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Crisis In The Housing Market
Mon October 17, 2011
Housing Recovery At Various Stages Around The U.S.
The housing market may be getting more attractive for buying a home. Foreclosures continue to rise, but prices are stabilizing in some places across the country. Just as communities experienced the housing bubble differently, they are also feeling varying degrees of recovery.
Charlotte: 'Two Chandeliers In The Dining Room'
In Charlotte, N.C., a foreclosed McMansion goes for half the value it was in 2007. Lee Brown, a Realtor in the area, says Charlotte has a community of "starter castles" that were built at the height of the housing boom. They have "really ornate exteriors" with French, German and Swiss influence "all tossed into the same house," she says.
During the boom, she says, many people moved to Charlotte for high-paying jobs in the banking industry, but lost them when banks shut down after the crash.
One of the foreclosure properties sold for $1.275 million in 2007; Brown expects it to now sell for about $650,000.
"And you're talking a beautiful home, and you can see it's got the hardwood floors, and it's got the fancy kitchen," she says. "And you're going to get two chandeliers in the dining room — and who needs two chandeliers in the dining room? But you know, hey, there's something for everybody."
East L.A.: 'Starting From Scratch'
In East Los Angeles, Realtor Felipe Acuna works in a once-glamorous neighborhood that's trying to make a comeback.
"City Terrace is ghetto fabulous. Investors are coming in and taking these properties that are not financeable because of the conditions that they are, and they're improving them dramatically," he says.
In 2004 investors began snatching up City Terrace properties left and right. Houses in awful condition sold for up to a $500,000. Today many of those same homes go for just over $100,000, and efforts to gentrify the neighborhood are starting from scratch.
"The house on Ramboz Place was built I believe in the '30s. You weren't in the city. This was like the edge of the world here, but it was beautiful," Acuna says. "But unfortunately they're not as beautiful as they were back then. You have the freeway you can look at now and count the cars if you wanted."
The City Terrace housing bubble burst in 2007, and Acuna says he saw it coming.
"Even though you were like a gardener or a housekeeper and suddenly you were able to buy a half-million-dollar home that two, three years earlier was only worth $250,000," he says. "Unfortunately I tell people I probably could have increased my business two- to three-fold if I would have took in those people and put them into something they couldn't afford and not worry about it, but I like to sleep at night."
D.C.: Subdued Bidding Wars
In Washington, D.C., things never cooled off that much. The District is considered recession-proof due to the high concentration of government jobs. In some neighborhoods, the market for starter homes is beginning to look a little like the boom period, between 2005 and 2007.
During that time, there were bidding wars, says Valerie Blake, an associate broker with Prudential Carruthers Realtors. One war for a fixer-upper property raised the price to $435,000 from its listing price of $220,000. There were 28 bidders.
"In 2011, we're seeing a lot of first-time buyers reentering the market. Bidding wars have once again returned, they're just not as frenzied as they once were," she says. "You might have two or three people bidding instead of 25. You might have an increase of $10- or $15,000, rather than hundreds of thousands. But they have to be perfect in this market. You cannot just throw anything out there...and expect that there be people lined up at the door."