North Carolina Living: Slumping housing market hits Charlotte area

Slumping housing market hits Charlotte SC area
Region sees 13% drop in sales, but average price is up 4%

Charlotte-area home sales fell by double digits in June, the largest dip of 2007.

The local housing market has been up and down by single-digit percentages since last September, which saw the first drop in sales in more than three years. Real estate agents say Charlotte is feeling the impact of slowing sales in other cities, magnified by rising interest rates.

Sales in the $300,000 to $750,000 price range are especially slow, agents say, while sales of $1 million-plus homes remain surprisingly healthy.

The good news is that prices are rising slightly, unlike those in many U.S. markets where they're falling.

Carolina Multiple Listing Services released its June sales figures for the region Tuesday. There are two ways to view the latest numbers, and both point to a slowdown.

• In June, closings on homes, condos and townhouses fell 13 percent from the same month last year. Because sales are seasonal, the best measure of monthly numbers is to compare them with the same month of the previous year.

• For the first six months of 2007, total sales through the MLS dipped 4 percent from the same period the year before. Experts say a larger sample paints a more accurate picture of the market.

Real estate pros say Charlotte has escaped the market meltdowns that have hit other cities. "Things definitely have slowed, but we still have an incredible market," said Dan Cottingham of real estate company Cottingham-Chalk. "Charlotte is definitely bucking the national trend."

That national trend, though, is being felt here.

Realtors compare slow housing markets in other cities to bad weather at distant airports. If it snows in Chicago, planes are grounded in Charlotte. If newcomers can't sell their homes back in the Midwest, they can't buy here.

That's not a new issue, but one that has more impact here as news gets worse across the country.

The National Association of Realtors won't report June home sales until later this month, but national existing-home sales in May were down more than 10 percent from the same month last year. It was double that in some cities.

In the Charlotte area, sales dipped only 5 percent in May.

"Our market has been more affected by people coming from elsewhere who can't sell the house where they're coming from than from things in our market," said Dot Munson, president of the Charlotte Regional Realtor Association. "That's been building for a while."

Cottingham agreed, and said rising interest rates also have eroded sales. While rates are still relatively low, at about 6.4 percent for a 30-year mortgage, they've inched up about three-quarters of a point in the past 90 days.

In fact, Cottingham said, he's surprised sales haven't slowed more, considering the national slump and rising rates. "It's like two perfect storms," he said.

Other measures of the Charlotte market remain healthy.

The average price of a home sold through the MLS in June was $248,048. That's up 4 percent from the same month last year.

It would take about seven months to sell all the houses, condos and townhouses currently on the market in the Charlotte region at the present rate. That hasn't changed much since March and actually has improved in June.

Cottingham said some parts of Florida have more than a year's supply.

The news is even better in Mecklenburg County. David Barnhardt of First Charlotte Properties says Mecklenburg, which traditionally accounts for about half of the area's listings, has a five-month supply.

Walter Molony of the National Association of Realtors says a six-month supply is considered balanced between sellers and buyers. More than a six-month supply becomes a buyer's market. Less than six months becomes good news for sellers.

The supply is creeping up across the country. Molony said the national average is eight to nine months.

It's taking a bit longer to sell a home here than it did a year ago, Realtors say.

Munson, who is with Re/Max Executive Realty, said an average of 90 to 120 days would reflect a balanced market. "When it gets beyond that, something is not right," she said.

In June, the average time on the market was 115 days, at the upper end of the range.

Munson, Cottingham and others say the slowest-moving homes in Charlotte now are in the $300,000 to $750,000 price range. Buyers of more expensive homes don't depend as heavily on selling their current homes to buy their next homes.

Especially hard hit are owners trying to sell relatively new homes in areas where builders are still active. Builders always tend to set prices in neighborhoods where they're building. The slowing market elsewhere has only increased pressure on them to sell in Charlotte.