I was unable to publish the statistics for April, but they were calculated and are contained in the spreadsheet linked at the end of this article.  In a nutshell, the local submarkets showed generally increasing unit sales but flat or decreasing average prices in April, still way down from twelve months earlier.

For May, 2009, Charlotte/Mecklenburg County and the larger submarkets increased units following the typical seasonal curve, but continued to be 30% to 40% below 2008 numbers.  For Mecklenburg County as a whole, including Charlotte and all other towns in the county, the number of homes sold through the MLS increased from 597 in April to 639 single-family homes, and 146 to 168 condos and town homes.  Average selling price was 20% below twelve months ago for single-family, and 11% down for condos and town homes, based on averaged data.  Inventory of both single-family and condo/town homes decreased slightly from March/April, to 14 months and 22 months respectively.  A normal, healthy market is considered to be 5 to 7 months of inventory, but a decrease is better than a further increase.

I have spent a lot of time trying to understand the few buyers in the market, both for the benefit of my sellers and for my own efforts to find more buyer clients.  There are very few buyers in the market compared to almost any time in the past.  Most of those buyers, whether first-timers motivated by the tax credit or move-ups realizing that this is a golden opportunity if they have good credit and the necessary down payment, are heavily concentrated in the $100K to $250K price range.  There are very few buyers in the medium and high price ranges; inventory of homes over $1M is still four plus years.  With virtually no exceptions, these buyers are all looking for the deal of the century, and sellers who must sell have to understand that.

Sellers must position their property as the best value within their competition.  Value is a combination of price (low), features and condition, with a small influence from incentives.  The formula for selling quickly is to price at the low range of the competition and be the best house from a feature and condition standpoint.  Even with that positioning, sellers have to understand that they will have a hard negotiation, will probably have to discount 5% or more from list price, and will have to fix whatever the buyer’s inspections find in order to close the sale.

For buyers - I have said it before but it is still very true - there has never been a better time to buy if you have the credit standing and downpayment money available.  FHA loans only require 3.5% up front, and first-time buyers (who have not owned a principal residence in three years) have an especially good opportunity with the 2009 Federal tax credit (10% of purchase price up to $8K).

Click here to download an updated Excel spreadsheet containing all the monthly statistics for these submarkets back to May of 2006.

The last two months have been very busy for me, trying to make some deals come together at last.  As most of you are aware, real estate is very slow in many parts of this country, and understandably so given the economic issues and uncertainty that most of us are living with.  My revenue dropped more than 50% in 2008, and I have had only one transaction close so far in 2009 until this past week.  Fortunately, I have been very successful lately in advising sellers on how to position their homes to sell in a seriously down market, so we have closed a couple of transactions this month, and have another under contract to close next month.

If you have ever run a small business, you probably know that a right of passage for every entrepreneur is having to cut expenses to the bone, negotiate constantly with creditors, and spend every available minute trying to find business when a serious downturn occurs.  I can now say that I have experienced the best years in the history of my industry, and am probably experiencing the worst right now.  One of my core beliefs is that everything that happens to you in life happens for a reason.  Sometime in the (probably distant) future, I will finally realize why I chose to start my own business when and how I did, and I am certain it will be an amazing moment of clarity.  Until then, I keep the faith and persevere.

Shortly, I will post the May statistics for Charlotte and the submarkets that I track.  I calculated April, but never found time to post them on the blog.  Since I just add each month to the same spreadsheet, both the April and May numbers will be in the May file, in case you are interested.

I am going to have to come up with a new schedule for blogging (obviously).  Not sure how I can work that out, but I am definitely going to try to be more active in the coming weeks.  If you read one of my articles, please leave a comment and let me know what you thought about it.  It will probably help me get back into this habit if I get more interaction with readers.

If you are a client, past or present, thanks so much for allowing me to serve you, and if you are a friend, please know that true friends are the most important people we can know.  If you are both, you are truly a blessing!

I have used Twitter recently to announce blog articles, and I will continue to do that.  Of course, I have been very lax about posting articles, so I need to get back to setting time aside for this blog.  I also will use Twitter for daily posting of “principles” that I have collected over the last few years.  These are short sayings that I feel are important about how we should do things.  Some of these are the sayings of others, and some are my own ideas.  Unfortunately, I haven’t been good at noting who said something that I considered profound, so I apologize in advance if I repeat someone else’s great quotation without crediting the original author.  I have two series that I will publish, Real Estate Principles and Life Principles.

Real Estate Principles will be important (I hope) to my real estate friends, but they will also give my clients a view of the principles by which I operate my consulting and brokerage business.  Life Principles are more spiritual; I do not believe they will offend anyone, but please accept my apologies if they do, and understand there was no intent.

These Tweets will have a prefix to identify the series and intent:

Blg: Blog article announcements
RE: Real Estate Principles
Life: Life Principles

A few of these will require multiple successive Tweets to transmit, so they will be suffixed by “(x to follow)”, with “x” being the number of Tweets to come in order to get the entire message.  The worst of these in my current list is four messages.  The vast majority of these Tweets will be single messages.

Please follow these for a few days, and then let me know if you find these worthwhile.  I am truly interested in all your feedback, and I also promise to start following more folks so that we can connect.

For March, 2009, the majority of submarkets increased units sold substantially from February results, following an increase in February which we judged might be due to the lack of contracts written during the holidays.  For Mecklenburg County as a whole, including Charlotte and all other towns in the county, the number of homes sold through the MLS increased from 454 in February to 564 single-family homes, and 115 to 133 condos and town homes.  Could this be a trend?  March unit sales were 31% lower for single-family and 47% lower for condos and town homes than the monthly unit sales for March of 2008, based on raw data.  Average selling price was 16% below twelve months ago for single-family, and 8.5% down for condos and town homes, based on averaged data.  Inventory of both single-family and condo/town homes decreased from Frebruary to March, to 13 months and 21 months respectively.  A normal, healthy market is considered to be 5 to 7 months of inventory.

These numbers would seem to indicate that more buyers are coming into the market, and recent activity at our real estate agency seems to support that.  However, it is normal for buying to increase in early spring, as most people make residence moves in summer between schools.  The unit sales are still 30% or more below this time last year, so we cannot call this a bottoming or a market turn until we see at least a couple more months of positive trends.  In any case, we still have a strong buyer’s market with pressure on prices.

My advice to sellers is to still price aggressively and make your home the best value in your local area and price range.  For buyers, there has never been a better time to buy if you have the credit standing and downpayment money available.  FHA loans only require 3.5% up front, and first-time buyers (who have not owned a principal residence in three years) have an especially good opportunity with the 2009 Federal tax credit just passed.

Click here to download an updated Excel spreadsheet containing all the monthly statistics for these submarkets back to March of 2006.

My advice for investors at this time is that there are many good investment deals available, depending on your confidence in the future and your ability to hold for a number of years.  While most of the press is devoted to residential properties such as short sales and foreclosures, and some of those could be good investments for the right buyer, we are also seeing potentially good properties available in commercial net lease and land.  We had a rash of medical offices listed for sale a few months ago by physicians who were having their commercial loan come due and could not get new financing due to the freeze in commercial lending.  Most of these were offering sale/lease-back deals with good cap rate.  We also have builders and land developers who are having to sell off the future phases of excellent communities because they cannot get financing for further development.  Land such as this is, of course, a long term hold under today’s economic and real estate market conditions, but prices are low, and a good location today will probably still be a good location when the market eventually does turn around, especially if it’s not too far from employment centers.  Investors with funds should be looking for the bargains to be had while the prices are low.

If you would like to discuss investment opportunities and the strategies and dangers of a particular investment property type, contact me directly by posting a comment, and I will get back to you as soon as possible.

For February, 2009, most submarkets increased units sold over January while continuing to show significant decreases in average selling price compared to twelve months earlier, with only a couple of exceptions.  For Mecklenburg County as a whole, including Charlotte and all other towns in the county, the number of homes sold through the MLS increased from 411 in January to 454 single-family homes, and 82 to 115 condos and town homes.  January numbers were down significantly from December, so we really did see the effect of the holiday season, and not a trend.  February unit sales were 36% lower for single-family and 49% lower for condos and town homes than the monthly unit sales for February of 2008, based on comparing six-month rolling averages to smooth the data.  Average selling price was 11.5% below twelve months ago for single-family, and 9% down for condos and town homes, again based on smoothed data.

The other submarkets included in the analysis are Ballantyne, Matthews, Mint Hill, Southwest Charlotte/Mecklenburg, Waxhaw, Weddington, Fort Mill, Rock Hill and Tega Cay.  These are each small markets normally, and with the current low level of sales across the entire area, statistics for these markets can be very misleading.  The smaller the market, the more variability there is in the data from month to month.  For February, all of these submarkets showed a continuing downward trend in units sold compared to February, 2008.

On average selling price, the advantge of 8% rise over twelve months that Matthews registered in January dropped to 2.5% in February, based again on six-month rolling averages.  Fort Mill showed a nearly 9% gain on selling price in February.  Both these markets are relatively small with only a small number of sales, and both markets having been moving to more expensive homes over the last few years, which may account for these positive bumps in the measurements.

Raw inventory of homes for sale increased in some submarkets and decreased in others in February, but averaged data showed that the trend is still increasing inventory in all submarkets.  In the entire Mecklenburg County area, inventory of single-family homes stands at 15 months, and condos and town homes at 23 (14 and 22 respectively with smoothed data).  A normal, healthy market is considered to be 5 to 7 months of inventory; our current numbers are still indicative of a severe buyers market, with only a very small portion of homes actually selling.

The advice to sellers is to still price aggressively and make your home the best value in your local area and price range.  For buyers, there has never been a better time to buy if you have the credit standing and downpayment money available.  FHA loans only require 3.5% up front, and first-time buyers (who have not owned a principal residence in three years) have an especially good opportunity with the 2009 Federal tax credit just passed.

Click here to download an updated Excel spreadsheet containing all the monthly statistics for these submarkets back to March of 2006.  We now have three years of data!

Here are the basic findings of the study as reported in the news item:

• 63% of sellers believe that their agent’s recommended price is too low.
• 45% of sellers think their price should be 20% to 30% higher.
• 14% of sellers think their price should be at least 30% higher.
• 21% of buyers think that the homes they are considering are overpriced by 6% to 10%.
• 32% of buyers think that homes are 10% to 20% too high.
• 6% of buyers think that homes are more than 20% too high.
• Only 18% of buyers think that homes are priced fairly.

Granted, this study has been done during arguably the worst recession in modern history, at a time when home prices nationally have fallen significantly after the highest price inflation ever, so these attitudes are somewhat understandable.

However, the results of the study are not surprising if you consider human nature.  Quality Service Certified found in their first few years of doing surveys of agent performance that the category of negotiation regularly turned up answers from clients that were not in sync with the answers to the other questions.  In essence, clients nearly always thought that they should have gotten more money (sellers) or should have paid less (buyers), and blamed the agent’s negotiating performance, even though they were extremely satisfied with all other aspects of the agent’s work.

The reality is that right now, everyone needs to get a grip, and in the long term, clients need to listen to the professionals they engage to help them sell or buy.  Good agents know their market, and are always honest with their clients.  When I recommend pricing to sellers, I show them all the applicable market data, do a rigerous comparative solds analysis, review comparable and competing listings that recently failed to sell, and compare the subject house to the active competition to recommend the best competitive positioning.  When I advise a buyer on a property they are interested in, I also do a rigerous comparative solds analysis to establish an estimated value range, review any factors that may work in their favor for negotiating purposes, and recommend an offering price which suits my client’s wishes as to how hard they want to negotiate.

One thing buyers needs to watch out for is the impact of a seriously low offer.  Everybody knows that people get emotional about buying and selling homes, especially the sellers.  To the vast majority of sellers, an obviously low offer is insulting.  Even if you ultimately arrive at a purchase deal through negotiation, the sellers will likely be less than accomodating on subsequent repair negotiations and cleaning up as they move out.

In the current economic condition, depending on the local market, sellers need to get real about values if they truly want to sell.  They need to understand that pricing too high simply causes you to sit on the market with virtually no showings and definitely no offers, other than perhaps those insulting lowball offers, and when you ultimately reduce the price to get right, you then open the door to hard negotiations.  When buyers and their agents see a history of price reductions, they sense the ability to get an even better deal because they believe that the seller is now motivated and really needs to sell.

Pricing is always the most sensitive issue for everybody in the transaction, for obvious reasons.  Whether you are buying or selling, always try to understand the position of the other party, and the agents, and just be as reasonable as possible.  If you can’t afford the market value, then don’t buy (or sell).

North Carolina gained the most new residents amongst the states, with 180 people moving in for every 100 moving out.  Michigan and Ohio lost the most residents.