Triangle and North Carolina may have seen foreclosure peak in 2010

Posted on 04/27/11 No Comments

Foreclosed home
Despite talk at the beginning of the year that the recession’s true impact on the housing market was going to be reflected in a peak of foreclosures this year, it appears North Carolina may have experienced its heyday in 2010.

Statewide, there were 68,000 foreclosures last year. To date in 2011, we’re on pace for 65,000. You can see stats from all 100 counties on the Web site for the North Carolina Justice Center.

We’re not completely surprised. The state is buoyed heavily by market activity in Raleigh and Charlotte. The Triangle specifically has a history of entering downturns late and coming out of them early. The best markets, like Cary, Apex and Raleigh’s North Hills, are experiencing steady activity, bolstered in part by the decrease in market drag caused by foreclosures.

Foreclosures impact neighborhoods and the sales cycle in a number of ways. The most unfortunate byproduct is that an empty home pending foreclosure has a better chance to go un-maintained by the bank, creating an eye-sore on an otherwise appealing street. Foreclosure sales also disrupt property values because agents like us have to find some way to figure them into a market survey when considering a sales strategy. Was the home in good enough shape to be called a comparable when it was finally sold at the foreclosure auction? Can we use asterisks? No doubt, it’s become a challenge.

Then there is the often highly attractive price of a foreclosure, provided the home is move-in ready. We couldn’t fault a client for considering a foreclosure purchase if the home is sound and discounted substantially. Still, the auction process is not perfect and requires cash on hand. They’re not easy as some make them out to be and additionally, the enormous confusion on the part of the banking world relative to foreclosure ownership makes every one a substantial legal and financial risk.

Point is, a reduction in the number of foreclosures in the state is a great thing for home buyers and sellers. There will always be the spectre of foreclosures in even the healthiest real estate markets, but what we’ve seen in the last two years has been severe. And still, the impacts of the bust will linger for quite some time. (No, 10 percent appreciation/year is not normal.)

If you’re thinking of capitalizing on the foreclosure market, we encourage you to give us a call to discuss your options. Or, if you’re hesitant to sell because of some nearby foreclosures, we can answer some questions for you. A successful sale will not as nearly challenging as you think.

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