Wednesday, June 27, 2012

Caught In A Time Warp

The economy continues to gather strength, and property values have stablized.  In the June 27th issue of the Charlotte Observer there is a story that speaks to the fact that housing prices have risen for the second month in a row.

This comes as little surprise.  There are fewer properties available on June 27th (108) than there have been for 12 years.  This lack of supply coupled with a rise in demand (there it is again, supply and demand) is beginning to force prices up.  Of the past 9 transactions I have been involved with, 6 have had multiple offers.   From a sellers standpoint, that is encouraging.

The pressure on financially distressed property has also lessened.  Many banks have developed creative programs in an effort to keep people in their homes, and Short Sales are taking the place of Foreclosure activity by a significant amount.

What is also happening is that developments that have been caught in the recession are emerging owned by new companies at a significant reduction in pricing, and they are being agressively marketed to fill up the empty spaces.  Properties such as Ro28 in NoDa, The Garrison in the Fourth Ward, Bloc 90 will soon be marketed, The Park, now Skye, is being completed and available at attractive prices, and the grand daddy of them all, The VUE, has been purchased out of foreclosure for slightly over $100 million.  That is approximately $220 a square foot.

Couple the lack of existing inventory with an increased appetite to purchase with banks easing credit restrictions with these developments caught in a Time Warp and you have the making of a new "Gold Rush".

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