The Real Deal on 2nd Quarter Charlotte Home Prices

Yes I know, Charlotte Home prices are up-- up 7% says the Charlotte Observer today. National real estate powerhouse Zillow , ranked Charlotte third best in the country with prices up 9%--so is that it? Well no, not exactly... not wanting to rain on anybody's parade-- how is Charlotte real estate really doing?

The Observer just asks what the average sales price of a home was-- with no comparison by size, area distribution, or type. (single family, townhouse or condo) I think it is impossible to say how much property has appreciated in 2007 from those numbers. And Zillow? Check their last post on my site, Response from Zillow, to see if you can figure out how they compute their Zestimates, both regionally and nationally. I don't think I get it yet.

So how did I figure the 2nd quarter results you see below? Easy, I computed average square foot price of homes in the area, over the three months of April through June 30, and compared it to the same area, in the same three months in 2006. Its simple division, and the Average Square Foot price of Sold homes increased 4.73% on 7.58% fewer sales.

Here then are the 2nd quarter numbers:

	Charlotte Metro Area, 2nd Quareter 2007
	2006	2007	Inc/Dec %
Solds
Units Sold	14084	13017	-7.58
Average Cost Per SF	110.77	116.01	4.73
Average Days on Market	83	77	-7.23
Expired Listings	1922	2439	26.90

The obvious is that the average cost per sq foot rose 4.73% in the 2nd quarter of 2007 compared to the same period in 2006. But the number of units fell 7.6%, and look at the "Expireds"-- expired listings, those that didn't sell and expired, are up more than 25%.

So then if the number of sales is off less than 8% , but the prices are up 4.73%, that's good, isn't it? In today's market, across the country it is good. While Zillow and I disagree about how good Charlotte is doing, we are in agreement that Charlotte is making it through the national housing decline very well.

There you have the three different methodologies, no prize for guessing which I favor. I like mine because it is based on actual sales, totally objective numbers, that when taken in the aggregate, and averaged based on the heated square feet of a home, should be a representative sample and the leading indicator of how well Charlotte is appreciating. Also, they are easily verified by anyone with access to the MLS.

In the past I've done market reports by zip code, but I'm changing that and I'm working on a list of "bell weather" neighborhoods to keep you posted on-- and taken together, they will provide a unique "value index" not unlike the Dow Jones.

So why can't I just shut up and be happy with Zillows 9% or the Observer's 7%? Isn't that great?As a Realtor, wouldn't I want those numbers to be true? Yes I would and we are doing well, just not that well, and next week I may be sitting in your house, trying to estimate the value of your home to put it on the market. I'm sure you will have seen some of these headlines... and I want your home to sell at the best price, in the shortest time. One thing is certain, transparent real estate is here to stay and only the homes priced right will sell.

I'll post further on these 2nd quarter results as time allows.

tm