During 2009 across Mecklenburg County, the average sales price was 89% of the asking price for homes that sold during the year. The average selling price of a home in ’09 represented a 4% decrease from the previous year in the same area indicating an increased motivation by sellers and more willingness to budge of off the asking price.  
 

The average asking price of homes that sold in 2009 was down approximately 4% from the previous year indicating that sellers are asking less money for their homes. Combined with the willingness to negotiate more, the average sales price of homes was 8% lower than the previous year at an average sales price of $200,400.
 

Interestingly, the number of homes sold in Mecklenburg County was down only 10% from ’08 for a total volume of 22,112 homes. There are over 27,000 homes available on the market currently representing 15 months of supply. This time last year, there was approximately 13 months of supply on the market but a decline in the number of homes sold results in the increase of supply. Increasing also in’09 was the average time on market for homes that sold which moved up  to 145 days from 135 days in ’08.
 

In the Uptown of Charlotte, the market wasn’t as friendly as the city as a whole. The total number of homes sold in Uptown Charlotte was 153 in ’09 which represents a 15% decline from the previous year. To provide some context, the number of homes sold in ’07 and ’06 was 374 and 426 respectively. The average selling price of homes in the Uptown was $275,888 which was a decline of about 16% from the previous year.
 

The good news for the Uptown is that it appears that there is some stability in the number of homes sold each month and that it appears there’s some consistency now to the market. The bad news is that there are 245 listings on the market in the Uptown representing a 19 month supply at the current sales velocity.

That’s where we’ve been. So where do we go from here?
 

The real estate market is driven by primarily by jobs. With unemployment at approximately 11% in Mecklenburg County, the push for price stability will largely come from increases in demand which will require job growth.
 

One of the biggest dangers in the marketplace today for real estate is new foreclosures. Some foreclosures are unavoidable due to job loss or financial loss. There is an alarming trend that has received little attention but is potentially hazardous in the realm of foreclosure called “Strategic Defaults”. This type of foreclosure is the decision that some home owners in depressed markets are making because it seems best for their financial situation. In certain markets, the financial benefit of walking away from a loan can’t be argued with by using numbers. There are numerous ethical arguments around the obligation of home owners to the lenders and the promises made to repay and their obligation to their neighbor, but the most important thing to understand is the impact this trend can make on society. In 2009 it was estimated that more than 25% of the 2.8M foreclosures filings were “strategic” meaning that 700k families chose to walk away from their mortgage. This alarming trend is no surprise because so many people went into their real estate “investment” expecting large returns quickly. When owners with a short-term mindset give up on the possibility of large returns, some owners choose to walk away. In Charlotte, there is little indication that this trend is taking place but owners need to be aware that this alarming trend with incredible potential for a snowball effect. The solution is quite simple, keep making payments on your home as long as you can.
 

For buyers who are interested in taking advantage of more options and lower prices, the harvest is plentiful. For sellers who don’t need to sell their homes, it’s better to just stay put for a while and remember the investment in real estate is long-term. For the sellers who have to sell, it will likely be painful but the good news is that the market for your next purchase may allow you to recoup your loss.