September 2011 New Home Sales

Data released today show new home sales increased 5.7% September vs a revised (-1%) August. Year over year new home sales were down .9% and median sales prices were down 10%, continuing the trend towards smaller more efficient homes.

http://www.census.gov/const/newressales.pdf?

Luxury Home Sales Bounce Back

This article in today's Wall Street Journal corroborates with what we are seeing in The Point and around Lake Norman as we currently have 6 homes priced over $2,500,000 under contract either pending or contingent/conditional with 5 of these in The Point and another just outside of it. The highest priced at $4,299,999. We have not seen such activity in the high end for a at least a couple years.

link to the article here

Charlotte ranks No. 16 for quality of life

Portfolio.com, a Biz Journals company has ranked Charlotte 16th overall out of 67 cities for quality of life. Click here for an interactive chart ranking the various cities by numerous categories.

A sign of a market turnaround? Maybe? Hopefully?

Interesting to see two new spec homes coming on the market by Simonini Builders in The Point. We haven't seen any spec building for quite some time and Simonini Builders were one of the first to peel back and pull out of Sconset a couple years ago, so they must be seeing some good things now.

Both homes, listed through the Crescent Communities Realty sales office, are on the smaller side for The Point. The lower priced home is listed at $554,900 ranges between 2300-2800 square feet so it's priced somewhere between $198-$241 per sq foot. A boat slip is available for $22,500 MLS#: 940855. The second home is priced at $758,900 with a range of 3400-4100 sq feet, put it at between $185-$223 per sq foot, including a boat slip, MLS#: 940881. Call me if you want to see either properties.

The Point Golf Course homes sold

This scattergram gives a different glimpse to information and depicts every home on the golf course in the point sold between 2002 and 2009 with it's respective price per square foot. Color markers are used to represent more than one sale of the same home.

 click on the chart.

The reason to use a quantitative approach like this is to turn numbers into knowledge which more information should help both sellers and buyers in their decision making process and aid in removing the emotions home selling or buying can have on logic.

Meredith Whitney speaking at a Hedge Fund Conference last week

Meredith Whitney, the famed banking analyst who correctly forcast the problems in the banking system due to real estate starting a few years back was speaking at a Hedge Fund conference last week and made the following remarks. Take a look at my earlier note on John Paulson and his positive comments on the housing market. Guess one is right and one is wrong.

"If you look at what happened last year, I would say a vast majority of the banking sector's profits and capital creation was government induced. In the first quarter, it's highly arguable that certain companies wrote up assets. People lowered their provisions on losses."

"What has kept home prices stable - and make note that politicians and banks are eating their own cooking because they really believe home prices are stable - they're stable because there's been a ton of inventory kept from the market. So if you control the supply, you can control the price without controlling the demand.

"Here's a statistic that I find fascinating. This is just for the top four banks. If you look at nonperforming assets - that's loans that haven't paid over 120 days - the size of that is 1.5 times all of the chargeoffs that banks have incurred since 2005. So you think credit has stabilized, mortgages have stabilized? Non-performs have ballooned so they've more than doubled since the beginning of 2009, and that's just stuff that has to start going on to the market, and interestingly, this quarter you're starting to see housing supply reach the market. That to me triggers another down leg in housing, so to me, I'm steadfast in my belief that there's going to be another double-dip in housing."

"There's huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that's not paying come to market, and when do banks recognize the chargeoffs? I think you're going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don't know. I think you see a huge leg down in asset prices when you see the supply reach the market. So no, it's not factored into valuations. No, it's not factored into bank guidance. And yes, I think it's going to be a big problem for the banks."

John Paulson calling for a V-shaped Housing recovery

John Paulson, the famed hedge fund manager known for making 15 billion dollars by betting the housing market was going to decline is speaking to his investors today and is now expecting that housing is in a V shape recovery and he expects housing prices to increase by 3-5% in 2010, followed by an increase of 8-12% in 2011.

Lake Norman Homes sold comps vs last 4 years

This chart represents the number of homes sold for the 1st four months of the year back to 2006. The blue bar represents total homes sold and the red bar is total homes more than 1 million sold. This is for the Lake Norman area 13 sub area 2 which is the Brawley peninsula, The Langtree Peninsula and the 150 peninsula. It's nice to see tha market coming back this year as we have 92 sold vs 54 last year.

Builder Magazine's annual top 20 healthiest real estate markets for 2010

The Charlotte area was noted as #3 in this magazine's annual list of the healthiest housing markets. Also of note is the Carolinas made 7 of the 20 spots. They say the job market in 2010 is expected to add 2% more jobs and the high household formation of the area make it attractive.
For the full article click here

10 Easy Ways to Boost Property Value

Here's a link to some good ideas to help you get your house sold:  click here
they include:

1. Paint the exterior
2. Complete all needed repairs
3. Purchase a home warranty
4. Furnish the home to sell
5. Upgrade front yard landscaping
6. Create a quick kitchen makeover
7. Think spa, not bathroom
8. Install soft and hard window treatments
9. Replace carpet rather than just cleaning
10. Don’t overlook your closets

Interesting Housing Reads

Edward Glaeser: Why Your House’s Value (Probably) Won’t Rise (Economix) from NY Times

Fannie Mae National Housing Survey (Fannie Mae PDF)

January New Home Sales at record lows........50 years WOW

Sales of new single-family homes fell 11.2% in January to a record low of 309,000. Sales of new single-family homes declined in Northeast (-35.1%), South (-9.5%) and West (-11.9%) but rose in the Midwest (+2.1%).  Could this be weather related and is snapback due for February's numbers.

Inventories of unsold homes rose to a 9.1-month supply, while the median duration to sell a new single-family home rose to 14.2 months . The median price of a new single-family home fell 2.4% from a year ago to $203,500. On a year-to-year basis, the median price of a new home has dropped each month from December 2007, with one exception in October 2009.

Case Schiller Index

Today's Case Schiller real estate index was reported this morning and average Charlotte prices moved down 3.8% year over year.

National Housing Scene

Looks like a big supply/demand imbalance. There are 230,000 newly built empty housing units for sale. Then there's 3.29 million owner occupied's for sale. On top of that there are 3.5 million empty units for sale that have been taken off the market for unspecified reasons of which 1.7 are now bank owned (This is the shadow inventory via the foreclosure process). So there are 7 million units of supply out there out of a total of 112 million units and with apartment vacancy rates at 11%, rents declining and now with so many buyers upside down (21.4% according to Zillow) and strategic defaults gaining in popularity (see WSJ article) it's tough to build a case for an inflationary housing market in the near term. Then again there's always prayer and hope.

Quotes during Housing Bubble

"The notion of a bubble bursting and the whole price level coming down seems to me as far as a national nationwide phenomenon, is really quite unlikely,"
Alan Greenspan, Federal reserve Chairman, 2003

"The idea that we're going to see a collapse in the housing market seems to me improbable"
John Snow Treasury secretary, 2005

"It's impossible for prices to go down this year"
Gary Watts, Orange County, Association of Realtors, 2006

"If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing."
Anthony Hseieh, CEO, Lending Tree, 2006

"At this juncture, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."
Ben bernanke, Federal Reserve Chairman,

"Housing activity will remain healthy for some time to come."
David Lereah, NAR's Chief Economist, 2005

"Housing is still the best investment, without question."
Stan Sieron, President, Illinois Assoc. of Realtors, 2006

"The national media is reporting a housing bubble. Don't believe it."
Dale Akins, Market Edge, 2006

"We got a big problem"
George W. Bush, 2008

Home Resales Jump 10.1%
Home resales leaped up 10.1% in October, rising far more than expected as a fat tax credit offset fears about joblessness. WSJ.



Setting a Realistic Price on Your Home

Remember prices may not always reflect reality. Consider the sales that are around you, what is selling = what the market is willing to bear. In the end, the value of a home is the price a buyer is willing to pay. It's chance, circumstance and psychology as much as location, square footage and design that ultimately determine the price someone will pay.



Are the Holidays a Good Time to List Your Home?

Well in my opinion it is if you are a serious, committed seller. The reverse of this is that buyers out in the marketplace during this time are usually very serious - why else would they drag their families out during this busy season to look at homes??? Consider this - the inventory is low, your home looks beautiful and inviting, and did I mention the tax incentive for both First time and Second homeowners!!! Something to think about before you opt out of putting the for sale sign up!

So you think the market is stabilizing? Foreclosure and Distressed Properties are done? Stay tune for my posts and market analysis!! If you were thinking of waiting till the spring to list your home .....you may be in for a surprise......that we'll still see a whole lot more of distressed properties keeping prices flat to down......not up. In the meantime here is a new Bank Owned Property in The Point - new construction 2007, Golf Course  - $825,000 approx 4,300 sq. ft.

Should you Rent or Buy????

Rates are great; Home prices are down, and there's an $8,000 tax credit for 1st time Homebuyers !!!!! What should you do - granted there are other things to consider but here's a little formula for you - What's the Price-to-Rent Ratio?? Determine wheather it makes financial sense to buy or rent in your area, compare home sales prices with the cost of renting a similar place. "Divide the price of the home by the total cost of rent for one year. If the result is more than 20, "I'd be very concerned that the price [of the home] might fall more," says Mr. Baker, and you should consider waiting to buy. If it's 15 or below, he says, "you're probably reasonably safe" with prices holding steady or growing".
information provided by: Dean Baker, co-director at the Center for Economic and Policy Research as reported in WSJ.

Home Sales Rise!

What’s News —
Business & FinanceExisting-
Home Sales Rise a Surprising 7.2%
Sales of U.S. existing homes rose to their highest level in nearly two years as cheaper prices and the availability of tax credits continued to entice buyers.
...as reported in today's WSJ

Where might housing prices be headed.

Interesting article about todays real estate market in the Wall Street Journal. Click on the link to read.