As Charlotte leads the nation in home price appreciation, our local paper attacks.

Reading Wednesday’s front page Charlotte Observer headline, I couldn’t help but think how wrong they got it.

“Slump Catches Up to Charlotte” blares the headline, with a picture of the area counties and number like -20% -24%, or -41% Sounds horrible, doesn’t it? You need to read the smaller print to realize they are measuring the decline in new home building permits. Not home prices, the barometer of a market’s health. Unfortunately, every essential element of this front page, above the fold Observer article either missed the point or was at best a half-truth.

Clearly the decline in permits is a sign that the new home construction industry is in difficult times and is going to contract, but Charlotte new homebuilders have been building inventory UP For Years- they had to come to their senses and cut back, and they probably in hindsight were 6-9 months late, so they had to move in a hurry. I don’t mean to make light of the many families dependent on the new home industry to make their living- this contraction will hurt them, and building 25-40% less new homes is not good for our local economy- but it is a home-building industry problem, not the “The Slump Catches up with Charlotte,” it is not a real estate market-valuation issue, which is the national result of the national downturn in real estate prices.

Nationally the US has lost one half trillion dollars in equity-thankfully for those of us who live in Charlotte, Seattle, Austin- and a few others, our city’s have not participated in this great decline.

The report goes on to quote Chuck Graham, a local real estate expert, about the “malaise of the nation reaching Charlotte…” Now I like Chuck and his research, but Chuck’s expertise and client base, comes primarily from the new home industry. They’ve been hurting for sometime here as sales began tailing off in new homes in the 2nd quarter of 2007- and the writing has been on the wall long before the 4th quarter.

So what should have the headline read? Something like this:

Charlotte home prices rose 4.3% for 2007, Slowing in 4th quarter

Despite a slumping new home market, and a 24% 4th quarter drop in homes sold, and the national down turn in real estate, Charlotte is leading the nation’s major housing markets in home appreciation.

The Charlotte real estate market remains strong despite weaker demand, and home price appreciation may be slowing. (It is only one quarter- where one company recorded the prices going up only 1%– most cities would have been happy if it had been 1 % for the year, but of course ours was 4.3%)

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Terry McDonald is a Charlotte Real Estate Broker, former builder and blogger.

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