Disclaimer: This blog covers the national housing market as a whole. Please check with a local real estate professional to discover how the following information will impact your region.
– The KCM Crew
Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:
- They don’t want to be inconvenienced during the holiday season.
- They believe that they will see more potential buyers and as a result will get a higher price.
- In the northern part of the country, they might not want people walking through the snow and then into their house.
- All of the above
In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.
In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.
The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.
Will This Actually Happen?
, in their latest foreclosure report, explained:
“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.
This will impact prices.
What Do Experts Believe the Impact Will Be?
Here are the pricing projections by several major entities:
- Zillow believes we will not see a bottom in prices until the first quarter of 2012.
- Standard & Poors thinks prices will drop %5 in the next few months.
- JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
- Barclays says prices will fall 7% by the end of the first quarter of 2012.
You may pay a hefty price for the convenience of not having your property on the market right now.
Source: KMC Blog
Is this a true rebound or are we experiencing a brief improvement? Given the significant increase in activity in the Charlotte and Lake Norman regions, this is the question on everyone’s minds. Here are the stats comparing 2009 and 2010 through the end of April:
Charlotte region closed sales as reported to the MLS are up 14.5%. Lake Norman region sales are up 32.4%. Certainly cause for celebration.
Remember – we are comparing against what we perceive to be the bottom of the market in early 2009 and prices have just begun to stabilize. Activity has returned to 2002 levels. Pricing, while very specific to the neighborhood and the product is likely to be in that 2002 vicinity as well.
So, can we sustain the increased activity? I believe we can. Subject to consumer confidence, job creation and stabilizing prices, I believe we will see continued improvements. One interesting factor to consider – the inventory levels have not increased dramatically – thankfully so. Many homeowners find themselves with diminished equity due to the price declines of the recent past. With inadequate equity to move up, many are choosing to stay put. This helps to balance the market.
One last comment on foreclosures, short sales and their impact on the market. 70% of foreclosures nationally are within 5 states. Fortunately, North Carolina is not one of those states. Foreclosures can certainly impact any micro market; they are not having an adverse impact on the overall market at Lake Norman or in the Charlotte region. Certain neighborhoods might be suffering but the overall market remains stable.
As always, we welcome the chance to discuss your home and your neighborhood. Please call us or feel free to visit my website at www.LeeAnnMiller.com
where you can search for recent sales in your neighborhood by using our map search.
Forbes.com recently posted the top five cities where home prices will likely rise and Charlotte was one of them. This is good news but don’t expect it to happen overnight. They will likely inch, rather than fly, and not all areas will be the same. Charlotte, NC is one of the areas where economist believe is showing an early sign of strengthening and the home prices are predicted to rise. Moody’s Economy.com provided Forbes with their housing price forecast for the country’s 40 largest metropolitan statistical areas. These are the top five (1) Atlanta, GA (2) Austin, TX (3) Baltimore, MD (4) Boston, MA & (5) Charlotte, NC. Charlotte’s percentage change over the next five years is predicted to look like this 1 year, 2009: -8.15%, 3 year, 2009-2012: 3.54% and 5 year, 2009-2014: 12.20%. Let’s hope they are close. That’s great news for all of us.
Forbes.com (September 18th 2009)