Myers Park 2010 Real Estate Year in Review
Friends,
T'was another bumpy ride this year, was it not? But where would you rather be? California? No way. Vegas? Phoenix? Heck, no. Florida? I don't think so. As challenging as the Charlotte real estate market has been, there is no city or town in the U.S. where I would rather be plying my trade.
My trade: this will be my 26th year counseling folks in making sound financial and quality of life decisions around real estate. Why Charlotte? Because we will be back - mark my word! It's coming slow, for sure, but it is coming inevitably and inexorably.
The history of home and condo/townhome unit sales for the past 8 years follows...
The average closed price was down slightly in Myers Park in 2010 - about 4%, reflecting not only depressed prices but also the fact that Buyers are less interested in big square footage and more interested in well-utilized square footage. The average closed price for condos/townhomes was up 27%, skewed by 5 big sales in Simonini's Stephens Square. Without those 5 sales the average closed price would have been down 8%.
The average size of homes closed in Myers Park continued to climb. I predict this number will start trending down next year as more and more people move away from the mega-mansion and towards homes that are more skillfully and artfully designed, including homes with flex spaces which can double as living and work spaces.
Here is the number everybody wants to know: Dollar-per-square foot. This number was $223, down a not-too-bad 5% compared to 2009 ($234), and down almost 23% from the apex of value in Myers Park in 2007 of $288.
The average dollar-per-square-foot of the 42 condos ($253) was, again, skewed by the 5 sales in Stephens Square. When you take those 5 sales out the average of the remaining 37 was $219.
The next number, the ratio of SOLD/closed price to (final published) asking price, was a bright spot. Sellers fetched 92% of their asking price, compared with 90% a year ago. I believe this reflects the fact that asking prices were more realistic in 2010, and so there was less of a difference between asking price and SOLD price.
The number for condos/townhomes trended slightly downward.
It took longer to sell a home, condo, or townhome in Myers Park in 2010, as it did everywhere. Homes took, on average, 5 months to sell, and condos/townhomes took 4 months. The average for all homes, condos and townhomes in the Carolina MLS was 123 days.
A
Distressed Properties: 20 of the 155 home sales, or 13%, were distressed sales, slightly higher than 2009's 11%. 2 of the 42 condo/townhome sales were distressed sales.
New Construction: 13 of the 155 home sales were new construction. 3615 Selwyn and 3812 Selwyn were short sales. 18 of the 42 condo/townhomes sales were new construction - 5 from Stephens Square and 13 in Tranquil Court.
Interest rates: Interest rates have been rising the past several months, from all time lows (below 4%) to about 4.75% at press time.
A few more observations:
In the first two years of our real estate downturn, Myers Park lagged behind the market at large as Sellers grappled with the reality of falling values after homes appreciated in Myers Park 25% between 2004 and 2007. It took some Sellers in Myers Park the full two years to "get real" about the value of their homes. And Buyers waited, with no feeling of urgency, until they did so. After multiple price reductions, list prices began to look appealing to some Buyers, who stepped up and made offers (low offers, of course). Other Sellers waited longer still, until there was little equity left in their home and were forced to sell short (meaning they got the bank to take less for the house than what was owed to the bank).
Without quesytion, the most important factor in our Charlotte and Myers Park markets is the effect of distressed sales on values. Here is the most startling thing I have seen as regards our local market:
There were 10,339 sales of homes, condos, and townhomes in Mecklenburg County in 2010.
In the same period there were 12,176 foreclosures (and only 2,806 of them SOLD/closed).
That's right - there more foreclosures in Mecklenburg County in 2010 than there were single family home, condo, and townhome sales. The same was true in 2009. 51% of the home, condo, and townhome sales in Mecklenburg County in 2010 were distressed sales - short sales, foreclosures, HUD, and bank owned sales. The scary thing is only a fraction of the homes that have been foreclosed upon have been put on the market and sold (as REO's or Real Estate Owned properties). The banks are squeezing out these foreclosed homes onto the market a few at a time so as not to "tank" or sink the market. That means there are more foreclosures piling up and they can't get them sold fast enough. And each home foreclosed upon tugs values downward just a little bit more, and we all lose.
How long will it take to process all these foreclosures? Your guess is as good as mine. I think we will see the high-water mark of foreclosures in our market this year. Nonetheless, it will take years to work through them all and we will not find ourselves in any kind of "normal" (stable) market until we have done so. Meanwhile, only motivated Sellers will be successful in this market. Only Sellers who win both contests - the beauty contest AND the price contest - will be successful. If you win the beauty contest (your home is in tip-top shape and staged to be appealing) but not the price contest, potential Buyers will drive on. If you win the price contest but your home looks tired, worn, and forlorn, potential Buyers will drive on. Why? Because there are plenty of homes to choose from, including homes that are being fire-saled by desperate Sellers or by banks.
Depressed yet? Don't be. There is good news here:
The U.S. economy ended last year on an encouraging note, with all parts of the country showing improvements. Factories produced more, shoppers spent more and companies hired more - pointing to a stronger economy in 2011. (The Charlotte Observer)
and
Existing-home sales rose sharply in December in the U.S., when sales increased for the fifth time in the past six months, according to the National Association of REALTORS®.
The best news of all is that more than twice as many homes SOLD/closed in Myers Park in 2010 than in 2009. 155 homes SOLD/closed compared to 74 in 2009 (number adjusted from 79 after publication last year). That is a 109% - a dramatic increase. So, after lagging behind the Carolina MLS at large for two years, Myers Park far outpaced the Carolina MLS in 2010 in unit sales. (Unit sales in the Carolina MLS were down less than 1% in 2010 over 2009). Condo/townhome sales were down 2% compared with 2009.
The number of homes For Sale in Myers Park is down dramatically, with 98 homes For Sale at press time (January, 2011), including 25 priced at $1 million or more (compared with upwards of 200 For Sale, including as many as 88 homes priced at $1 million or more 3+ years ago). That is excellent news for Sellers this spring. The bigger picture: there are 474 homes on the market in the Charlotte M.S.A. for $1 million or more, compared with more than 1,000 3+ years ago. This is GREAT news!
There were 69 condos/townhomes on the market at press time.
Forecast: Buyers will continue to be in the "cat bird's seat", as my Granny would say. With no end in sight of distressed sales as the dominating dynamic in the market at large, values will continue to languish in 2011. I believe unit sales and values (dollar-per-square-foot) in 2011 will equal or slightly exceed 2010. But we will see no real appreciation until the mountain of foreclosures is processed, which will take years.
Having said that, you CAN be successful if you are motivated to do what it takes to be successful. That means being realistic about your price and that means putting your home in top condition, including staging it to be appealing (painting, de-cluttering, cleaning, etc., etc.).
I have helped a number of Sellers in Myers Park to be successful the past several years, even in this lousy market. I would be happy to do the same for you.
Have a happy, healthy, and prosperous 2011!
Robert
Robert Dulin
704-661-3173
Keller Williams Realty