Until recently, the Charlotte area's housing market had not experienced steep declines, extended days on market, or inventory swells that have plagued the bubble markets around the country. However, a year and a quarter after it all hit the fan, we're finally in the thick of our very own housing meltdown....for some.
Unlike the bubble markets of California, Florida, Las Vegas, and the north east, Charlotte never experienced a large run up in home prices. Builder inventory was keeping the demand at bay and holding prices low. In the last few years, as many as 80,000 people a year were relocating to the Charlotte area and some with no jobs and homes to sell elsewhere. They weren't all retirees but folks just looking for a much higher quality of life than what they had been experiencing.
Fast forward and there were 19.53% fewer sales in September 2008 than in 2007 in the entire Charlotte MLS. While that is a large decline, it is a little less than the decline in the number of sales above the FHA limit for Charlotte (rounded to $320,000). The market above $320,000 had 43.07% fewer sales in September ‘08 than during the same month in 2006. Currently, there is a 24 month supply of homes above $320k and only 9.45 month supply below. That is for the entire area covered by the CMLS!
I didn't use 2007 since September was a when a lot of the fear and panic first started to spread into the market and there were dozens of banks which went bankrupt then.
It's clear than that the conventional and jumbo credit markets are still presenting challenges for a large number of buyers. Therefore, if the government wants to help those down on wall street, they need to increase the FHA limits to a least $1.000,000 permanently. Buyers of high end homes depend on the market's below being stable in order to facilitate their sale. Without the move up buyer waiting in the wings, that high end home will remain on the market for a significantly long period of time, reducing price numerous times or ending in foreclosure. That doesn't inspire a lot of confidence in the market.
With wall street looking to find stability in the housing market, this would provide that stability that's much needed in Charlotte and throughout the country.
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