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Excellent post MikeyKid!! Homes above 500k are NOT moving and will have no other choice but to come down in price either by a seller reduction or a bank foreclosure/short sale. No one is buying them for several reasons.
Look at how many homes are for sale in LongView, Chateline, Skybrooke, Providence Downs and Providence Downs South. I dare say that 50-75% of the homes are for sale in these neighborhoods. And are these neighborhoods even built out? Are there empty lots still for sale?
Scary indeed for these price points.
I didn't put a huge amount of research into it because I was only looking for a magnitude. However the prices came from Altos Research and I picked a value of 2007 value of $245K. (Carolina MLS shows $220K but it includes a lot more than Charlotte) It has in fact been higher than this. I used $134K which came from the 2000 US census for Charlotte. This yields a 82.8% increase which I rounded down to ~80% given that I only wanted a magnitude and this is the period where homes are considered to have been at their maximum here. Altos currently lists the median price for Charlotte at $199K which is close to the Observer article.
For income, I used numbers very close to yours, but to make it a fair comparison, I also normalized it against the federal reserve note value over the period. In doing show, one finds that actual income dropped. The reason for this is that you have to check to see if income is staying ahead of inflation because not 100% of income is devoted to housing.
It can't be sustained and any real graphs of what is going on indicate that real estate in this county is going to head a lot further down than where they are. Almost anyone that has bought into this mess over the last decade is going to get burnt and badly depending upon where they are on the curve. You don't have to agree with these figures, but any similar effort is going to yield that housing prices are way above what incomes here can really support. Using the average case, it's even more extreme.
Folks, making up your own stats can lead to the promotion of misinformation. Stop making a false correlation between Charlotte’s unemployment rate and the city’s income levels. The two are not related. Income levels are not declining. Just the opposite, they’re increasing. Do you know how to use American Fact Finder, published by the Census? And yes, their numbers are “adjusted for inflation”….
A lot of the information people are “guessing” about is actually information that is available if they took the time to look. And I doubt very seriously if “50 to 75 percent” of the homes in LongView, Chateline, Skybrooke, Providence Downs and Providence Downs South are “for sale”. That would be rather incredible.
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A lot of the information people are “guessing” about is actually information that is available if they took the time to look. And I doubt very seriously if “50 to 75 percent” of the homes in LongView, Chateline, Skybrooke, Providence Downs and Providence Downs South are “for sale”. That would be rather incredible.
Indeed. It might help to check the information that you are actually quoting. The current figures are in 2008 inflation adjusted numbers. The 2000 information is in 1999 dollars. If you normalize the two against either scale, you find that incomes dropped. BTW, as indicated, I used the census as well.
Indeed. It might help to check the information that you are actually quoting. The current figures are in 2008 inflation adjusted numbers. The 2000 information is in 1999 dollars. If you normalize the two against either scale, you find that incomes dropped. BTW, as indicated, I used the census as well.
As Chris Tucker said to Jackie Chan in Rush Hour…”WTH did you just say?” LMAO!!!!!!!! You don’t need to “normalize” anything. The Census gives you inflation adjusted numbers. What are the exact income numbers you used? And where did you get them from? You never showed us that (actual numbers). That’s what Tober138 first asked you.
Carolina Blue not "guessing" on how many homes are for sale in these neighborhoods. I have been looking to buy for over 6 months.
Follow link and click on individual neighborhoods and you will see what is for sale. This doesn't include all of the empty "shadow" inventory that is owned by the banks.
Longview- 45 homes for sale
Providence Downs - 117 homes for sale
Skycroft - 50 homes for sale
Highgate - 40 homes for sale
etc, etc..
Moderator cut: no Realtor links
A lot of these neighborhoods were never built out. There are many lots left to build houses on as well.
Now if you think that there are that many buyers in this price range to stabilize this price point than I guess I am wrong. But I have been watching like I said for over 6 months. You also would think that typically most people don't try to sell their houses during Dec, Jan, and Feb because of the time of the year and wait until spring to put the house on the market. I bet come spring these neighborhoods will be swamped with more for sale signs.
Also, please drive through some of these neighborhoods and see for yourself the "shadow" inventory of homes that are vacant and owned by the bank that are not in the MLS system yet. Very scary.
Last edited by mmoorecharlotte; 01-13-2010 at 12:54 PM..
How do you know the asset devaluation, what this is called, is going to stop at $200K?
I don't think it will hit the brakes when it gets to the $200k and under mark...in fact, I know it won't as my house has "depreciated" (using quotes since a home appraisal is all relative and depends on which way the wind is blowing) on the scale of $5k-$10k since we bought in March 2008. However, I do think the scale of the depreciation will be significantly less than those homes in the markets above that limit as those homes are arguably the (I'm at a lack of a good word to use here, and cautious of offending folks) "fancy/frills/extravagant/desirable zip code" homes that a good number of people are shying away from for a number of reasons (e.g.: realize it's not necessary, can't afford it, etc...). I think homes in the $150k-$200k range are those solid core middle/upper-middle class homes that there is and always will be a market for; for the sole reason of folks need a place to live. If it comes down to giving up the granite counters/extra thousands of square footage/third car spot in the garage and living in an apartment, I think people will choose a more "modest" home before the apartment. And those "modest" homes will be the $150k-$200k.
Don't take this as me knocking homes that have those items or that cost that much...to each their own. I'm not bashing that (heck, I'd like to have some of those things that make a house bump into that price range, but I just can't afford them).
What I'm picturing in my mind is a graph that shows home value/price on the X-axis (at $50k increments, from $0 to $1M+) and percentage of depreciation on the Y-axis. The trend line would be slightly exponential, holding steady at a low percentage through the $100k mark, increasing steadily through $250k-ish, and taking off beyond that.
Basically, I'm fine with my under-$200k home losing $10k, maybe even $20k in appraised value right now. I have no intentions of going anywhere for a long time. We bought the place with the intent to start and raise a family there--maybe even put a family through it (not leaving 'til we're empty nesters). I'm 100% sure I will recover any of that short-term loss over a matter of 10+ years...and odds are, I'll make money while I'm at it. But for those folks who bought into the bubble and paid several or many hundreds of thousands of dollars on a house that could possibly lose nearly 50% of its appraised value, I don't know how they'll deal with it. I think they'd still be in the red over that same time frame and it will be difficult to ever sell.
I hope I'm wrong, to an extent. I hope things turn around and stuff starts appreciating again. My fear is that no one is learning anything through this mess and stuff is going to try to appreciate at a rocket's pace again as soon as things are announced as "better." My proof of this? Get on a realtor's email list out of Central Florida--a region that defined the phrases "housing boom" and "super-inflated home prices." House prices plummeted over the last year or two. However, recently there was a little blip of activity in home sales for one reason or another (likely the home buyer credit). Immediately, sellers began raising their prices on a weekly basis by several thousand dollars a week. IMMEDIATELY they did this! I have friends and family who've had a toe in the water for buying down there and told me this. They're all on automatic email lists that send out messages when properties are updated. Nearly all of the places they were looking at that were worth half a damn jacked up on the scale of tens of thousands of dollars in just a month or two!!! and for what? To be right back to where they were before: not moving? There are too many people out there that are floating in limbo hoping they'll still be able to cash out on that get rich quick investment they made 2-4 years ago when things were hot. They're all too prideful to sell the house for what it's really worth (lower than what they paid) and just get away from it; stop the bleeding. They're all waiting for the market to thaw and get their's sold first.
I wonder what price point will have the highest fillings? <250k or > 500K homes?
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