High-end home foreclosures next housing dilemma?
Posted July 13, 2009
Raleigh, N.C. — 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.