Will Charlotte Home Prices Go Down?

Being a homeowner in Huntersville, I watch the Charlotte area housing market. I walk at least once per week in my neighborhood and have noticed a number of houses still on the market since last spring. I notice the ones that have not had a price decrease and the ones that the New Price sign seems to stay up for months. I have also seen one that has lowered the price twice. I do not think one has sold in here since September.

It seems to be a trend in the area. The papers are reporting sales but they are not nearly as numerous as they were a few years ago. The notices take up much less space in the paper. Some papers only report on a monthly basis now rather than a weekly basis.

Then I read that $60,000 was the average retirement fund balance. Being a Statistics major I got to thinking on this. This number seemed low. Then it all came back to me and I realized the housing connection and this number.

I was at First Union in the 1980’s. It was my third job after college. In 1986 I was thinking of leaving. I had over 4 years to go to get vested since one had to be on the job 10 years to be vested in any pension plan. The 1986 Tax Reform Act passed. It said that on January 1 of 1989 anyone that had been with a company for 5 years was vested. I stayed until May 1989. It is not a lot of pension but will buy some groceries when I am ready to use it. Others went ahead and left. They still had no pension and were in their 30’s and 40’s.

The 401K plan came in to replace the pension plan. People started putting some money in the plan. A few years later they started tapping at least a part of it for down payments on houses. I think that people have also tapped this and home equity lines for children’s college tuition, cars, and weddings. I do not think they have put the money back. If the house is for sale, maybe they cannot afford to lower the price. Maybe they cannot lose the money. Maybe people assumed the lifespan and growing population they had seen as children.

We boomers are aging. Some from previous generations still live in their own home. Sometime all of these homes go on the market. I hope I am wrong about the amount of retirement funds in these homes.