This week our listings saw an average of 4.4 showings each. That’s a huge jump from the average of about 3 each over the past weeks. Admittedly, the average is a bit deceiving as we have several listings that are aggressively priced and getting more than their fair share of showing traffic. Nonetheless, I am pleased to see an increasing pattern.
Yesterday it was reported that existing home sales were up 6.5% in December over the previous month. There were also plenty of media stories that spread gloom and doom about how prices have tumbled. Of course you have to read the fine print in each article. One such article at MarketWatch.com said that prices fell 2.2% in November according to the Case-Shiller 20 city index which tracks 20 metropolitan cities. Then it went on to say that they fell “a record” 19.1% in the past twelve months according to the 10 city index – a smaller sub-set of cities. This same article goes on to say that an index from the Federal Housing Finance Agency found that prices fell 8.7% in the past 12 months. Are you confused yet? I certainly am. I guess this is why they call it spin.
Okay, so we know that home prices on average have fallen in the past twelve months. We also know that all real estate is local and just as Charlotte didn’t experience the boom that California, Las Vegas, & Florida had, we aren’t experiencing the severe damage either. It is still a tough market here and prices have declined. But if you are to objectively consider the outlook for the markets, you have to look at all the data not just pieces that support the gloom and doom.
Supply and demand determines prices. That’s basic elementary school economics. Right now supply is high and demand is low. Prices are dropping. Surprised?
Low prices and the recently fallen interest rates are likely to increase demand. As the number of home sales increase, supply will go down. When all this happens, prices will start to go back up. The first step that we can track is pending home sales and more importantly the actual home sales figures. I started this post by referencing the article that home sales were up 6.5% nationally in December. That’s a good start. Unfortunately, they weren’t up in Charlotte. We weren’t the first city to see the boom and we aren’t the first city to see the recovery. But isn’t it nice to know that it is coming?