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The evidence is now getting very large. Here's a graph of asking price at time of list and actual sales price (note that inventory is about the same as it was a year ago):
Couple things absolutely jump off of this graph. First is that initial list price is now more that 120,000 greater than final sales price. Put differently, people are only getting about 61% of their original list price when they finally sell. That's staggering. Second is that the floor has now dropped out from the final price of homes. The current average sales price is 60,000 below the last high, and is lower than any of the data for the last 42 months. With the exception of a slight hesitation in October 08, the price of houses has been on a ramp down for the last 5 months.
I posted about 5-7 months ago and warned people that it was an awful time to buy. I'm back to say that now is even a worse time to buy. The economy is falling off a cliff, housing markets continue to crash across the country, and Charlotte has now entered the decline full time.
Here's my advice - if you can't put down 50% and be sure that you are going to live in your house the rest of your life, RENT. If you rent instead of buy, you're going to see the prices of houses in Charlotte continue to plummet.
Finally, I'd love to hear everybody's theory on why asking price is going through the roof when final purchase prices are falling through the floor.
(HINT - those who are in over their heads and can't pay the mortgage are desperate to sell and not take a loss. So they set the asking price unrealistically high, figuring, "when we took that option ARM 3 years ago we paid 250,000. But with all the accrued interest and with Realtor fees and with that 10k of "equity" we withdrew we need to sell for 310,000 to break even, so that's what we'll start at."
It's a complete disaster in the making. If you're young, and you're not sure where this is all going, take my advice - RENT, and keep watching the stats - prices have only one way to go.
A Charlotte Observer article from 2/11 directly contravenes your graph. Perhaps you'll share with us your "asking price" source? Perhaps you'll also tell us the username you used last time you posted, since it looks like your current alias is freshly registered...
Obviously prices have taken a tumble in some areas, but many homes have still gained value. This is the worst year since 2003, not 1903...
My zipcode along with 5 others in Mecklenburg have posted better than 40% gains since 2003... another 10 zipcodes posted better than 20% gains in the same period. I don't know anyone whose portfolio has performed that well in the last 5 years.
Wow great graph...I wish you didn't have to hide to share the info!
Looks like the source is carolinahome.com. The data is spot on. For example look at Area Statistics for residential homes. For Jan 2009, New List is 314,259 and Avg Sale is
$ 189,048. Below is the source. It matches the OP's graph. If you look at the stats for other months, the data matches as well.
I'm not totally surprised at this. People who are defaulting on their homes now are people who purchased later and much closer to the peak or AT peak. So that means their purchase price is higher. They now are trying to list the home at what they purchased it for, but obviously it's not going to sell at that price, so they reduce it and reduce it and keep reducing it until it sells.
To me this is an eye opening graph and 5* to the OP for creating it.
If someone can share why this is wrong or has an opposite opinion, I'd like to hear it. (I'm sure I'll hear it from you guys!)
David, you sound like another "friend"...LondonLawyer...
where I would agree that housing prices have gone down, real estate is always a good investment LONG TERM. Now, if you are buying to sell in 2 years (or less) and want to make a killing, yes, you are right. Flipping houses right now is not a great idea unless you get them REALLY,REALLY cheap. But, if you are buying with the idea of staying in your home for the next 10-20 years, this is a great time to buy.
Please don't add to the mass hysteria already out there!!
David, you sound like another "friend"...LondonLawyer...
where I would agree that housing prices have gone down, real estate is always a good investment LONG TERM. Now, if you are buying to sell in 2 years (or less) and want to make a killing, yes, you are right. Flipping houses right now is not a great idea unless you get them REALLY,REALLY cheap. But, if you are buying with the idea of staying in your home for the next 10-20 years, this is a great time to buy.
Please don't add to the mass hysteria already out there!!
Be careful with the statement. I've heard realtors all over town making the same statement. It should be caveatted by saying that "Its a great time to buy IF you have good job security." I would be hesitant to buy in this market no matter how low the prices are because people are losing jobs that they thought were "safe" everyday.
This chart does not tell the story you are trying convey. What this chart says to me is houses that currently being listed are being listed for $312,000 or so and houses that are being sold are being sold for $190,000. Not that $312,000 houses are being sold for $190,000. this Shows me lower priced houses are selling and higher priced one are not. To support your theory you need to look at the list and sale price of each home sold and determine the percentage difference between sale and list price. The chart should then show the change in the relationship between the list price and sale price. Example; were houses being sold for 99% of list price 3 years ago and now they are being sold gor 94% of list price. That will tell the story.
Seriously...is there a "let's try to undermine Charlotte" club out there? Do folks really have nothing better to do than stir up doom and gloom thoughts? Is their life that unfulfilled that they feel the need to spread panic into other sheep who would believe their negative hype? It's sad really to see folks so hell-bent on trying to bring down a region. Jealousy really is ugly.
I thought these sorts of posts were taking a break for a little while. Thanks for putting another quarter in the machine. It was getting too peaceful around here...we needed some annoyance.
You can take a bunch of data and make it look anyway you want. Trust me, I get paid big money to do that LOL
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