Happy New Year to the Charlotte Real Estate Market!

This past week our listings saw an average of 2.3 showings each.   That’s pretty strong showing traffic considering that last weekend was the New Year’s holiday.   Maybe its because 2010 was a tough year and I’m glad its behind us, but to me the signs point to a welcome change toward recovery in 2011 for Charlotte real estate.    So, plan to visit this site often for the good news that’s coming about real estate!

The year is starting off on a great note.   On the first business day of the year, the DOW Jones industrial average hit a two year high.   The retail sales over the holidays were strong and confidence is coming back into the markets.   Charlotte real estate sales are also showing signs of improvement.   There are two very key factors that are bucking the normally seasonal trends.   First, home sales in December are already showing at least a 23% improvement over the prior month.   Second, pending home sales is 20% higher than at this same time last year.  

This news is huge for Charlotte because typically in December sales trend downward and bottom out in February.   I discussed this in more detail in my blog a few months ago.   The anomaly this year can be explained by the effects of the first time buyer tax credit which is still impacting the market data, along with a bit more  certainty in the  economic and political situations.

The last few months of 2009 and the first half of 2010 showed higher than would have been expected sales numbers because of the tax credit boost.   The demand was crammed into that time period and then slowed immediately thereafter.   From July 2010 until November 2010, buyers have been sitting on the fence and pent up demand has been brewing.   Now that some uncertainty regarding the November elections has been removed and the economy is improving, the pent up demand seems to be releasing itself a little earlier than expected.   I’m very hopeful that the spring real estate rush is simply just going to kick off a little early this year and all the signs are pointing in that direction.

Granted, there is much buzz about a significant number of foreclosures that are expected to hit the listing inventory this year.   So although demand should start picking up, prices are likely to stay down for another year or so.   But the buying opportunities are ripe and that’s for sure.

On another note, I’d like to comment on some recent news that came out in late December about the Case Schiller Real Estate Index.   The story reported that six cities including Charlotte showed further price declines through October 2010 and predicted that real estate here will experience a “double dip”.   To me the story was full of fear mongering.   There was really nothing in the story that we didn’t already know, especially if you’ve been following this blog.

The report shows that as of October 2010 prices had fallen about 4% in Charlotte.   That certainly shouldn’t come as any surprise.   The authors gave the impression that they were surprised about this price drop, but the fact remains that Charlotte was one of the last cities to boom and also one of the last to see the drops.   Regarding the comments that a double dip is coming, my response is that I didn’t realize that prices ever went back up!   We definitely saw a surge of sales activity during the tax credit months, but the markets have not seen any really sustainable improvements here in Charlotte until just recently.

The problem with these kinds of news reports is that the data is too old to give an accurate picture.   First of all, the story reports data through October and that data represents sold homes.   For a sale to happen, a buyer and a seller first have to make a contract and that usually happens 30-60 days before the sale.   So the data being reported in the recent Case Schiller report represents buying decisions that were being made in August and September, right after the expiration of the tax credit!   The data I see regarding sales in December and pending home sales shows a different picture and one that I’m excited about.

Pop your champagne corks….here’s to Charlotte real estate in 2011!

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