

Lake Norman Real Estate:  The Big Picture

Lake Norman Real Estate’s May 2009 Sales Analysis

Lake Norman Real Estate’s April 2009 Sales Analysis

Lake Norman Real Estate’s 1st Quarter Sales Analysis

 Lake Norman Home Buyers, Stop Searching for Homes