This week our listings saw an average of 1.8 showings each. However, I am seeing a trend where some listings are getting plenty of traffic and others are not getting much at all. Most of my listings are in the $350K to $850K range and all are experiencing the same pattern. Those priced well in comparison to recent home sales are showing and those priced comparably to other active listings are not getting traffic. Buyers are looking for deals; even then, buyers are slow to act. Given the current economy, the only way to sell in this market is to be realistic and adjust prices to attract the few buyers out there. As I mentioned in last week’s blog, Charlotte was recently named number one ‘Best Place to Live’ by Yahoo! Real estate is still selling here, but that does not mean that an inflated asking price will work.
Recently, I attended a meeting where I heard well known real estate economist, John Tuccillo, speak. Among other points, he walked us through the three phases of a recovering real estate market:
Phase One – The number of active listings begins to decrease.
Phase Two – Average days on market begins to decrease.
Phase Three – The sales price to list Price ratio begins to increase.
So where does the Charlotte market stand in the above three phases? Well, the truth is that I don’t think we’ve quite entered into Phase One yet. In my monthly E-Newsletter this month, I reported data from the Carolina Multiple Listing Service showing that the supply of listings in Mecklenburg County has increased to 9 months in April. (To be in phase one we should be see a decrease in supply). Curiously, the days on market in April 2008 actually decreased to 88 days from 90 days in the previous month. (Which is the indication that we are in phase two of a recovering market.)
My prediction is that our market will remain relatively flat at least through the end of the year. As homes sell over the next few months, their closing prices will become the comparables for new listings. Those currently listed should not expect to see much in terms of price increases at least until next spring. The options for a seller in this situation right now are 1) price aggressively, 2) rent the home, 3) or if the option exists, wait and relist when the market improves.