Local home prices rise, best among 20 markets

Charlotte Oberver Staff Report

Posted: Tuesday, May. 26, 2009

Charlotte-area home prices showed a slight monthly gain in March, the first uptick since last summer, according to a widely watched index released today.

Sales prices rose .3 percent compared with February results from the S&P/Case-Shiller Home Price Index. That was the best monthly performance among the 20 urban markets measured by the index and another milestone that could signal the region's housing market has reached a bottom.

Charlotte-area sales prices remain down compared with March 2008, marking a full year of declining prices. But at 9.3 percent, the yearly decline also showed a tiny improvement over February's reading.

Comparisons to a year earlier are important because they compare similar periods and reduce the impact of seasonal effects, such as the typical rebound of home sales during the spring.

Still, monthly results can signal a trend. The Charlotte market started a string of monthly declines in July and peaked at a loss of 2.6 percent in December's index. The index is especially meaningful because it measures repeat sales of existing houses.

Nationwide, the index recorded a 19.1 percent decline for the first quarter, compared with the first three months of 2008. That was the sharpest drop in its 21-year history.

However, March was the second consecutive month since October 2007 in which the index for the 20 markets did not post a record annual decline.

With its 9.3 percent yearly decline, the Charlotte area remained in fifth place in March, behind smaller annual declines in Denver, Dallas, Boston and Cleveland. Those are the only five regions in which annual declines are under 10 percent.

Denver posted a .1 percent monthly increase and Dallas home prices remained flat in March.

Phoenix remains the hardest market in the index, with a decline of 36 percent compared with March 2008.

HUD rescinds $8000 tax credit down payment

Earlier this week, HUD Secretary Shaun Donovan mentioned that the first-time homebuyer tax credit could be used as a down payment, but that may no longer be the case.

The mortgagee letter with the program details has since been removed from the HUD website; a call to the FHA confirmed this had occurred.

The employee I spoke with said the program is essentially pulled as of now, but nothing official has been released regarding the fate of the so-called tax credit advance.

So as it stands now, it appears as if the tax credit cannot be used for a down payment. It’s unclear why the FHA withdrew (or at least stalled) the program, though it could have something to do with perceived risk involved.

Allowing first-time homebuyers to purchase a property with nothing down is certainly high-risk, and the practice of using tax credits for down payments is fairly similar to the seller paid down payment assistance loans that nearly sunk the FHA.

Last summer, FHA Commissioner Brian D. Montgomery said the agency realized $4.6 billion in “unanticipated long-term losses,” largely due to an increased number of seller-funded loans in its portfolio.

The loans, which accounted for 14 percent of all FHA loans outstanding and 31 percent of all FHA foreclosures, are no longer available.

If they hadn’t been banned, the FHA would have needed appropriations of $2.5 billion to operate.

While I’m sure the program could help some borrowers in need, it could also lead to abuses, which may outweigh the positives.

Kannapolis - NC Research Facility Update

Rowan-Cabarrus Community College recently signed a lease agreement with Castle & Cooke for a $26 million classroom and laboratory building on the NC Research Campus. This extension onto the campus is key to the college's efforts to grow its biotechnology programs in order to prepare our local workforce for the many new life sciences jobs being created there.

As RCCC makes strides to break ground on their new building, groundbreaking research forges ahead at the NCRC. A landmark $1 million donation from Charlotte businessman Herman Stone has launched On the Shoulders of Giants: Carolina's Campaign to Cure MS, an effort to raise $5.2 million to fund multiple sclerosis research at the Campus. Elsewhere in the City, Harmony Labs is investing $3.5 million to expand their facilities and create new jobs.

Beazer to pay $30.5 million in suit

Shareholders had sued the homebuilder, saying they were misled about business practices.

Bloomberg News

Posted: Wednesday, May. 06, 2009

Beazer Homes USA Inc. agreed to pay $30.5 million to settle a class-action lawsuit over allegations it misled shareholders about problems with its mortgage-lending practices that led to a federal investigation.

Under terms of the settlement, the company denies any wrongdoing, Beazer said Tuesday in a statement. The settlement is subject to final approval by U.S. District Judge Clarence Cooper in Atlanta.

Shareholders sued in March 2007 and accused company directors of failing to prevent improper business practices including illegal mortgage lending. Beazer's illegal mortgage lending practices allowed the Atlanta-based company to sell more homes and conceal its declining business, shareholders said in the complaint. The lawsuit followed an Observer series that found the company arranged loans some buyers couldn't afford and violated federal lending laws.

Beazer, once a major Charlotte-area homebuilder, said insurance would cover the settlement payout. The settlement covers shareholders who purchased stock from Jan. 27, 2005, to May 12, 2008, according to court filings.

In September, Beazer settled with the U.S. Securities and Exchange Commission over claims it fraudulently misstated its earnings. The agreement didn't require the company, which denied wrongdoing, to pay any financial penalties.

Beazer rose 51 cents, or 16.7 percent, to $3.57 in New York Stock Exchange trading. The stock has climbed 126 percent this year after falling 79 percent in 2008.