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2:17 a.m. • 2-8-12

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High-end home foreclosures next housing dilemma?


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Foreclosure rate improves
Foreclosure rate improves

Even million-dollar homes in nice neighborhoods are not immune to the housing crisis.

Experts say that the increasing number of high-end homes going into foreclosure is the next big housing dilemma.

Nearly 30 high-end homes – priced at above $500,000 – are in foreclosure in the Triangle as of Monday, including a home on Hunter's Meadow Lane in Raleigh that a Parade of Homes entry listed as worth $1.2 million.

"It's a beautiful home, one the builder intended for himself," said neighbor Kim Powell. "The turn of events in the economy just changed all that."

Powell lives next door and is surprised someone hasn't bought the house.

"The next shoe to drop is that higher end of the market – the $500,000-plus," said local investment adviser Ken Bell.

The problem is two-fold.

He believes that in some cases, buyers have entered into risky loans with payment options.

In other cases, builders are not able to sell a house before it goes into foreclosure. So, banks are offering incentives.

Wes Carroll has been trying to sell a high-end home in the Regency Manors subdivision of Cary for 18 months. Two years ago, he said, the home would not have been on the market for that long.

To help keep the house from going into foreclosure, he said banks are working with builders, like him, to help buyers with closing costs and lower interest rates.

He said he believes it is working and that he has seen a lot more traffic in the past 30 to 45 days. He recently received an offer.

That's what neighbors on Powell's street are also pulling for, she said.

"We're optimistic that the right person will come along," she said.

RELATED TOPICS: Cary, Raleigh

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"He believes that in some cases, buyers have entered into risky loans with payment options."

You mean like the folks talked about in earlier stories here, and elsewhere, that had bought high dollar houses, through programs aimed at helping low income people buy houses? If a guy who can afford a $300,000 house, buys a $500,000 house, it just proves he's no smarter than a guy who bought a $100,000 house that couldn't really afford it.

I'm not inclined to feel sorry for either of them. Living above your means, is dangerous, regardless of how much you make. I'm glad I never bought into it.

And yes I understand that's not the whole story on the economy, but it was the tipping point. Economists warned about it for YEARS before it happened.

Large homes mean big profits for the builders at an enormous cost to the environment. Now that Raleigh is overcrowded and not as beautiful as it once was, people who can actually afford to live in a nicer area will move somewhere with clean air, good schools and other amenities this city used to have before the developers destroyed it. Leave some space for parks and open area instead of turning Raleigh into an asphalt jungle. Most of the "keep up with the Jones type couldn't really afford those monstrosities anyway.

BULLDOZER,

Do you plan on building smaller, more affordable houses in the future?

I think all of us builders who make it through this will be much better business people on the other side. I live within in my means(live in a paid for home and a large one too) and still am concerned about my business' future. Wherever you are on the housing debate, our industry is paramount to this country making a turn for the better. Here's to a great fall and better spring.

Politicians added to the problem, but no one forced anyone to live beyond their means. Choices people made got them where they are. Take responsibility.

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