Subprime Mortgage Fallout Has Yet to Dent North Carolina Market

By Richard Barrington
Local Lender Columnist
Aug 1, 2007
When it comes to buying a house, there is strategy and there are tactics. Strategy entails the bigger-picture things: determining what your needs are, calculating how much of a new home loan you can afford, and deciding where to look. Tactics include the details of implementing your strategy: choosing a mortgage provider, and deciding whether to lowball or bid aggressively when it comes time to make an offer. While the housing market has softened across much of the United States, in North Carolina it might not yet be time for buyers to play hardball.

North Carolina Maintains Above-Average Price Growth in 2006

The subprime mortgage market has experienced an increase in mortgage foreclosures, and a resultant tightening of standards for new home loans. Hearing about all this, it would be natural to expect falling prices and desperate sellers. However, a buyer acting on that assumption in North Carolina would be in for a disappointment.

It turns out that North Carolina has maintained price strength that is well above average. Last year, real estate prices in North Carolina rose 8.19%. This beat the national average of 5.87%, and ranked 13th among the 50 states. In other words, the North Carolina housing market is hardly a bargain basement.

Longer-Term Perspective Creates A More Reasonable View of Prices

Does this price strength mean the North Carolina market is overpriced? Not if you take a longer-term perspective. Housing price growth in North Carolina trailed the national average overall for the past five years.

In other words, current prices shouldn't be viewed as untouchable. Just don't get too cute when you make your offer, because sellers still have the upper hand in North Carolina.

Source
Office of Federal Housing Enterprise Oversight

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.