June 20, 2019

Charlotte Home Equity Falls, Self-Financing Options Diminish for Unemployed

Charlotte made the news this week, but not in a way that makes homeowners happy, especially those who are un- or under-employed.  The Case-Shiller Home Price Index found that values in the Charlotte market are back down to 2004 levels.

In Charlotte, homes are going for 2004 prices. Last year, more than half of the homes sold in surrounding Mecklenberg County were foreclosures, says Mark Vitner, a senior economist with Wells Fargo.

“There’s a huge oversupply, and a lot of people are struggling,” says Vitner, who works in Charlotte. “We’re expecting it to fall even further in 2011.”

The banking industry, which helped Charlotte boom over the past two decades and accounts for roughly one in every 11 jobs there, was hit hard during the recession. The city lost 12 percent of its financial jobs in 2008 and 2009, according to the Labor Department.

Adding to the region’s economic woes, about a third of jobs tied to the auto industry also vanished in the downturn, said Michael Walden, an economist at North Carolina State University in Raleigh. Charlotte’s unemployment rate was 12.8 percent a year ago, well above the national rate. It has fallen to 10.8 percent, still more than twice what it was when the recession started.

Low home equity + high unemployment = limited options

Two years ago, when mortgages were as easy to qualify for as , well, mortgages, a few months of unemployment could be offset with a home equity loan. Now that home equity has deflated and access to credit has tightened, few self-financing options are available for unemployed or under-employed homeowners.

If you find yourself in this position, it’s time you get the facts about the legal solutions bankruptcy protection provides.