PRICES RISING OR STAYING STEADY
New-home sales prices have been rising more than existing-home prices. Here are percentage changes in median prices for all types -- single-family homes, townhomes and condos -- during the first quarter, compared with the same period in 2007.
| County | All homes | New homes | Existing homes |
| Cabarrus | 5% | 19% | 3% |
| Gaston | 1% | -4% | -1% |
| Iredell | -8% | -6% | -9% |
| Lincoln | 18% | 18% | 7% |
| Mecklenburg | 3% | 3% | 4% |
| Union | -5% | 1% | 1% |
| Lancaster, S.C. | 17% | 27% | -4% |
| York, S.C. | 5% | 8% | 1% |
| 8 county | 1% | 4% | 1% |
SOURCE: Market Opportunity Research Enterprises
Charlotte-area home sales and construction plunged during the first quarter, outpacing national declines as the local housing slump deepens.
The eight-county region has now seen four straight quarters of worsening declines, and the current period may be even more painful.
"It was bad, and I believe second quarter will be worse," said Chuck Graham, a longtime expert on the area real estate market. "We're getting into the worst time for us."
Here are key results from two major data trackers for the eight-county area:
• Home closings fell 36 percent compared with the first three months of last year, according to Market Opportunity Research Enterprises in Rocky Mount.
• Building permits, a key indicator of future sales, fell 45 percent. Union County, recently one of the nation's growth hot spots, led with a 65 percent drop, based on the MORE report.
• Builders started 48 percent fewer new homes, falling to the lowest level since 2003, according to Metrostudy in Charlotte.
Overall, the region continues to grow. One factor hurting home sales has been that newcomers can't sell their houses elsewhere, so they delay buying here.
Sales prices typically held steady or rose, an important bright spot. A national index also shows the Charlotte market as the only one of 20 urban areas where home prices are still appreciating. But those measures are scant comfort to anyone struggling to sell.
Scott and Angela Gibson have dropped the asking price on their Charlotte home nearly 9 percent, to less than $175,000. They moved back to Tennessee in November after he was laid off. They're straining to pay rent and the $1,400 mortgage payment. One month, they sold their lawn mower to raise mortgage money.
"We are an average middle-class family, and this has left us financially spent and worn out," she said.
`Late to the party'
Charlotte logged a record year for sales and construction in 2006, even as housing markets elsewhere slowed. The region's sales rose further during the first three months last year. Since then, they've tumbled hard."We're late to the party, but we have arrived," said Matt Martin, an economist with the Federal Reserve branch in Charlotte. Talking with builders and Realtors, he hears little about a turnaround this year. "The hope is that everything bottoms out this year."
Graham and others say this quarter -- usually the prime spring selling season -- could mark the low. Recovery, when it begins, could be slow, almost imperceptible at first.
Bob Hecht, owner of Century 21 Hecht Realty in Denver, N.C., is looking to 2009 for improvement.
"I think 2008 will be a year you work hard to do OK," said Hecht, in business since 1971.
The market has been walloped by stricter lending, meaning many people no longer qualify for mortgages. High foreclosure rates, brought on by years of lax lending, put more houses on the market at a time of weak demand. People are struggling with rising prices for gas, food and other goods.
Union County sales and construction may be especially hard hit because of added concerns about inadequate sewer capacity. But some builders say they have building lots, ready to go.
"The sewer and water problem shouldn't be having any effect on the sales of homes right now," said Mike McGee of family-owned McGee-Huntley Construction in Monroe. "That's only going to affect us in two, three years, when these lots are used up."
He has houses for sale in Union and Cabarrus projects, but isn't building more until those sell.
Newcomers fueled growth
Newcomers, like the Gibson family, have propelled the Charlotte region's growth and kept houses selling.
The Gibsons studied several cities as they contemplated a move in 2006. They liked Charlotte's climate and proximity to the beach. They bought in the Davis Lake community, in the University City area, drawn to its pool, clubhouse, small lake and the wide choice of homes.
But they found costs higher than they expected, from taxes to child care and food. Last October, he was laid off from his job in marketing for a lawn and power equipment company. It was time to leave.
They first asked $191,900 for their house on Windchase Lane. They're at $174,900 and willing to negotiate.
"When we bought ... there was such a high competition for good homes, and when you saw something good, you had to make a bid quickly," Angela Gibson said.
No big drops expected
Charlotte didn't experience the explosive price growth seen in some bubble markets. Likewise, the area hasn't seen the price plunge rocking some of the once hot markets.
Martin and others don't expect that Charlotte will experience big price drops. But Graham, of Newton Graham Consultants in Charlotte, is forecasting a decline during this quarter as the crunch continues.
For the first three months, average sales prices rose 2 percent for the Charlotte area, compared with the same period a year ago, according to MORE. Median prices, which reduce the impact of extremes, rose 1 percent.
There were wide variations by county. Rising prices for new homes propped up the overall pricing figures. Prices for existing homes, a larger share of the market, were basically flat.
Lynn and Jeff Fore, eager to move closer to his job and their church in Huntersville, put their Union County home up for sale last July. They're in the upscale Brookhaven neighborhood, in Union County near Matthews.
"The builder is able to offer great incentives, so it's really hard for people trying to sell resale homes to compete with that," she said.
Meanwhile, her daughter Hannah, who is 11, is hopeful she'll make the dance drill and cross country teams as she starts seventh grade later this year.
"If she gets in, we'll probably stay," Lynn Fore said.
-- Staff writer Deborah Hirsch contributed.
-- Stella M. Hopkins: 704-358-5173
