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How much are those homes really worth?

By Allen Norwood
Allen Norwood
Allen Norwood writes on Home design, do-it-yourself and real estate for The Charlotte Observer. His column appears each Saturday.

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Two closely watched home price indices have just been released – both said prices are up in Charlotte – and the regional MLS statistics pros are preparing their monthly report as I write this. (Their report will say prices are up, too.)

It seems a like a good time to remind you that there’s a world of sales information just a click away at www.carolinahome.com, the online home of Carolina Multiple Listing Services. You can peruse sales data for your listing area and even pull individual recent sales from your neighborhood.

I’ve been writing about the MLS for 17 years. It’s far more complete, more useful to buyers, sellers (and stats wonks) than ever. For instance:

• When you click on Market Data and then Monthly Reports, you’ll find both averages and medians. It was not always so. The monthly report of sales activity used to list only averages. It started including medians about three years ago, said Kim Walker of the Charlotte Regional Realtor Association, which operates the MLS.

Medians are a more accurate reflection of the market, according to every economist I’ve interviewed.

Averages tend to skew high. That is, sales of a relatively few very expensive houses will lift the average. When you visit the site, notice the gap between median and average, and any changes over time. That hints at how high-end homes are selling.

• You might notice asterisks beside the closing price lines on the monthly chart. They’re important, especially these days. The footnote says the prices don’t include “seller concessions.”

In this recovering market, it’s common for buyers to ask sellers to contribute to closing costs. The footnote means that the MLS has not subtracted any seller closing costs from the closing prices of houses.

• The MLS closes the books on its monthly report on the 5th of the following month. It used to close the books at the end of the calendar month, but that meant the report didn’t reflect all the sales in the month-end flurry. Some didn’t close in time.

That’s been the practice for a while, though, so if you compare this week’s October figures to the same month last year, you’re comparing apples to apples. Which brings us to another point…

• The Charlotte region is growing and changing, and so is the MLS. Over the years the MLS has added adjacent counties, for instance, and more recently began including some S.C. sales figures. Years ago, when you compared a month to the same month a year earlier, you might not have been comparing apples to apples. You had to allow for any changes to the MLS over the 12 months.

Now, Walker said, when a new geographic area is added, she tries to collect a full year of stats for that area before including it in the monthly report.

A final thought: The monthly S&P/Case-Shiller and CoreLogic indices, which were just released, are based on repeat sales, and do not count new homes. The monthly report from the National Association of Realtors isn’t. It’s based on data from multiple listing services, like CMLS, around the country.

It’s based on a far larger sample than the indices, which some experts say is important, but it’s not a tally of all the closings from all the listing services. It’s a huge, representative sample – but it’s based on about 40 percent of closings.

Special to the Observer: homeinfo@charter.net
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