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Chuck
Graham
Charlotte Real Estate Consultant
Chuck is a veteran of the Charlotte real estate
market and principal of Newton Graham Consultants, where he directs all
feasibility and marketing assignments as well as general management
consulting in the areas of strategic development, organizational
structuring, control systems and financial management. He holds a
bachelor's in architecture, magna cum laude, from The University of Notre
Dame and a master's in business administration from Harvard University.
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As good as the last
five years seemed for housing in Charlotte, we did not enjoy the
phenomenal boom market that the country’s other hot spots did. This may
seem surprising and at first glance, a bit negative. It is not. The fact
that Charlotte avoided skyrocketing appreciating rates is one of the major
factors currently helping the market retain its relative stability and
affordability.
Charlotte experienced steady appreciation from
2003 to 2008
While we may have been jealous of the 20 to 30 percent gains in
California, Nevada, Arizona, and Florida, we escaped the bubble, which
ultimately burst. Charlotte maintained an appreciation rate of
approximately six percent and remained far more affordable than these boom
markets. The area also posted attractive household and employment growth,
further boosting its resistance to market fluctuations.
Other factors supporting Charlotte’s relative strength include fewer
investor sales and subprime loans compared to other parts of the country.
In 2006, investors accounted for 14 percent of sales in Charlotte, versus
the national average of 22 percent. Sub-prime loans were 13 percent of the
transaction base here, nine percent lower than the nation. Additionally,
inventory levels in Charlotte for new homes average about seven months of
supply versus the national average in major markets of 12 months.
Despite all of the strong dynamics, Charlotte
is feeling some pain from the national housing situation.
Changing lending standards and difficulties in re-sale markets in other
parts of the country have impacted Charlotte as evidenced by slower sales
in the fourth quarter 2007. Builders have cut back dramatically on starts
in response to market conditions, reductions in construction loan funding,
and less funding by national builders.
Charlotte may be much more of a buyer’s market than it has been, but it
is much healthier than most and should not be compared to the boom/bust
markets we read so much about.
| Now let's take a look at the
numbers for 4Q2007, Fourth Quarter
2007 |
| Moving right along,
here's 1Q2008,
First Quarter 2008 |
Reprinted
from the Charlotte Home Builders Association March 2008 |
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