Look at trends over time to best gauge recovery
Navigating through a complex and fast-moving marketplace is tough work. Our association of Realtors® is being called upon to provide fact-based guidance in a timely fashion — and rightly so. Consumers should be aware that multiple listing (MLS) data is detailed, timely and accurate. Realtors® are constantly asked which indicators show the market is turning and why that particular indicator is important. However, there is no one specific indicator that will magically reveal what’s happening in a given market.
“All indicators must be weighed together, and indicators tell the best story when viewed over a period of time,” said Jennifer Frontera, 2012 Charlotte Regional Realtor® Association/Carolina Multiple Listing Services, Inc. (CMLS) president. “But consumers need to remember that though we’re seeing positive indicators now, 2012 is a rebuilding year, and these positives are the pieces needed for a healthy, stable housing market.”
Positive indicators abound
First-quarter 2012 and its absence of winter, or perhaps unusually early spring, brought new life to the area’s housing market. New listings in the Charlotte region totaled 12,572, which is down 6.5 percent compared to the same period last year (13,433). Demand was strong in first quarter with pending contracts (6,114) — usually a good gauge of future sales — up 17.6 percent compared to first-quarter 2011 (5,199). Similarly, closed sales (5,253) were up 13.3 percent over first quarter last year.
Homes are selling a tad faster than last year; they spent about three days less time on-market at 152 days list-to-close in first quarter. List-to-close, or the number of days a property was listed until it closed, totaled 155 days in first quarter 2011.
March inventory down, sales prices up
CMLS inventory was down in March with more than 18,700 homes for sale representing a 9.4 months’ supply of homes left on the market.
“Realtors® are reporting increased foot-traffic. This is hard to measure, but taken with the indicators we’ve seen this quarter, these are promising signs that suggest we’re moving in the right direction with a market that is continuing to improve and stabilize,” said Frontera.
February and March of first-quarter 2012 signaled increases in both the median and average sales prices. First quarter’s average sales price was $190,224, representing a slight increase of 0.7 percent over first-quarter 2011, and the median sales price ($149,500), the best measure of prices over time, was up 3.1 percent as well. The percent of original list price received measure in first quarter was 90.8 percent, an increase of 3.1 percent over the same period last year.
Foreclosures and short sales have continued to decrease, with foreclosures flat for much of first quarter and short sales trending down over the period. The share of all closings that were in financial distress was 15.8 percent in March 2012, down from 33.4 percent last March. New listings that were distressed came down from 20.6 percent in March 2011 to 12.4 percent. These are all good signs for now; however, in light of the recent AG settlement between the state attorney general and the five leading bank mortgage servicers, it’s hard to predict the overall impact to the local distressed market.
So what are the key takeaways? With the overall inventory down, this is a good time for listing agents to check curb appeal and maybe try a bit of staging. Share statistical information with your clients; maybe they’ll finally get off the fence about listing their homes. On the buyers’ side, the Charlotte market continues to experience high affordability, less supply and increased demand. Tell prospective buyers that now’s the time to buy.
Still, housing is closely tied to the broader economy, and though first quarter 2012 U.S. economic data has been reassuring, one quarter of positive indicators does not equate to full recovery.
“Charlotte’s housing market is off to a strong start this year. But again, this is a year of rebuilding,” said Frontera. “We need to look at this recovery one quarter at a time.”