Every city/place/neighborhood is different. The media speaks of the rampant foreclosures across America but breaking it down by an area reveals the best opportunities. The Charlotte market has two areas that present the best discounts- homes that sold for over $600,000 and homes that were a creation of the sub prime lending also known as "starter neighborhoods". Charlotte Starter neighborhoods are newly constructed homes between the price ranges of $130,000 and $200,000. The largest discounts are the least stable neighborhoods. What are you calling an "unstable neighborhood"?
An "unstable neighborhood" in Charlotte is typically a the least expensive subdivision in a given area. Charlotte subdivisions that were booming in 2005-2007 fell victim to the lending frenzy. Investors all thought they had an original idea; buy a new home on the least expensive neighborhood and rent it out for a few years (minimal maintenance/oversight since it was a brand new home). Their thoughts were that the Charlotte neighborhood would appreciate, especially after the new construction was complete, and sell to make a handsome profit. Great idea, right? Wrong. They had several errors in their flawed logic. First they failed to realize that it was nationally common knowledge that Charlotte was one of the best places to live. Investors throughout the nation all were cashing in on Charlotte Real Estate. Hmmm? Loans were almost being given to anyone. What do you think the caliper of renters were like during this time period? Now what do you think happens to these neighborhoods when renters dominate them? Yards? Cars in the yards? Trash? Vandalism? Needless to say, the appreciation was not going to do well in a healthy market. Now the sub-prime borrowers also flocked to these neighborhoods. How do you think their "first home ownership experiences" were? Not too good.
Many of these investors and sub prime loans have collapsed into Charlotte Foreclosures. With each foreclosure the prices drop more. The banks are actually holding back some of the homes so the neighborhoods do not collapse too much further. Are there opportunities? Yes. As the challenged loans cycle themselves through, a sturdier home buyer will move in. This will rejuvenate the neighborhoods over time but patience is required.
The other discount Charlotte Real Estate niche market is in homes over $600,000. There were many people getting these high dollar homes with no money down and many were commissioned sales people. The economy takes a downturn and now that mortgage is near impossible. In addition, builders from across the nation flocked to purchase Charlotte building lots and wanted to be a part of this explosive million dollar housing market in Charlotte. They were in the midst of building hundreds of homes when the market collapsed. This market dried up almost in an instant! Many Charlotte builders completed their million dollar homes only to still be paying on them 2 years later. Many have already been returned to the bank. Deep discounts can be found in this range.
The middle ranges offer some opportunity but they are limited. The market is strong enough that the current home owners are content to wait out the economic down turn. There are some foreclosures in the middle price ranges but the competition is so steep there are typically multiple offers and a bidding war. Not a lot of profit to be had with this type of competition.
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