Homes Over $1,000,000- A Comprehensive Report

Home prices, on homes over $1Million fell 1.8% in the 12 months ending 3/20/08, over the same period a year earlier, while units sold dropped 6.8%-- compared with the 9 county area as a whole, in all price ranges, prices rose 2.3 % on 13% fewer sales.

Just shows- even in one city, there is more than one real estate market. At the very least , you can compare unit sales and appreciation/depreciation numbers across different home value ranges- what I'm doing in this post, but you could also divide it by geography, which I'll introduce in the next post-- and do a little here too.

First, basing all Sold stats on the average cost per square foot of sold homes, you'll see the Over 1 Million category fared quite well last year-- pockets of falling prices, but the blue chip remained blue chip, with south Charlotte and the Lake property leading the way. Lets look at the numbers:

Its hard not to be startled by the enormous number of Homes for Sale, based on the last 12 months sales history. What do the numbers tell us?

1. if you are a seller, if you don't have to sell, take your home off the market. It's better not to be invited to this party.

2. Why so many folks selling? Loan rates MUST be adjusting up. Lets look at a 3.5% interest only loan, that would adjust to say 5.5%... on 1.5M loan, if both had been 100% financed, the payment would have jumped from $4,375 per month to $6,875/month, a 57% increase! Yes I know, the actual numbers are in some cases worse, because they didn't finance a 100% interest only first, but were actually more like 80-10-10 with a higher rate overall, and now, higher still.

Why am I concluding it must be adjusting interest rates causing this sell off? Lets look at another set of numbers and see if we can find a clue here. It may be in the anwser to the question locals often had asked me over  the last several years, "Where are all these people getting the money to buy these great big homes?" 

Because of the massive, 260% increase in home sales in the past 5 years on homes over $1M, is more, much more that can be accounted for by increased housing demand alone. or increases in area incomes, though the number of jobs created and income in the area did rise significantly, but I'm betting not this much... 

3. Sellers, who don't have to sell TAKE YOUR HOME OFF THE MARKET. I know that was #1...  "But Terry, I'm losing $2,000, or $3000 per month with my increased mortgage costs."  I understand, cash out of something, go borrow some money! It will be less than you lose if you put your home on the market in these conditions, and get into negotiations. You could take that 3K loss for 2 years, ride the storm out and be down 72,000 deductible dollars. Or you could put your home on the market, and take a 100-200K price cut to sell it. It is your choice. Every buyer I have today--EVERY buyer is looking for a big deal, a great deal...  So, if you've got to go, take the dollars off up front and get it sold. You may need to consider a shorts sale.

It was good to see our overall prices hold steady or increase last year... it is hard to see that in 2008, as prices seem destined to fall significantly, if only to draw more buyers into the market. Sales are running 11% behind last years pace already.  Blue chip areas like Myers Park, Foxcroft and Moorcroft will fare better than the others, but none will escape without  some red ink.

Buyers, if this sounds like a Buyers Market, I think the Over $1M category is the definition of a "Buyers Market." There are deals to be had... every home sold this year has a story. But- overall absorption raates are much better, with 20,000 homes for sale, and 32,000 homes sold in the last year in the 9 county area covered by the MLS. More detailed studies of appreciaiton, absorption and price trends are available to clients.

Sellers, if you need to sell,  lets get it on the market, and off, before the worst sets in this summer/fall... call me direct at 704-351-1519.

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