Charlotte Home Prices, The Real Deal On August Prices
Prices are UP, volume is DOWN, reflecting both the underlying strength of Charlotte fundamentals and the affects of the national downturn/recession in housing. This is a look at 13 “bell-weather zip codes” for the greater Charlotte area, from Waxhaw to Mooresville. You might want to get a coffee, this is a long post.
Each zip has the number sold in 2006, and 2007, and the % decrease/increase from 2006.
Each zip has the increase or decrease of average Cost per SF in the % increase/Decrease.
The ATS Ratio is the average Asking To Sold price, for example a 131 ATS means Listing prices 31% higher, on average, than the average solds. Inventory is expressed as the number of months inventory based on the pendings for that month (an admittedly skewed number in August)
All data is derived from the Charlotte MLS based on single family homes only, but is not provided by the MLS.
These zip codes account for 38% of the 7 County region the Carolina MLS reports on single family homes sold in August of 2007.
There are 13 zip codes in good to very good condition, despite many fewer buyers. I found c couple if zip codes in negative territory and they will be the subject of future posts.
5 of the 6 double digit ATS, Ask to Selling ratios, were the bottom 5 appreciating region- the meaning? If the underlying value isn’t perceived to be there, asking price has little influence on final sales price. Question, could the unrealistically high Listing Prices be driving the Sold prices down? I think so…
So there has been a sizable drop in sales volume this year… the commission checks will be smaller -wah! But is that bad for the real estate market? Well it is when it forces prices down, there’s no doubt about it… and that is the result (natural result) nationally of the slowdown, falling prices. But not here.
Despite everything that’s been thrown at residential real estate, at Charlotte real estate — a nationwide slowdown that began in the 4th quarter of 2004, increased through out ’05 and gaining momentum in’06 with daily “bubble” stories in national news in the media , the sub-prime debacle which has taken conservatively 10% of the buyers out of the market, and the fact our market is dependent on relocators and the slowdown around the country has kept people who want to move to Charlotte from coming, because their homes won’t sell…
Despite all that, prices rose on single family homes for the entire Charlotte MLS area 5.1%- based on the average cost per square foot for sold homes versus August 2006. Wow.
It’s as if we are defying a natural law like gravity, because everywhere, everywhere
there has been this kind of drop in units sold, prices have fallen. (I put this out here knowing some of you will check around the country– be sure and tell me if you find ANYwhere else with similar numbers.) The natural result of a 20% reduction in demand is falling prices.
So why are the Charlotte cost per square foots up?
The reason? The reason is Charlotte’s underlying value, our fundamentals, are granite-like. A robust local economy driven by the financial sector, low unemployment, good paying jobs, and generally good government. If we were a stock Warren Buffet would love us! We have a mild climate that folks from around the country are discovering. We still are not heavily taxed.
And much of our real estate is still undervalued.
As the real estate industry has grown more transparent– the market has grown more national and international, people look at Charlotte homes online from around the world and still say, “That’s a good deal.” And they are right.
Then people come and visit and find it’s prettier than they expected, the city is cleaner, the parks nicer, the people nicer… and they know value when they see it.
And that value radiates outwards.
For those of you reading from afar, you might want to know about Days on Market– a stat that is meaningless here because it only counts the last listing. Thats right the MLS just covers the last listing agreement- for example you list with Agent A for 6 months, and then fire him and call me. I sign you up and put you in the MLS and presto you are a “new” listing, you’ve now been on the market one day. I sell it the following week, and your Days on market is 8. See why I can’t use their numbers? In its place, I use “month’s inventory” based on pending sales repeating (a stretch or worse for August) but still it is the best indicator we have. Inventory by zip codes ranged from a low of 1.8 in 28277, averaged just under 3. In general, times on the market have risen, it is hard to say how much. Good homes in good neighborhoods have moved reasonably quickly this year.
What’s it all mean? I’ll be breaking it down more in coming posts.