Charlotte Homes

After watching the most recent real estate update by Steve Harney (a respected national real estate expert) there is some information that is important that the public understands. First we need to look at who is today's home buyer.  It is the first time home buyer and investors.  The volatile stock market and employment uncertainty has definitely affected the high-end market.

In our office, consisting of 96 agents that covers the entire Charlotte market, our average sales price to list price is up to 91%....it was staying around the 87% mark for several months but we are finally seeing this number creep back higher.  Our average days on market is now 130 days.....down from this time last year when it was 146 days. 

So what is causing this shift...

Part of the sales price to list price percentage increase is due to the higher buyer demand during the summer months...but mostly these numbers have changed because the home price index has gone up in the past 6 months...this is because the percentage of the national real estate market that is in foreclosure has dropped for 5 consecutive months.  The number of home owners who are 90+ days delinquent on their home loans is dropping...which means we will start to see less foreclosures hit the market in the next 6 months.

Foreclosures are selling at a 40% discount.

Short sales are selling at a 21% discount.

Until we get rid of the high number of distressed properties this real estate market will remain in a slump.

Nationwide there are still 14,000 real estate sales every single day.  The buyers are focusing on resales and distressed properties...not new construction...the best deals are not going to be new construction for a while.  Builders may not admit this but look at their inventory and you can tell that they know it is true.  They have sold their spec homes and are not building new inventory.

Real estate is still a great investment and from January 1st, 2000 to September 1st, 2011 its' return on investment was 6 times that of the Dow Jones.

Charlotte, NC has recently received many high rankings from respected magazines, websites, and real estate experts.  They believe the Charlotte metro area will have one of the strongest housing recoveries in the country. 

In February, CNNMoney ranked Charlotte as the 9th best housing recovery bet.  They noted that the corporate expansion and the number of companies relocating to Charlotte, NCwill lower the unemployment rate by putting many of the Charlotteans back to work.  The article also mentions how good properties are getting multiple bids and are moving quickly.  This has proved true.  I have experienced more multiple offer situations this year than last.

Builder Magazine recently ranked Charlotte, NC the 8th healthiest housing market for 2011.  The number of building permits rose by 65% and they note that the Charlotte housing market was never hit as hard as many other areas around the country.  The median home price dropped from its peak value of $204,000 in 2007 and was around $190,000 at the end of 2010.

 Other North Carolina areas led the top 10 for Builder Magazine.  Raleigh/Cary, NC were 1 and Durham/Chapel Hill received the 2nd spot.  People will always want to live in the Carolina's.  We have some of the best mountains, beaches, and cities and sit halfway between New York and Florida...thus, the halfback state.

What Is Causing Buyers To Finally "Get Off The Fence"?

Ask any real estate agent, developer or builder about the current real estate market and they will probably tell you that things seem to be picking up.  Allen Tate's new home division has had its best 4 months in the past 2 years.  What most people want to know is what is causing the increase.

It seems that you will get a different answer depending on who you speak with about what has caused the increase in buyer activity.  I am not convinced that anyone really knows.  The news that we watch and read is confusing and contradictory.  The professional economists can't give us a clear cut answer so how am I suppose to explain this to my clients when they ask about the market?

It may be that interest rates are starting to go up and this has caused many to go ahead and buy at today's prices.  It could be that with summer right around the corner, people want to go ahead and move into the subdivision and school district of their choice and move on with their lives instead of letting the recession dictate their every buying decision.  It may be that the stock market has been strong recently and that the consumer confidence level has spiked. 

There are some things that we do know...Charlotte, NC still has over a 10% unemployment rate, there is a record number of foreclosures that are suppose to hit the market in the near future, the country still has a dysfunctional financial system and an appraisal system that makes sense to no one.  The Middle East is stirring and almost every real estate expert is agreeing that we will not fully recover from the housing recession before the end of 2012. 

What are your thoughts about the housing recovery?

Charlotte House Prices are still going down but Interest Rates Rise

Charlotte house prices have not shown any appreciation or recovery in 2010.  The dropping list prices were enough to incent many to purchase their first home or to upgrade into a larger house.  In south Charlotte, we were hopeful that the area would bottom out and begin to see appreciation growth of a couple percentage points but this never happened.  The list prices continued to drop throughout the year and are now sitting at very attractive prices with interest rates that seemed to have hit bottom last month and on their way back up.

30 year interest rates flirted with the 4% mark but are now around 4.625% and they seem to still be going up.  Home buyers need to be aware of what the interest rates are doing because this effects their real cost of buying a house.  The interest rate can be just as important as the list price and I believe this has caused several of the buyer clients I have been talking to for the last 6 months to get serious about making a move during the 2010 holiday season.

For More Information about South Charlotte Real Estate

Charlotte Real Estate Update

Forbes.com released an article today that explains how September 2010 stacks up against August 2010 and Sept. 2009.  I want to look at how Charlotte's real estate market in September 2010 compares to what we were seeing in previous Septembers.

Here are the numbers....

Charlotte's Real Estate Activity in September 2010:

What is interesting is that last month we had the lowest number of new listings, the lowest number of pending contracts, the lowest number of closed units, and the lowest list price to close price percentage.

Is this good news for sellers in Charlotte???

The lower level of total and new listings in our market not only helps sellers by there being less competition but it should also be an indicator that the market is recovering.  What I think is scary for sellers is that the average list price in Sept. 2010 is the same as the boom years, but the average close price is back at the levels we saw in 2003-2004.

Notice the 88% list price to close price %. 

 This is much lower than what is normal in a "good market".  This low percentage was caused mostly by the high number of distressed properties in the market (the foreclosures and short sales that have been selling at discounted prices).  A couple weeks ago the Business Journal reported that in the 3rd quarter of 2010, Charlotte's foreclosures were up 34% year over year.  With so many distressed properties still in our market, expect to see property values continue to drop for a few more months.

There are 50% less buyers in Charlotte's real estate market when compared to 2005-2007 and there is downward pressure on property values because of the high percentage of distressed properties.  It is becoming harder for buyers to obtain financing and we are having more trouble getting the Charlotte houses to appraise.  If you are a seller, make sure your house is priced competitively, in great showing condition, and be prepared to help today's buyer with closing cost money.

Will Stopping the Foreclosures cause a Slower Housing Recovery?

I completely understand why they have stopped foreclosing on houses until the major banks are able to put procedures in place that are fair to home owners and to the states' economies.  One thing I am not sure about is whether or not the banks will go ahead and continue the foreclosure process on houses that are sitting vacant.  If the owners have already left the premises, then these houses need to go ahead and be sold so that the market can begin recovering from these low sale prices.

Everybody knows that we cannot experience a sustainable housing recovery until the high numbers of foreclosures and short sales have exited the market.  This will probably not happen until we see real job growth so I strongly believe the banks should do more loan modifications and less foreclosing.

I have heard the argument on television and online about how agents will be hurt from briefly stopping the foreclosures.  I do not believe that the majority of real estate agents will feel the effects of this.  There are only a handful of agents in Charlotte, NC that work directly with banks on marketing and closing foreclosures and/or HUD houses.  These agents will see their income drop until the banks continue their right of foreclosing.  You could argue that the agents that work so closely with the banks are part of the problem.  I have spoke with a couple of them when calling to ask a question about a property for my buyer client.  In two cases, the agent did not know anything about the property, had not been inside of the house, and was not familiar with what was happening in the subdivision.  Instead, these agents are so overwhelmed with a high number of foreclosure/HUD listings that they pay a part time employee to go out to place a yard sign, lock box, and to snap a few pictures.

Do the banks realize that they are paying for a full service agent but only receiving the marketing and services of a flat fee real estate company?  Do other major cities around the country have only a few agents that are receiving the large number of foreclosure listings and do these agents in your area actually know about the specific properties or are they just experts in the foreclosure process?

It will be interesting to see what, if anything, changes when the banks begin foreclosing again.  The banks are not in the business of holding and managing houses that they have foreclosed on.  The banks want to get these houses out of their portfolios and have the right to do so.  I hate to see home owners being foreclosed on but at the same time the market needs to adjust and this can only take place when the high number of foreclosures and short sales are a thing of the past. 

Information on the Short Sale Process

New brick townhomes in the Ballantyne/Blakeney area of Charlotte, NC for under $150,000

If you are looking for a great deal in a rapidly growing and popular area in Charlotte, NC then you should visit the Cedar Walk community that is being built by Meeting Street.  Even with a slow market, this community has been very successful in putting most of their units under contract. 

Most of the townhome floor-plans have 2 master bedrooms on the second floor with a 3rd floor loft extension.  These townhouses have 2.5 bathrooms and are around 1400-1500 sq. ft. with fenced back yards. 

The brick townhomes are priced from $132,900 - $149,900.  They are a very short distance from a grocery store, restaurants/bars, boutique shops, and a farmer's market.

This is a great opportunity to live in new construction in south Charlotte for under $150,000.

Search for new construction in the Charlotte area

CNNMoney Spins June's New Home Sales Numbers to Sound Positive

If you were reading the headlines today on the CNNMoney website you may think that the new construction housing market has made a complete rebound.  The article I am mentioning has a headline that reads "New home sales rebound 24%"

This is great news right?  Well, yes it is great news but if you continue to read it also states that the new home sales in June represent the second worst month since the numbers have been tracked, dating back to 1963.  While 24% is a huge increase, you must understand how bad the month of May was to understand that this 24% increase may not be as large as you think.

As I blogged in an earlier post, our office sales numbers in May 2010 were the lowest they had been through the entire housing crisis.  These extremely low numbers were caused by the wave of first time home buyers taking advantage of a tax credit that expired at the end of April 2010 (April yeilded the highest level of sales since early 2007).  Everybody knew the numbers were going to dive, but everybody had hoped the numbers would hold stronger than they did.

It's a tough market for sellers who bought their house as an investment.  It's tough for buyers who want to take advantage of this market but have weak credit.  It's tough for real estate agents who have been use to skating through the job and always having friends and family that were interested in buying/selling real estate. 

I remember when I started in real estate in 2007.  Our leaders were telling us that the market would fall but would return within a year or so.  Well, its been three years and there is still a lot of doubt and skepticism about the nations real estate market.  At the time I felt unlucky about entering the business in a diving market.  Now I understand that this has made me a better agent and now I know that we as agents must adapt to what is happening in our markets.  The real estate agents that are complaining the most in this market are the ones that continue to implement the same marketing and networking strategies that were popular in the late 1990's. 

Have you been thinking about making your house GREENER?

I just finished a class on Sustainable Housing and Building Green and learned what it means for you to own a Energy Star house.  It pretty much comes down to how well the house is sealed. 

The normal buyer thinks that windows and doors are the only items that need to be sealed in order to keep the utility bills low.  Energy Star builders make sure that all of the seals around the air vents, attic areas that are adjacent to the house, attic access points and baseboards are properly insulated and sealed.  They bring in a separate inspector to pressurize the house to make sure that the house is sealed well enough to qualify under Energy Star's standards. 

What can you do to live GREENER?                

Here is what everybody heard for the last decade..."change your air filters, don't use the lights and preserve water!!!!!"  We have heard this so much that it has been drilled into our brains.

Lets talk about making our houses so energy efficient that they are eventually self sustainable.  (Wouldn't it be nice if the electric company paid you monthly for the excess energy your house produces)...learn more about self sufficient houses here.

Most of the energy that your house uses is coming from your HVAC system (over 60%).  If you have a  system that is more than 10 years old then you probably should get a new one.  The newer heat pumps and furnaces are much more energy efficient. 

New houses are more efficient because they are using sprayed insulation in the walls, the duct work is better/tighter and the appliances are more efficient.

Investing in new windows can help make it easier to hold a set temperature in your house.  This will keep your bills much lower.

Energy efficient washer and dryers are becoming very popular as well as tank-less water heaters. 

As an agent it is easier for me to see the changes that are taking place.  People are GOING GREEN and this will become an important factor to the normal buyer. 

Charlotte, NC was not supposed to be strongly affected by the housing downturn.  Everybody in Charlotte was told that we would be one of the last cities to feel the housing slump and would be one of the first cities to stabilize.  This has not played out theway that everyone expected. 

Worries about Charlotte's real estate market did not really scare the public until Wachovia was bought by the San Francisco based Wells Fargo.  Charlotte is known as a banking city.  The scare ooccurred again when there was talk of Bank of America being moved to New York.  Now that we have a new CEO located in Charlotte this has been forgotten.  The city has always attracted a large amount of young college graduates and has always had the jobs to support the growth.  Since Wachovia was bought by Wells Fargo it does not feel that this is the case.  Only recently has Charlotte been able to again attract the young/educated crowd because of new companies moving to the area because of Charlotte's affordability. 

Over the last several months the city has not grown as fast as it was projected.  Uptown real estate has felt the worst of the market.  The condo prices Uptown have dropped dramatically and there are still a lot of short sales.  In 2007 there were multiple sky-rises on the way up and there was talk of many more.  The downtown area was suppose to be getting a lot of retail on the streets to help support the living style of Uptown residents.  One of the condo buildings (The Catalyst) was unable to contract enough of the units so the building has turned into a rental high rise.  Another project (The Park at Caldwell and Third) failed and has been bought by a group of investors.  They hope to turn the building into a hotel/condo building.  The VUE is the other large building that looks to be almost complete.  The builders stopped building for about a month because they had not received money from the investors.  The building is under construction again and they hope to close several of these units in September 2010.  The VUE will be the tallest condo building in Charlotte. 

The Uptown condo market is projected to be the the area of Charlotte that appreciates the most over the next 10 years.  This is probably because this is the area that has taken the hardest hit and because the Charlotte Chamber of Commerce is continuing to lobby hard for Uptown retail. 

The housing market has seen declining prices over the past 2 years.  These prices are continuing to drop but it feels that we are finally starting to stabilize.  Buyers are still wanting to present low offers and they expect to have most of their closing costs covered.  With interest rates on the way up I expect to see some move up buyers dropping the prices of their houses so that they can lock in a low rate on their next purchase. 

High unemployment in Charlotte is the number one cause of the slow recovery.  Once the unemployment rate drops I expect the Charlotte housing market to be on the way up.