Foreclosures And Short Sales Still Hard To Find In Charlotte Region

WHY FORECLOSURE & SHORT SALE BARGAINS ARE STILL HARD TO FIND IN THE CHARLOTTE REGION

Foreclosure and short sales as a percentage of total home sales in the Charlotte, North Carolina region remained very low at 0.3% as of August 2022. It's noteworthy that the Charlotte region began 2022 at just 0.3% of total home sales. This is 50% lower than at the start of 2021!

If you've been searching for a distressed property "bargain" in the Greater Charlotte area and are having a hard time finding one, here's why:

• Foreclosure sales were down 38.5% in August 2022 versus August 2021. Charlotte region saw 8 foreclosure sales closed in August 2022 versus 13 in the same month one year ago.
                                                                                                                
• Short sales were down 55.6% in August 2022 versus August 2021 with 4 short sales last month versus 9 short sales one year ago.
  
  
• Distressed property inventory remains low: in August 2022 Charlotte region had 41 distressed property listings out of a total of 6,738 active property listings.
   

Moreover, foreclosed and short sale median home prices continue to increase, as the chart below shows.  While non-distressed property sale prices increased 16.7%, foreclosure home property prices increase 29.7% and short sale property prices increased 81% in August 2022 year-over-year.

As of August 2022, the inventory of foreclosure homes for sale on a 12-month rolling basis in the Charlotte region was just 28 homes compared with 344 homes in the same month in 2017. The months supply of inventory of distressed properties was 1.7 months in August 2022, compared with the same time frame in 2017 when it was 3.3 months. 

INVENTORY TRENDS FOR DISTRESSED PROPERTIES IN THE CHARLOTTE REGION

As of August 2022, the median sale price of a foreclosed or short sale home on a 12-month rolling basis in the Charlotte region was just under $282,500 compared with $109,399 in the same month five years ago. In other words, distressed property sale prices have almost tripled in the past five years.  And if you do manage to "score" a distressed property sale, you won't be seeing any discounts to the list price...  distressed homes sold at a median 100.8% of list price as of August 2022. This compares to 96.5% five years ago.

MEDIAN SALE PRICE TRENDS FOR DISTRESSED PROPERTIES IN CHARLOTTE

DON'T WAIT FOR A WAVE OF FORECLOSURES TO FIND THAT BARGAIN

If you've been waiting on a wave of foreclosures to "hit" the market in 2022, here are five reasons why that has not happened and is not likely to happen:

1. There are way fewer homeowners in trouble compared with the last housing crash, when there were some 9 million households in trouble. For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures). That caused prices to tumble. Today, while supply is growing, there’s still a shortage of inventory available. 
   
   
   
2. As of August 2022, the number of mortgages still in forbearance was approximately 370,000.  That's quite the decrease from the 7.6 million homeowners who were in forbearance at some point during the pandemic, representing 15% of all mortgages.
   
   The share of Fannie Mae and Freddie Mac loans in forbearance stand at 0.34%; Ginnie Mae loans in forbearance  at 1.26%, and the forbearance share for portfolio loans and private-label securities (PLS) at 1.34%. Those homeowners who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.
   
   As the graph below shows, with modification, deferral, and workout options in place, four out of every five homeowners in forbearance are either paid in full or are exiting with a plan.
   
   

   
   
   

3. Most homeowners have more than enough equity to sell their homes (unlike in the last housing crash). For those who can’t negotiate a solution who left the forbearance program without a work-out, many will have enough equity to sell their homes and leave the closing with cash instead of facing foreclosures.
   
   
   
4. The forbearance program in the past two years provided homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available.
   
   
   
5. When foreclosures hit the market in 2008, they added to an oversupply of houses already for sale, resulting in a 9+ month supply of listings. Anything over a six-month supply can cause prices to depreciate. The current inventory shortage of homes nationwide (and in the Charlotte region) means the months supply of homes for sale still in seller "territory."
   
   

   

Want to stay on top of foreclosure and short sale home listings in the Greater Charlotte area?

Contact Nina Hollander with Coldwell Banker Realty and we'll send you a list of homes as they come on the market.

SEARCH ALL CHARLOTTE REGION HOMES FOR SALE 

This Charlotte region housing market update on distressed property sales trends is provided  by  Nina Hollander/Carolinas Realty Partners with Coldwell Banker Realty, Greater Charlotte residential real estate experts serving  Charlotte region home buyers and sellers for 20+ years.

If you're considering selling or purchasing a home in the Greater Charlotte region, I'd love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how:

"The Right Broker Makes All The Difference"

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