Although Charles Dickens never wrote about Charlotte real estate, not to mention that he lived 150 years ago, his most famous line from A Tale of Two Cities still has some real insight into what home buyers are seeing these days. I could summarize the latest housing market report from Freddie Mac with “They were the best of times, they were the worst of times.” Yes, that’s a mixed message – but that’s Freddie Mac’s point:
Freddie Mac released its U.S. Economic and Housing Market Outlook for April, noting that the housing market continues to be “noisy,” giving mixed signals heading into Spring. The government-sponsored enterprise (GSE) did offer some specific market projections for the upcoming buying season.
Freddie Mac projects that new home construction will increase by 18 percent, while home appreciation will moderate to an annual growth of 5 percent for 2014.
The company also commented that due to a slower than normal first two months of the year, they are lowering their home sales projections slightly, from 5.6 million to 5.5 million.
The report says that while home building isn’t keeping up with demand, which will notch up prices for home buyers, and that it expects home appreciation to taper off, the good news balances the bad. Employment remains strong, and the analysts at Freddie Mac also note that the Federal Reserve is expected to keep interest rates low, a sure indicator of future health for home sales.
But I think our friends at Freddie Mac are still overlooking a lot of national good news that more than counters the bad. More important, I see even even more hopeful indicators for the Charlotte real estate market. Yes, the overall economy is robust, with good trends continuing for the near future. I’m sure you’ve seen the latest good news from the stock market, with yet another day of gains, and a record close. And the Charlotte area economy is expected to continue to grow as the region looks to add more employers, meaning more jobs, a crucial factor for home buyers.
Here’s an important indicator that I think we should emphasize. The Pending Home Sales Index counts the number of homes that have contracts but have not sold and compares that count to the base year of 2001. It’s a leading indicator of future closings. According to the National Association of Realtors, the latest PHSI by region breaks down as follows:
Northeast 78.9%
Midwest 94.5%
West 91%
South 112.7%
Yes, you read that correctly: the South has the most energetic real estate market. That’s why I say that with growing consumer confidence and rosy predictions for both the immediate and greater region, there’s no doubt in my mind that we can expect the best of times to continue for Charlotte real estate.
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