Posted by: Todd Long | January 19, 2008

What is a housing market slump, really?

Century 21 Hecht Realtyby: Todd Long

Broker-in-Charge Century 21 Hecht Realty, Mooresville, NC

It’s been all the rage in the year 2007 and in the beginning of 2008 for the media to discuss the housing market slump.  When the media discusses a housing market slump what are they really talking about?  Are they saying house prices are off, which is depreciation, or are they talking about the number of homes sold? As with most things in real estate, it depends on the local market being discussed.  
Let’s look at both a little closer. Nationally we have seen over heated real estate markets like Florida, and California have amazing price run ups over the past several years and have hit a ceiling in 2006.  Buyer basically said “we are not paying that much for a home anymore” and are sitting on the sidelines until the home prices correct.  This caused a drastic change in the number of homes that sold and therefore forced home sellers to lower their price to bring a buyer to the table.  This caused depreciating home prices across the board in those over heated markets.  We have to remember that these are two separate issues that sometimes have a cause and effect on each other, get a lot a media attention, and in 30 second sound bites get merged together.  
Now let’s look a little closer at North Carolina, our local Charlotte Metro Real Estate market and more specifically at the general Lake Norman Real Estate market, which our 4 Century 21 Hecht Realty office primarily service.  Recently a new report from the Federal Government was released that said that if you are looking to invest in real estate North Carolina is one of only 4 states still seeing home price appreciation as reported by The report goes further to say that North Carolina has 4 of the top 20 cities seeing appreciation with Charlotte seeing 8.1% appreciation over the past 12 months.  That is a very different picture than the rest of the country and shows a lot of strength in our local economy.
Year after year we see modest but steady price appreciation in the Lake Norman and Charlotte Metro real estate markets including 2007.  Dean Treftz of the Wall Street Journal recognizes this trend in the Charlotte Area. As mentioned before, the other side of this issue is number of homes sold.  In the Lake Norman area we have seen 2% appreciation in home prices from November 2006-November 2007.  However we have seen the buyers are less active in the market this year.  The number of homes sold is down 30.96% from last year this time and the number of home on the market are up 16.17%.  Home sellers are getting a higher price for their home if they are marketed correctly and in good condition, but the home is on the market an average 64% longer than a year ago.  Last year in November a home averaged being on the market 5 months and now a home averages 8 months on the market in the Lake Norman area.  
So are we in a housing slump in the Charlotte area?  We are seeing fewer homes sell this year but the homes that do sell are returning a profit for the seller.  In my next article I will share with you why I believe we are experiencing less buyer activity in our market.  I’ll also share how and when I feel like this will be corrected.


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