Posted by: Todd Long | January 23, 2008

Ya’ll Ain’t Seen Nothing Yet

A TV investing “guru”, Jim Cramer of Mad Money, came out in October to say “the housing market is the absolute worst place to invest”.  When I heard this I began to smile.  I know from experience that as soon as the media gurus in any field say it is the absolute best or worst time to do anything, it is the right time to do the opposite.  Remember in 2003-2005 when the national housing market was red hot.  A lot of housing markets had home prices going through the roof with buyers offering $10,000, $20,000 and even $30,000 over asking price just to get into the game.  The year 2005 was hailed as “the best real estate market in history”.  You couldn’t turn on the TV or radio to an investment or real estate talk show without hearing “now is the best time to buy” or you would be left in the dust.  Then buyers in those over heated markets of California, South Florida, Myrtle Beach and others said enough is enough.  We are not paying exorbitant prices anymore and they stopped buying and started renting or renovating their current home to fit their needs.  Home sellers and home builders didn’t immediately see what was happening and in 2006 we started building a lot of inventory in the national housing markets.  The year 2006 was marked as a “bad year” because it wasn’t as good as 2005 (the best year in recorded history).  Yes, 2006 was a slower year.  It was actually the second best year in real estate but slower non the less.

So here we are looking back on the year 2007.  Where do we stand in our Charlotte regional market?  To get an accurate answer we must look at a little regional real estate history.  While a lot of national real estate markets were over heating for various reasons over the past few years we saw our market growing at a healthy 8%-10% year after year fueled by job growth, low unemployment, and land to expand for homes and business.  So this year while those over heated markets of the past get the majority of the headlines for severe depreciation we still had 3% average appreciation.  Did we see less homes purchased in 2007?  Absolutely we did.  Inventory has risen and therefore we are at 3% appreciation and not 8%-10% as in the past.  In the past few years we have seen an exponential growth in the number of people moving to this area and they have needed homes for their families.  This year they have had trouble selling their homes in other parts of this country and many have moved here and are renting until they can sell that out of state home.  Sellers beware; you are not going to get top dollar in 2008 until the inventory subsides.  You should get a fair price but your home probably won’t sell if it is over priced. 

I’ll wager my guess at the 2008 housing market, just like everyone else!  I think the market conditions nationally will be back on track by late summer of 2008 and inventory will start to subside.  When that happens, watch out Charlotte area!  If you thought the flood gates of people wanting to live here was high in 2004-2006 ya’ll ain’t seen nothing yet.  This area has a lot of upside potential.  We’ve got a true four seasons here, great entertainment in Lake Norman, the home of NASCAR in Mooresville, Panthers Football, drivable distances to the mountains and beaches, good paying jobs,  relatively low housing cost (for now), and friendly people just to name a few.  Why did you move here?  It seems that more people have moved to the Charlotte area than the number of people that grew up here.  I am originally from this area and I have enjoyed seeing this area become a melting pot.  It’s only going to get better folks.  As I mentioned before, the only thing that is stopping most people from moving here now is they can’t sell their homes in other parts of the country….yet.  That change is coming near the fall of 2008.  You will begin to see the national media talking about Charlotte, NC and what a great place the Queen City is to call home. 

Oh, and remember that TV investing guru from before who came out this fall with the words of wisdom that this is the worst time to invest in real estate?  Well, in December he was on NBC’s The Today Show and said “the housing market will be ok in late 2008”.  I must be right if Jim Crammer agrees with me!

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