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August Market Report- 28277

Zip Code 28277, is a popular South Charlotte zip.

Average	2006	2007	% Inc/dec
CPSF	133.96	136.33	1.77
# Solds	154	144	-6.49
ATS Index		105.21
Months Inventory		2.80

Where CPSF is the Average Cost per SF of sold homes. So the ATS (Asking to Selling) is a manageable 105%, Inventory 2.8 month supply, prices up and even the number of solds, is only down slightly.

All numbers are derived from CMLS data, not provided by CMLS

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

South Charlotte Market Report- 28277 - July

Zip 28277, South Charlotte , is having a sturdy if not all together pretty 2007. Prices are up, the number of sales are way down, and expired listings went through the roof. 28277 is Charlotte's 2nd highest income zip code, and includes neighborhoods like Providence Country Club, Ballantyne Country Club, The Blakeney Area, Ardrey and more. One of Charlotte's most popular zip codes, here are the July numbers, and the 3 month trend ending 7/31/07.

	2006	2007	Inc/Dec
Solds July	155	102	-34.19
3 Months Ending Jul 31	461	366	-20.61
Average Days On Market	46	50	8.70
Expired Listings	562	841	49.64
Average Cost Per SF
July 1-July 31	134	138	2.99
3 months ending 7/31	132	138	4.55

What I found particular interesting was that Average Days on market- DOM, was up only 8% but expired listings were up 50%. July sales were sharply off sales a year ago, yet prices both for July and the 3 month held at an average of 138 per sf.

So what could explain increased pricing in the face of dramatically fewer homes sold, and at almost the same DOM? I think it reveals the popularity and strength of the area, for homes in good to excellent condition. I think we are on relatively safe ground saying that the 102 homes that sold in July, versus the 841 expired, must have been both in better condition and better priced.

So what conclusions could a buyer or seller draw? I think sellers need to have their homes in good to excellent condition, and be realistic in their pricing. It is not 2006.

Buyers? There is a good selection here. Hopefully you could find more than one excellent choice, and still get a great home in one of the best areas of Charlotte at around 138 per square foot. Not bad at all!

All the numbers are taken from the Charlotte MLS and are believed to be accurate but are of course not guaranteed. Builders do not list every home so MLS numbers are better indicators of the resale market. I believe transparent real estate is better real estate.
Enjoy the slide show of Ballantyne below:

SW Charlotte Real Estate Update- 28278

So we heard last month that the nationwide slowdown in housing has finally caught up with Charlotte in the form of fewer sales in June, with prices (thankfully) and year to date numbers still holding strong. Over the next 2 weeks I'll be posting about various South Charlotte Zip Codes to see how they are faring. This week I'm looking at South West Charlotte, zip code 28278, one of the fastest growing zip's in Charlotte, and a couple of popular new home communities. All of the numbers are taken from the Charlotte MLS, and are believed to be reliable but not guaranteed. Builders do not list every home, therefore every sale is not listed either, and 28278 is all about the new home market. Still the numbers tell a story.

	2006	2007	Inc/Dec %
Solds July	43	54	25.58
3 Months Ending Jul 31	135	156	15.56
Average Cost Per SF
July 1-July 31	142	105	-26.06
3 months ending 7/31	117	103	-11.97

So healthy gains in units sold in 2007 (25% in July, 15% 3 mo average) are somewhat offset by lower prices in 2007. This reflects the substantial discounts being offered by new home builders- in particular the national new home builders- over 2006 prices.

Berewick and the Palisades followed suit.
At Berewick reported sales were 50% higher than in 2006, with average cost per square foot falling from 94 to 89.00/sf, a 5% drop.

At the Palisades, reported sales were 50% higher as well, with average square foot costs falling form $244/sf in 2006 to $221/sf in 2007, a 9% drop.

The drop in average square foot prices for the entire zip is a reflection of the new home market which dominated 28278 which is suffering sharper declines then the re-sale market.

So what conclusions should a buyer make if they like SW Charlotte? Well SW Charlotte is a beautiful area of Charlotte and extremely convenient to Uptown- the increased number of sales are proof of that, but what would the wise buyer do?

1. Buy inventory only, and at a discount. Inventory are homes that are ready now or will be ready within 90 days. Most builders will deal on these, and in this market they would be foolish not to. Insist your buyer agent (hopefully us!) make them an offer for 5-7% less than they are asking. If there is no inventory, don't buy there.

2. Buy in the lower to middle of the price ranges, avoiding the top unless the prices are too good to pass up!

That's all for now!

The Problem With Builders, Part II

As you know, I do love to sell new Charlotte homes-- they account for about half of the Charlotte real estate market-- as I said in Part I, I have a strong preference for Inventory homes or spec homes, sold at a discount. And we are always looking for great Charlotte communities, communities with pools and other amenities. What I am interested in is value. Around here, those best values are found in quality communities, in near to completion Inventory or Spec homes, as builders frequently make deals on these homes. They discount these because their profit is literally running out of the house, like sand in an hour glass, profit they can never get back.

Building from scratch, it is easy to "over-option" the house at the design center- "The granite is great, tile is better, and hardwoods on the first floor all make sense. The only time to upgrade lighting is now, isn't it? And we need the 3rd floor. The extra bath? Yes we need that too." I hear this all the time. It is not uncommon for upgrades to add 50, 60 or $70,000 to the price of the home. But the builder isn't telling you one important item: the builders lender will finance you but the next lender may not. Said another way, the options are here for your enjoyment, don't count on them for resale. In the worst case, you buy a home, lose your job and need to sell. If you paid retail, and you have a lot of options, your home may not sell or appraise for what you paid for it. What's worse? Many builder's business model requires them to sell options.

Only one builder acknowledges this publicly, it is in the form of a statement made part of the contract. Read this carefully to understand its full meaning:

"When you purchase options in your home, you should purchase them with the understanding that ,while the option may add functionality or enjoyment to you, they may not influence the appraised value of the home. Our policy on options is straight forward; our business model does not depend on option profits." (Italics mine)

The above builder who must remain nameless, includes most of the common options, making option purchases truly "optional." His communities appreciate very, very well, and this is one of the reasons.

Happy Buying!