Scott Wurtzbacher’s Blog

This week our listings saw an average of two showings each which was a bit slower than the prior week’s surge but still about right.  I always tell my seller’s that two showings a week is good traffic.

Yesterday the groundhog came out of his hole and saw his shadow, which means six more weeks of winter.  Bummer.  So, what does that mean for the real estate market?  Will it be slow for six more weeks until the spring buyers come outside, ready to purchase a home?

They might, but if they wait too long they miss an opportunity to get a tax credit which expires on April 30.  Yesterday, the chief economist of the National Association of Realtors reported on pending home sales nationally.  In his article, Dr. Yun notes that pending home sales surged toward the end of last year, likely because of the first time buyer tax credit that was set to expire on November 30, 2009.  The pending sales indicator has since stabilized but is still well above the levels from this same time last year.  Most likely, we will see a similar surge again this spring prior to the April 30th expiration of the first time and repeat buyer credits.

In my blog last week, I noted that showing traffic has surged.  It has slowed a bit this week, but that could easily due to the snowy weather which just about just down the city of Charlotte for a couple of days.  If the groundhog is correct and the bad weather continues, sales could be sluggish for a few more weeks.  But for the city of Charotte that sees 226 days of sunshine a year, I’m hopeful that Punxatawny Phil (who lives in Pennsylvania) is wrong.

This week our listings saw a whopping average of 3.2 showings each.  This is more than double the traffic we had last week.  Perhaps that is an early sign of what I’ve already predicted to be a strong first quarter.  USA today tends to agree.  Here’s a link to a great article they published this week suggesting that buyers are out earlier than normal this year because of the tax credits that will expire on 4/30/10:  Springtime home buyers out early 

The economy continues to show signs of improvement, the real estate statistics in Charlotte are moving in the right direction, and most of the fellow agents with whom I’ve interacted are saying that things have gotten busy in a hurry.  Now the showing traffic has picked up tremendously in a short period of time.  Hopefully, this increase will translate into contracts and home sales.  For those homeowners worried about the drop in prices over the past two years, remember that appreciation has to start with increased home sales volume.  So maybe we don’t see huge price gains this year, but the next boom definitely is coming.

This past week our listings saw an average of 1.2 showings each.  That number seems low but in comparison to the last few holiday weeks, it is a huge increase.  Just in the past few days we’ve seen a nice influx of showing activity.  All factors that I have seen, read about, and experienced directly point to a solid 2010 for the Charlotte real estate market.

Next week I will publish my monthly E-Newsletter where I report the real estate stats for the prior month in Mecklenburg county.  The numbers for December 2009 are in and they are very encouraging.  Although the differences month over month are small, every indicator shows that the market is back on a upward path.  Here is a brief summary of the December market stats:

Home sales are up 28% over this time last year.

The average sales price is up a whopping 12% over this time last year.

Average time on market is up from last year but holding steady since the prior month.

Pending home sales are up 23% from last year.

Housing supply is up from last year, but down since the prior month.

Mortgage rates are still well below where they were this time last year, but rising steadily.

In most areas of town, it is still a buyers market.  But as I discussed in my blog last week, that is changing.  Over the past 6-8 months there truly has been no better time to buy real estate.  That window of opportunity is closing.  Its an exciting time for both buyers and sellers.  Buyers can get a great deal with a super low interest rate right now.  But sellers, your day is coming.  It will give me great pleasure to sit regularly with my seller clients and once again be able to tell them that we are experiencing a seller’s market.  That day is coming sooner than you might think.

This past two weeks our listings saw an average of less than one showing each.  Given the time of year, this is certainly not any cause for concern.  The holidays are over and we should slowly begin to see priorities shift back to normal routines.  As there really was no normal in 2009, we can start fresh in 2010 as a new normal becomes defined.

The general consensus throughout the media and during casual conversation was that 2009 was a tough year and just about everyone is glad its over.  For the Charlotte real estate market that summary is accurate.  But if we disect the year as it progressed, there is no doubt that it went from bad to better.

Throughout the holiday season I had the opportunity to socialize with a variety of different people from small business owners to corporate execs and consultants.  As discussions of the economy and the real estate market took place, there was a definite pattern that I noticed.  Most people agreed that 2009 started out rough, very rough.  But by the second half of the year, things really started to turn around.  I got a sense that many people were afraid to admit that by the second half of 2009 the worst was over and things were really beginning to improve.  It was almost as though people were hedging against a second economic dip.  And that’s understandable since the financial downfall was so deep and difficult.

But the reality seems to be that once the “reset” button was pressed between October 2008 and March 2009, real estate and the financial markets have started back on a path more like what we would have expected before the big boom and bust.  The majority of people I spoke with felt that 2009 finished strong and far exceeded what most would have expected based on how the year started.

For me, one of the most encouraging examples of the recovery hit me when I was talking with my first new seller clients in 2010.  Each time I sit with a new client to talk about listing a home, we evaluate housing inventory in their neighborhood to determine whether they are experiencing a buyer’s market or a seller’s market and to what severity.  For two years from 2008 through 2009, I have seen housing inventories in different neighborhoods from 7 or 8 months supply in many first time buyer neighborhoods to almost 5 years for many homes over $1M.  The general rule of thumb is that a 6 month supply is a balanced market.

Well, my new client’s (and I) were pleasant surprised to see that in their small neighborhood in Hunstersville, (homes priced from $125-$200K), they were experiencing a 5 month supply based on the last six month’s trend.  For the first time in two years, I had the pleasure of informing sellers that their neighborhood was experiencing a seller’s market!  It was invigorating and extremely encouraging.

I am very confident that 2010 will continue to be a year of recovery and will finish strong.  We have a long way to go before the entire Charlotte real estate market can be classified as balanced.  That’s because the high end real estate still has a huge over supply.  But if the lower end home sales continue to be strong, then eventually there will be a “trickle up” effect that will begin to lower inventories in the higher price points.  I can’t say that the market as a whole will be balanced by the end of 2010, but rest assured….its coming.

This week our listings saw an average of 1.5 showings each.  It is expected that the next two weeks will be slowing from a showing standpoint, but things should pick up nicely again after the first of the year.

Last week we published our monthly E-Newsletter and reported the Charlotte market statistics for November.  Here is a quick summary of how things look when comparing November 2009 with the same period last year:

Home sales are up a whopping 43%.

The average sales price is holding steady, with no significant increase or decrease.

Average time on market is up about 7%.

Pending home sales are up 22%.

Housing supply is up 23%.

Mortgage interest rates are down to 4.88% from 6.09% a year ago.

All told, the outlook for our area is good for 2010.  It will still be a year of improvement, but assuming no major negative news in the national economy, we should begin making some forward progress.  The increased home sales and pending home sales numbers are an indicator that people are feeling much more confident today than a year ago.

This week our listings saw an average of 1.3 showings each.  With less than two weeks until Christmas, most buyers are putting their home shopping on the back burner until after the first of the year.  In an up or down market, this is normal.

On the national real estate front, it was reported last week that the pending home sales indicator is up for the ninth straight month.  In an article at Realtor.org, the chief economomist of the National Association of Realtors, Dr. Lawrence Yun, sites the first time buyer tax credit as the major stimulator.  He also notes that the new tax credit and extension of the previous credit should cause another surge in mid to late spring.  His logic is that the new tax credit will get repeat buyers out into the market, but it will likely be a few months before those buyers translate into sold listings.

The Charlotte market has seen similar increases in our local pending home sales.  Currently, they are up about 20% over last year.  it is important to note, however, that they are also down over the previous month, which again is normal based on the time of year.

My best advice for anyone watching the market right now?  Sit tight, enjoy the holidays and expect a solid year for home sales in 2010.

This week our listings saw an average of 1.7 showings each.  Considering that the past seven days included the weekend following Thanksgiving, the show traffic was higher than expected.  Perhaps this year, Black Friday sales included real estate!

2009 has certainly been a roller coaster ride for real estate.  It started off at the bottom of the worst recession in years and finished off showing strong signs of recovery.  Home sales have picked up tremendously during this second half of the year.  As a practicing Realtor, I’m both happy and surprised to say that my listings have been selling faster than I’ve been taking on new ones which is a sign that inventories may be starting to head in a better direction.  It also means I’m ready for more listings, hint, hint.  I digress. 

This certainly does not mean the slow ecomony has completely recovered.  We have a lot of room to go.  And for those sellers who were hoping to find a sale before the end of the year, what should they do? 

If your home is currently listed and hasn’t sold, you might be thinking about a price reduction.  Especially if your home has been listed for 60-90 days or more without a price change.  Should you reduce your price in December?

The short answer is that it depends on how urgently you need to find a sale.  If you can afford to hang on for an extra month or two, then you are probably better off to wait until after the first of the year.  During the December holiday season, priorities shift and the buyer pool for real estate temporarily decreases.  If you’re not getting many showings or offers this month, it doesn’t necessarily mean your home is overpriced.  It could just be that your prospective buyer is waiting until after the holidays.

Seasonally, the lowest average home prices through the year occur in January and February and they start creeping back up again in March.  This means that buyers writing offers in December and January are getting the best prices.  The price increase in March is likely due to buyers being willing to pay more after a fresh start and a new year.  So if you can swing a couple extra mortgage payments, you might be better off to hang tight, enjoy the holidays and rest assured that the new year will bring ready, willing and able buyers.

Of course if you are pressed for time, can’t afford your payments, or under other extenuating circumstances, a price drop for a quick sale may be just what you need.  As with any sale, it is always a balance between time on market and maximizing your sales price.  In the month of December, that balancing act just requires a bit more give or take.

This week our listings saw an average of 1.4 showings each.  As we head into the Thanksgiving week and the beginning of a six week window of holidays, it is expected that traffic will slow and priorities will temporarily shift.  Do not fear and be encouraged.  Last week we sent our monthly E-Newsletter and published the Charlotte Market Stats for October 2009.  I’m very pleased to share that the data is very positive.

Before discussion of the good news, I’ll get the bad news out of the way.  Home prices were down in October 2009 by 13% over the same period in 2008.  This does not concern me in the slightest.  October 2008 was a historical time for the economy in general because that is when the markets crashed and no one new how bad it was going to get.  However, the closings that occurred that month represented contracts that were written in the months prior to that.  Therefore, prices in that month were not reflective of the conditions at that time.  After many months of a declining market, it should be obvious that prices would be down this October.

The good news is that in October of 2009, homes sales were up 20% and pending home sales are up 30%.  This surge in home sales was the largest jump in sales that we’ve seen since the market slide.  And the fact that pending home sales are up 30% means that we will continue to see strong home sales in November and December.  In a real estate market recovery, home prices will not rise before the number of home sales does.  We are starting to see step one take place right now.

There is an old saying that market bears jump out the window, while the bulls climb the stairs.  I think that’s exactly what has happened and will continue to happen.  The bear has landed and our bull is starting its ascent.  I’m not suggesting that we’ll see a bull real estate market like we did in the early 2000s, but I do think we are on a solid path forward.  For that, I’m thankful.  Happy Thanksgiving!

This past week our listings saw an average of 2 showings each.  I’ve been pleased that traffic has remained steady even though we are heading into the early part of the holiday season.

Recently I’ve been writing a lot about the first time buyer credit and now the new $6500 credit for repeat buyers.  This new credit is available to repeat home buyers who have lived in their current primary residence for at least five years.  More details can be found on the IRS website.

The limitations are that you must be under contract by April 30, 2010 and closed by June 30, 2010.  At first glance, this seems like plenty of time for those buyers that are interested.  However, most repeat buyers that would qualify for the credit must sell their current residence first.  Considering that the market is still relatively slow, it could take a few months for those buyers to sell.  At a minimum, a wise buyer should secure a contract on their current home prior to signing a contract for their new home.  Additionally, the IRS rules say that buyers must sign a “binding” purchase contract by April 30th.  Therefore it is questionable whether or not they would allow a “contingent” contract, meaning that the buyers new purchase would be contingent on the sale of their current home.  The law is still fairly new, so we’ll have to wait on further clarification there.

The bottom line is that the $6500 credit is a great incentive for repeat buyers.  However, those looking to take advantage should act quickly.  Listing right after the first of the year and setting a very realistic, aggressive asking price would be a step in the right direction.  But the window of opportunity is limited so anyone interested in giving it a go would be wise to get the process moving immediately.

This week our listings saw an average of 1.6 showings each.  Traffic is slowing a bit as expected due to the fast approaching holiday season.  The real estate year is winding down but recent developments give cause for renewed expectations for next year.

On Friday, our President signed the extenstion of the first time buyer tax credit along with some positive changes.  Income limits to qualify for the credit have been increased and a new $6500 credit is now available for repeat buyers as long as they’ve had their primary residence for at least five years.  Over the next few weeks, I’ll highlight some of the expected impacts of this change.  I expect it to be a primary source for a strong first half of 2010. 

In the meantime, here is a link to the details of the changes on the IRS website.  Real Estate Purchase Credit