Breaking Down the Data
By Chuck Graham, Charlotte Real Estate Expert
By Chuck Graham, Charlotte Real Estate Expert
Chuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard University.
Charlotte Housing Market Bottoming OutChuck Graham
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Story Highlights
• Charlotte presented only a 4 percent drop
• The median price for a single famiy home dropped 7 percent nationally
Despite its challenges, Charlotte’s housing market is in much better shape than the nation, its Census Division (South Atlantic), or North Carolina. But where are we headed and what’s in store for the next three months? To understand where the market will go, we must look at how the Charlotte market performed in last quarter compared the country, the region and the state.• Charlotte presented only a 4 percent drop
• The median price for a single famiy home dropped 7 percent nationally
With so many reports offering seemingly conflicting outlooks, understanding what’s really happening can be difficult. Perhaps the best measure of the broad for-sale housing market is existing home sales.A comparison of 2007 with 2006 for the nation shows a 17 percent drop in existing home sales.
The South Atlantic Census Division (District of Columbia, Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia) presented a 23 percent drop (primarily because of Florida), and North Carolina an 18 percent drop. Charlotte presented only a 4 percent drop – a remarkable accomplishment given the national difficulties.
The median price of existing single family homes has dropped 7 percent nationally over this period, versus steady pricing in Charlotte.
As we look at the new housing market the best measure is residential permits.
National residential permits were off 26 percent 2007 vs. 2006. The South Atlantic Census Region was off 36 percent (again primarily because of Florida), North Carolina was off 18 percent and Charlotte 19 percent. The new housing market in Charlotte is closely tracking North Carolina and its resistance to the South Atlantic Census Division and the National malaise.
The median price of new single family homes has dropped 5 percent nationally over this period, versus a 4 percent increase in Charlotte.
Twelve Months Ending 1Q08 vs. 1Q07
Although 1Q08 data is not yet available as tracked above, some data sources are available for the Charlotte Market for the year ending 1Q08 and 1Q08.
A comparison of the twelve months ending 1Q08 vs. 1Q07 reveals an existing market down 16 percent on a 1 percent increase in the median price where as the new market was down 20 percent on a 9 percent increase in median price.
The total (new and existing) Charlotte for-sale housing market first slipped 2Q07 when total closings fell 5 percent 2Q07 versus 2Q06. Median pricing however continue to climb at 3 percent.
3Q07 saw a 14 percent drop in closings with an additional 4percent increase in the median price. 4Q07 reported a 20 percent drop in closings with 5 percent increase in the median price.
1Q08 was a particularly difficult time period with total closings dropping 36 percent on a 1 percent increase in median price. Both new and existing closings were equally hurt.
Although the Charlotte market is expected to worsen further during 2Q08, we expect stabilization during 3Q08 and improvements, although slight, beginning 4Q08.
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