This morning I got a glowing email from a real estate agent referring to the article today in the Charlotte Observer. Yippee! “Area home prices are showing signs of improvement. Overall, the Charlotte market is holding up better than many others around the U.S.”
Darn that S&P/Case Shiller Home Price Index. And you, Office of Federal Housing Enterprise Oversight, with your numbers showing that Charlotte area home prices rose 5.2%. Can we talk? First of all, both of you are talking about a 12-month period ending June 30th. A lot has changed in our housing market in the past two months, so exactly how valuable is a 12-month report dated June 30th? Second of all, one of you doesn’t include “subprime lending, many government-backed loans and the largest mortgages.” Aren’t these kind of important in this current real estate market?
So, our area housing marekt is “showing signs of life”? In Lake Norman we currently have 1763 active listings and a total of 82 homes sold in the past 30 days. This means we have a 21.5 month supply of active listings. A balanced market has 6-8 months of inventory. In the same period last year we had 143 home sales. Is 3-times the number of listings and a 42.6% decrease in the number of home sales your idea of showing signs of life?
If you go on to read the Charlotte Observer article you will find that they do note a 37% regional sales drop in home sales, a decline of 52% in Mecklenburg County building permits…the lowest since “at least 1998? and a few other insights that might challenge their optimistic headline.
All of you that read my blog regularly know the statistics about the Lake Norman real estate market. Frankly, they are not showing signs of improvement but there is some indication that we are leveling off. The reality is that until our inventory of homes is back down to a 6-8 month of supply on hand we are going to see downward pressure on prices.
I have been through the recession in the early 1990’s. I know our Lake Norman market will come back to life. We will again be THE destination for so many looking for the perfect place to live and when it does I will be the first to let you know! Until then, please read the small print!