THE CHARLOTTE HOUSING MARKET
By Chuck Graham, Charlotte Real Estate Expert
By Chuck Graham, Charlotte Real Estate Expert
Chuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard University.
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Story Highlights
• Charlotte still presents some of the more stable pricing statistics
• Now is the best time to start looking and buying
It is important to understand that the Charlotte MSA (Anson, Cabarrus, Gaston, Mecklenburg and Union Counties in North Carolina and York County in South Carolina) housing market, despite its challenges, is in much better shape than the nation, its Census Division (South Atlantic), or North Carolina.• Charlotte still presents some of the more stable pricing statistics
• Now is the best time to start looking and buying
Perhaps the best measure of the broad for-sale housing market is existing home sales.
2007 vs. 2006
A comparison of 2007 with 2006 for the nation shows a 17% drop in existing home sales. The South Atlantic Census Division (District of Columbia, Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia) presented a 23% drop (primarily because of Florida), and North Carolina an 18% drop. Charlotte presented only a 4% drop – a remarkable accomplishment given the national difficulties.
The median price of existing single family homes has dropped 7% nationally over this period, versus steady pricing in Charlotte.
As we look at the new housing market the best measure is residential permits.
National residential permits were off 26% in 2007 vs. 2006. The South Atlantic Census Region was off 36% (again primarily because of Florida), North Carolina was off 18% and Charlotte, 19%. The new housing market in Charlotte is closely tracking North Carolina and its resistance to the South Atlantic Census Division and the National malaise.
The median price of new single family homes has dropped 5% nationally over this period, versus a 4% increase in Charlotte.
THE CHARLOTTE HOUSING MARKET
2007 vs. 2006 with additional details for 1Q08
Twelve Months Ending 3Q08 vs. 3Q07
Although 3Q08 data is not yet available as tracked above, some data sources are available for the Charlotte Market (Cabarrus, Gaston, Iredell, Lancaster, Lincoln, Mecklenburg, Union and York Counties) for the years ending 3Q08 and 3Q07.
A comparison of the twelve months ending 3Q08 vs. 3Q07 reveals an existing market down 34% on a 1% decrease in the median price where as the new market was down 32% on a 4% increase in median price.
The total (new and existing) Charlotte for-sale housing market first slipped 2Q07 when total closings fell 5% 2Q07 versus 2Q06. Median pricing however continue to climb at 3%.
3Q07 saw a 14% drop in closings with an additional 4% increase in the median price. 4Q07 reported a 20% drop in closings with 5% increase in the median price.
1Q08 was a particularly difficult time period with total closings dropping 36% on a 1% increase in median price. Both new and existing closings were equally hurt. 2Q08 appeared to stabilize with closing deceleration remaining close to 1Q08’s 36% at 37%.
Pricing, however, decreased by 1%.
3Q08 has continued this stabilizing trend with total closings remaining at a 38% deceleration but pricing dropping 3%.
This analyst had previously believed the Charlotte market will bottom out 2Q08 with further reductions in total closings and a first drop in median pricing. Although the market appeared to have stabilized 3Q08 we are concerned that 4Q08 data will show further stress due to new difficulties in the financial markets with particular attention on Charlotte and Wachovia.
Although we had previously noted that Charlotte’s residential title transfers never saw the run-up in the investor market, the sub-prime/alt A market, or pricing that has been seen nationally and believed its difficulties would be less severe the current difficulties within the credit markets are bringing national and international difficulties. Nevertheless once these issues are resolved Charlotte should return to normalcy considerably more quickly than the nation
As partial proof, note that Charlotte still presents some of the more stable pricing statistics as tracked by Case-Shiller.
We continue to suggest to home buyers without a house to sell that we are near the bottom of the Charlotte market – and the best of times to consider looking and buying depending upon your ability to satisfy desire.
For home buyers with a house to sell consider that good times, average times and difficult times present very similar pricing differentials, what you sell your house for will be matched by a similar value in the house you buy.
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