May 26, 2008Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC
As promised here is a report from Chuck Graham on the Charlotte Residential For-Sale Market.
First, about Chuck:
Chuck Graham
Charlotte Real Estate Consultant
Chuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard UniversityChuck GrahamCharlotte Real Estate ConsultantChuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard University
Charlotte’s Residential For-Sale
Market
Charlotte RegionalRealtor Association
Marriott Executive Park
May 19,2008
Charlotte’s Residential For-Sale
Market
National economic news is only getting worse. The credit, currency
and oil markets are in great disarray.
The credit markets, and Charlotte’s exposure to them, are of
particular concern.
All of your previous customers would appreciate an informed review
of the current residential for-sale market, both nationally and
locally, as would your current customers.
As a consequence, I wanted to use this morning to outline the key
points which should be part of your presentation to each of these
groups with the hope of creating a larger market as well as
increasing your closing ratios on those still in the market.
The Existing National Market
Existing home sales turned down in 2006
by 8% versus their 2005 peak of
6,800,000 transactions. The median
price remained constant at $221,600.
2007saw a further 21% downturn to
4,900,000 and a 7% decrease in the
median price to $207,000.
The New National Market
New home sales also turned down in 2006
by 14% versus the 2005 peak of
1,250,000. The median price was down
2% to $237,700.
2007 say a further downturn of 30% to
750,000. The median price was down
an additional 4% to $232,500.
The Existing Charlotte Market
Charlotte saw growth 2006 over 2005 of
21% to 37,155 sales. Median pricing
was down 1% to $160,000
Charlotte did see a contraction 2007
versus 2006 of 4% to 35,560 sales.
Median pricing was flat at $160,000.
The New Charlotte Market
Charlotte saw growth here too 2006 over
2005 with sales up 15% to 24,801 and
median pricing up 13% to $201,950.
Charlotte’s new home market did fall 12%
in 2007 to 21,704 closings. Pricing
however was up another 11% to
$225,000.
National/Charlotte Comparisons
Where as the national existing home
market is off 29% from 2005, Charlotte
is up 16%. National median pricing is
down 7% versus stable locally!
The national new home market is off 44%
versus stable in Charlotte. National
median pricing is down 6% versus up
26% in Charlotte!
The Charlotte Market 1Q08
Existing home closings were down an additional
8% to 32,603 for the twelve months ending
1Q08 versus 2007. Median pricing was up 1%
to $162,000. There are more than 13 months
of listings based on March closings.
New home closings were also off 8% as well to
19,871 versus 2007. Median pricing was up
1% to $225,000. There are 2.5 months of
completed new homes in inventory.
Analysis 1Q08
Although the Charlotte market remained
conservatively sound vis-à-vis sub-prime, AltA,
and investor participation, it is less able to
resist the challenges relating to mortgage
market pull backs.
Builders have pulled back quickly in that lot
closings, permits and house closings were off
50%, 45% and 36% versus 1Q07.
Price Sensitivity 1Q08
Total closings new and existing can be
divided into Quintiles at $130,000,
$170,000, $230,000 and $400,000.
Quintile I is currently operating 18% better
than the market, Quintile II at the
market, Quintile III 6% below the market
and Quintiles IV and V 12% below the
market.
Price Sensitivity > $400,000
Quintile V can be divided into five equal parts at
$425,000, $475,000, $550,000, and
$675,000.
Quintile Va is at market, Quintile Vb is 9% worse
than market, Quintile Vcis 18% worse than
market, Quintile Vdis 9% worse than market
and Quintile Veis 23% better than market and
the strongest portion of the entire market!
Leading New Home Builders
Condminiums
Novare’sAvenue led the market with a
19% share at an average price of
$307,000. Trademark Partners
Trademark ranked second with a 10%
share. No one else captured more than
5% of the market.
Leading New Home Builders
Townhomes
Portrait barely lost its leading position
to Ryan’s 20% share! Portrait held 18%.
Horton, Standard Pacific and Pulte
completed the top five with 5, 4 and 3%
shares.
Leading New Home Builders
Single Family
Morgan held its lead position with an 8%
share. Ryan held its second position
with a 6% share. Pulte and KB both
increased their positions one place
taking third and fourth. Centex dropped
from third to fifth.
Leading New Home Builders
Single Family by Price
Quintile I: < $165,000 Morgan, Liberty, Regent, Atreus, Habitat Quintile II: $165,000 –209,000 Morgan, Eastwood, KB, Horton, Atreus Quintile III: $209,000 –268,000 KB, Pulte, NVR, Centex, Morgan Quintile IV: $268,000 -$375,000 NVR, Pulte, M/I, Centex, Shea Quintile V: > $375,000
NVR, Shea, Orleans, Pulte, Centex
Leading Communities
Attached For Sale By Price
Quintile I: < $139,000 Bent Creek, Hanover Crossing, Cascades, Hamilton Bay, Caldwell Creek Quintile II: $139,000 -$180,000 Alexander Chase, Hanover Crossing, Caldwell Station, Curry Place. Regent Park Quintile III: $180,000 -$224,000 Cypress Landing, Avenue, Blakeney Preserve, Stone Creek Ranch, Regent Park Quintile IV: $3224,000 -$289,500 Avenue, Lake Shore, Stone Creek Ranch, Trademark, Elizabeth Quintile V: > $289,500
Avenue, Trademark, Lakeshore, Springfield, Rosewood
Leading Communities
Single Family By Price
Quintile I: < $164,500 Meadow Hill, Reid Meadows, Citiside, Brandon Ridge, Hunter Park Quintile II: $164,500 -$209,000 Carolina Lakes, Hamilton Lakes, Kingstree, Legacy Park, Cedar Mill Quintile III: $209,000 -$268,000 Carolina Lakes, Berewick, Belair, Moss Creek, Regent Park Quintile IV: $268,000 -$375,000 Carolina Lakes, Stone Creek Ranch, Berewick, Cureton, Skybrook Quintile V: > $375,000
Carolina Lakes, Stone Creek Ranch, Baxter, Brookhaven, Lawso
Changing Geography
Attached For Sale
Mecklenburg County continues to hold its
lead with 70% of the new attached market.
York County ranks second with 15%. The next
strongest captures less than 5%.
The North Growth corridor’s share was up 36%
to 15%. The South Growth corridor was down
30% to 17%. The Southwest Growth corridor
was up 17% to 20%, leading all corridors.
Changing Geography
Single Family
Mecklenburg County maintained its leading
share at 40%. Union, York and Cabarrus
maintained their second, third and fourth
positions. Lancaster County moved to the
fifth position with a 50% share increase to 8%.
The South Growth Corridor regained its lead
position on an 18% share increase to 19%.
The Northeast Growth Corridor dropped to
third on a 12% share loss to 16%.
Forecasts
The Charlotte market will probably see
additional velocity shrinkage 2Q08 and slight
shrinkage in the median price for the first
time.
By 3Q08 we expect velocity shrinkage to
mitigate and continue until equilibrium
returns 2Q09 with some further modest price
depreciation.
Growth thereafter will appear in absorption and
pricing but at very modest levels through
2011.
Action Plan
All of your past and current customers should be
interested in these observations. Taylor them
for individual presentations to each as a
means to address their fears going forward.
Knowledge is always a key input to decision
making. The Charlotte market is stressed but
it is the best residential market in the U.S
today! Ask Case-Shiller.
Here is the link to download the .pdf file of the presentation:
Chuck Graham Charlotte's Residential For-Sale Market
Many thanks to Chuck for his always insightful presentations.
Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC
Charlotte Real Estate Consultant
Chuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard UniversityChuck GrahamCharlotte Real Estate ConsultantChuck is a veteran of the Charlotte real estate market and principal of Newton Graham Consultants, where he directs all feasibility and marketing assignments as well as general management consulting in the areas of strategic development, organizational structuring, control systems and financial management. He holds a bachelor's in architecture, magna cum laude, from The University of Notre Dame and a master's in business administration from Harvard University
Charlotte’s Residential For-Sale
Market
Charlotte RegionalRealtor Association
Marriott Executive Park
May 19,2008
Charlotte’s Residential For-Sale
Market
National economic news is only getting worse. The credit, currency
and oil markets are in great disarray.
The credit markets, and Charlotte’s exposure to them, are of
particular concern.
All of your previous customers would appreciate an informed review
of the current residential for-sale market, both nationally and
locally, as would your current customers.
As a consequence, I wanted to use this morning to outline the key
points which should be part of your presentation to each of these
groups with the hope of creating a larger market as well as
increasing your closing ratios on those still in the market.
The Existing National Market
Existing home sales turned down in 2006
by 8% versus their 2005 peak of
6,800,000 transactions. The median
price remained constant at $221,600.
2007saw a further 21% downturn to
4,900,000 and a 7% decrease in the
median price to $207,000.
The New National Market
New home sales also turned down in 2006
by 14% versus the 2005 peak of
1,250,000. The median price was down
2% to $237,700.
2007 say a further downturn of 30% to
750,000. The median price was down
an additional 4% to $232,500.
The Existing Charlotte Market
Charlotte saw growth 2006 over 2005 of
21% to 37,155 sales. Median pricing
was down 1% to $160,000
Charlotte did see a contraction 2007
versus 2006 of 4% to 35,560 sales.
Median pricing was flat at $160,000.
The New Charlotte Market
Charlotte saw growth here too 2006 over
2005 with sales up 15% to 24,801 and
median pricing up 13% to $201,950.
Charlotte’s new home market did fall 12%
in 2007 to 21,704 closings. Pricing
however was up another 11% to
$225,000.
National/Charlotte Comparisons
Where as the national existing home
market is off 29% from 2005, Charlotte
is up 16%. National median pricing is
down 7% versus stable locally!
The national new home market is off 44%
versus stable in Charlotte. National
median pricing is down 6% versus up
26% in Charlotte!
The Charlotte Market 1Q08
Existing home closings were down an additional
8% to 32,603 for the twelve months ending
1Q08 versus 2007. Median pricing was up 1%
to $162,000. There are more than 13 months
of listings based on March closings.
New home closings were also off 8% as well to
19,871 versus 2007. Median pricing was up
1% to $225,000. There are 2.5 months of
completed new homes in inventory.
Analysis 1Q08
Although the Charlotte market remained
conservatively sound vis-à-vis sub-prime, AltA,
and investor participation, it is less able to
resist the challenges relating to mortgage
market pull backs.
Builders have pulled back quickly in that lot
closings, permits and house closings were off
50%, 45% and 36% versus 1Q07.
Price Sensitivity 1Q08
Total closings new and existing can be
divided into Quintiles at $130,000,
$170,000, $230,000 and $400,000.
Quintile I is currently operating 18% better
than the market, Quintile II at the
market, Quintile III 6% below the market
and Quintiles IV and V 12% below the
market.
Price Sensitivity > $400,000
Quintile V can be divided into five equal parts at
$425,000, $475,000, $550,000, and
$675,000.
Quintile Va is at market, Quintile Vb is 9% worse
than market, Quintile Vcis 18% worse than
market, Quintile Vdis 9% worse than market
and Quintile Veis 23% better than market and
the strongest portion of the entire market!
Leading New Home Builders
Condminiums
Novare’sAvenue led the market with a
19% share at an average price of
$307,000. Trademark Partners
Trademark ranked second with a 10%
share. No one else captured more than
5% of the market.
Leading New Home Builders
Townhomes
Portrait barely lost its leading position
to Ryan’s 20% share! Portrait held 18%.
Horton, Standard Pacific and Pulte
completed the top five with 5, 4 and 3%
shares.
Leading New Home Builders
Single Family
Morgan held its lead position with an 8%
share. Ryan held its second position
with a 6% share. Pulte and KB both
increased their positions one place
taking third and fourth. Centex dropped
from third to fifth.
Leading New Home Builders
Single Family by Price
Quintile I: < $165,000 Morgan, Liberty, Regent, Atreus, Habitat Quintile II: $165,000 –209,000 Morgan, Eastwood, KB, Horton, Atreus Quintile III: $209,000 –268,000 KB, Pulte, NVR, Centex, Morgan Quintile IV: $268,000 -$375,000 NVR, Pulte, M/I, Centex, Shea Quintile V: > $375,000
NVR, Shea, Orleans, Pulte, Centex
Leading Communities
Attached For Sale By Price
Quintile I: < $139,000 Bent Creek, Hanover Crossing, Cascades, Hamilton Bay, Caldwell Creek Quintile II: $139,000 -$180,000 Alexander Chase, Hanover Crossing, Caldwell Station, Curry Place. Regent Park Quintile III: $180,000 -$224,000 Cypress Landing, Avenue, Blakeney Preserve, Stone Creek Ranch, Regent Park Quintile IV: $3224,000 -$289,500 Avenue, Lake Shore, Stone Creek Ranch, Trademark, Elizabeth Quintile V: > $289,500
Avenue, Trademark, Lakeshore, Springfield, Rosewood
Leading Communities
Single Family By Price
Quintile I: < $164,500 Meadow Hill, Reid Meadows, Citiside, Brandon Ridge, Hunter Park Quintile II: $164,500 -$209,000 Carolina Lakes, Hamilton Lakes, Kingstree, Legacy Park, Cedar Mill Quintile III: $209,000 -$268,000 Carolina Lakes, Berewick, Belair, Moss Creek, Regent Park Quintile IV: $268,000 -$375,000 Carolina Lakes, Stone Creek Ranch, Berewick, Cureton, Skybrook Quintile V: > $375,000
Carolina Lakes, Stone Creek Ranch, Baxter, Brookhaven, Lawso
Changing Geography
Attached For Sale
Mecklenburg County continues to hold its
lead with 70% of the new attached market.
York County ranks second with 15%. The next
strongest captures less than 5%.
The North Growth corridor’s share was up 36%
to 15%. The South Growth corridor was down
30% to 17%. The Southwest Growth corridor
was up 17% to 20%, leading all corridors.
Changing Geography
Single Family
Mecklenburg County maintained its leading
share at 40%. Union, York and Cabarrus
maintained their second, third and fourth
positions. Lancaster County moved to the
fifth position with a 50% share increase to 8%.
The South Growth Corridor regained its lead
position on an 18% share increase to 19%.
The Northeast Growth Corridor dropped to
third on a 12% share loss to 16%.
Forecasts
The Charlotte market will probably see
additional velocity shrinkage 2Q08 and slight
shrinkage in the median price for the first
time.
By 3Q08 we expect velocity shrinkage to
mitigate and continue until equilibrium
returns 2Q09 with some further modest price
depreciation.
Growth thereafter will appear in absorption and
pricing but at very modest levels through
2011.
Action Plan
All of your past and current customers should be
interested in these observations. Taylor them
for individual presentations to each as a
means to address their fears going forward.
Knowledge is always a key input to decision
making. The Charlotte market is stressed but
it is the best residential market in the U.S
today! Ask Case-Shiller.
Here is the link to download the .pdf file of the presentation:
Chuck Graham Charlotte's Residential For-Sale Market
Many thanks to Chuck for his always insightful presentations.
Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC
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