North Carolina Real Estate Market - Distorded View?
In late May, many U.S. newspapers - including those in North Carolina - published a headline along the lines of "Home Prices Fall 14.1 Percent." And we wonder why the public has a distorted view of the North Carolina real estate market??
The "14.1 percent" story was just the latest illusion, courtesy of a dubious measurement tool known as the S&P/Case-Shiller Index. Case-Shiller develops its conclusions by looking at just 20 metro markets around the United States. Those 20 markets are heavily weighted toward cities where housing prices have busted after a protracted boom. Places such as Las Vegas (down 25.9%), followed by Miami (24.6%), Phoenix (23.0%) & Los Angeles (21.7%), are included in Case-Shiller.
The only North Carolina city that Case-Shiller measures is Charlotte and, oh by the way, prices in Charlotte actually went up during the past 12 months. Statewide, North Carolina home prices are relatively stable. Our average home price in April was $212,523, down 3% from one year ago. The housing market has seen better days here, but it's not quite as destitute as some might have you believe.
Nonetheless, the high price of gasoline, coupled with the housing slowdown, has darkened consumer expectations for the economy over the next six months. The Consumer Confidence Survey is at its lowest point since the dark days of December 1973 when we were in the midst of a recession triggered by the Arab oil embargo.
What buyers need to stay focused on are the opportunities - low mortgage rates and a favorable housing inventory. Freddie Mac and Fannie Mae have eliminated their "declining market" policies, so buyers will have access to safe, affordable financing with down payments of only 5% on most mortgages, and 100% financing available on some loan products. NAR (National Association of Realtors) economists remain optimistic we will see an upturn in home sales this summer.
Everyone needs to stay positive, and DON'T pay attention to the Case-Shiller Index!
Resource: Insight - NC Association of Realtors