Charlotte Between the Lines || The Truth About Charlotte's New Home Market

Welcome to CharlotteBetweenTheLines.com, your source for the latest expert analysis of the Charlotte new home market. Here you’ll find a credible blend of data and knowledgeable perspective from respected economic and real estate experts.

• Chuck Graham's Latest Article - The
   Charlotte Housing Market

• Emma Littlejohn's latest article encourages
   home buyers to get off the fence

• "Despite Challenges, Charlotte Finds a Way
    to Grow" by Mark Vitner, Senior
    Economist, Wachovia

• Pat Riley says "Don't Call it a Housing
   Slump" and he explains why in his newest
   article in "Why Buy Now"

Listen to our experts discuss the local housing market on “Charlotte Talks” on WFAE.

What To Expect in 2009 for Residential Real Estate
Mark Vitner
Senior Economist, Wachovia

The Truth About Charlotte's New Home Market
Brian Pace
President, HBAC/Pace Development

Silent Success for Charlotte Builders
Mark Baldwin
Executive, VP, HBAC

Charlotte Housing Market Bottoming Out
Chuck Graham
Newton Graham Consultants

Encouraging Home Buyers to Get Off the Fence
Emma Littlejohn
The Littlejohn Group

The Silver Lining of the Mortgage Meltdown
Charles Myers
President, Myers Park Mortgage

Five Financing Questions with a Charlotte Mortgage Expert
Alma Jacobs
Suntrust Mortgage

Opportunity Knocks! What Are You Waiting For?
By Karla Hammer Knotts, MIRM, Owner, Land Matters

If you’re waiting for home prices in Charlotte to fall significantly before purchasing a home, be careful—you may have been misled or “Case Shillered” by a notoriously negative barometer of the national housing market.

Released at the end of each month, the Case-Shiller Index measures home prices in 20 U.S. cities and is the media’s report of choice on the housing market. Compared to other indexes, Case-Shiller trends infamously negative, painting a grim picture colored by free-falling housing prices. Robert Shiller, creator of the index, claims home prices “will fall further than the 30 percent drop in the historic depression of 1930’s.”

Why such alarming predictions? The Case-Shiller Index measures 20 housing markets, weights the information based on internal guidelines then uses that information to forecast what they think will happen in a market. Seven of the 20 markets analyzed in Case-Shiller are from hard hit areas in the western U.S. and in Florida, places like Las Vegas (prices down 25.9 percent), Miami (down 24.6 percent), Phoenix (down 23 percent), and Los Angeles (down 21.7 percent). This skews the index and leads to headline-grabbing proclamations and a false fear among some homeowners and homebuyers that prices in Charlotte have long to fall before bottoming out.

For an example of a disconnect between this index and our reality in Charlotte look at May’s Case-Shiller report and subsequent media coverage which concluded ‘home prices fall 14.1 percent.’ At the same time, home prices in Charlotte, the only North Carolina city measured by the index, actually rose!

Signs of recovery

So what’s really happening in Charlotte? On Friday, June 18, the Charlotte Observer declared “Housing slump slams Mecklenburg builders.” Building permits are down to lows not seen in years the article tells us and this is true. While some view these numbers as further proof of impending doom, savvy observers understand these are signs of recovery and opportunity.

Charlotte is in the middle of a normal real estate cycle. We hit our peak at the end of 2006 and will quickly reach a bottom. Why? Charlotte’s strong fundamentals—a steady rise in home prices (aka. no bubble), high employment and strong population growth—delayed the slowdown, allowing builders to anticipate the downturn and cut new starts and inventory quickly. Evidence of this foresight is clear in the latest building permit data, which shows a sharp, but expected decline.

Our market had excess permits in 2006 and 2007 and those houses have now sold and permits are balancing with demand. This is good news for homeowners because in order for prices to stabilize and rebound, builders must eliminate inventory of finished homes.

Opportunistic homebuyers should heed this as a signal that now is the time to buy.

About the author

Karla Hammer Knotts is the owner of Land Matters, a real estate consulting services including market research, market analysis and feasibility studies for builders and developers seeking to document the demand for single-family communities and homes.

Emma Littlejohn

Why It's a great time to buy

The Quality of Life In Charlotte
Rita Donovan
New Charlotte Homeowner

Landmark Housing Bill Helps Homebuyers

H.R. 3221, the Housing and Economic Recovery Act of 2008, includes several provisions aimed at ending the current cyclical downturn in the housing industry and strengthening the housing finance system so that it will provide critical support as the marketplace gains strength.

The centerpiece of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for a home sale closing on or after April 9, 2008 and before July 1, 2009. It is expected to provide a significant financial incentive for home buyers.

In addition to providing a $7,500 tax credit for qualified first-time home buyers, the Housing and Economic Recovery Act of 2008 includes a number of other provisions that will help prevent foreclosures, reinvigorate the housing market and strengthen the nation’s economy.

Federal Housing Administration Modernization

The maximum FHA-insured loan will be increased to 115 percent of an area’s median home price, up to a maximum of $625,500, with a minimum downpayment of 3.5 percent, up from 3.0 percent currently. The legislation will give the agency greater flexibility to respond to the needs of borrowers, enable more working families to become home owners, provide a viable alternative to the volatile subprime market and allow the FHA to play an important role in stabilizing the mortgage markets.

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Established in 1945, the Home Builders Association of Charlotte is a positive presence and resource in the community continuing to protect and promote the American dream of home ownership for all people.