Home prices around Charlotte fell last year, but not as much as you might think.
On average, prices across the six-county area fell about 4 percent, shedding the modest gains of 2007.
No one likes a loss, especially in the value of their home. And the outlook this year is lousy.
But put your panic on pause.
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The average price of homes sold last year in more than three-fourths of the area was at or above prices from 2003 through 2005. That means most people who have been in their houses a few years are likely still sitting on gains.
The Observer reviewed Carolina Multiple Listing Services' sales from 2003 to 2008 and found:
Last year, 26 of 70 area ZIP codes, or more than one-third, posted their highest prices of the six-year period.
Only seven ZIP codes posted declines for the period. In Charlotte, the University area's 28262 and northwest Mecklenburg's 28216, both pocked with foreclosures, had the biggest declines.
The region's biggest gain in the six years came in 28206, which includes part of Charlotte's Arts District, or NoDa, and the fragile Lockwood neighborhood north of uptown.
For 2008, Lincoln County's Iron Station led with a 49 percent hike for 28080.
Last year, the top Mecklenburg ZIP code was 28204, which includes the new Metropolitan condos and the historic Elizabeth and Cherry communities.
“The market we had in 2006 and into 2007, that was not a normal market,” said Donna Anderson, president of the Charlotte Regional Realtor Assoc. “We're finding that we're in a market correction.”
No bubble that popped
Charlotte-area home sales began falling more than 18 months ago and ended last year off sharply. New home construction has plummeted.
The many “price reduced” signs are painful reminders of the market's ongoing woes. That suffering is likely to worsen as Charlotte loses high-paying bank jobs and the nation's deep recession drags on.
One reason prices didn't plunge as much as home sales is that people yanked their property from the market. Or they chose not to sell, holding out for better times. But the main reason is that, in general, the region never saw the exorbitant gains of some urban areas.
In other words, we're not a bubble market.
There's no ironclad formula for determining a bubble, but it's basically a gain in prices that's unsustainable and out of proportion to what supports it. Skyrocketing California home prices, for example, were out of sync with wages.
“I don't think we had a bubble in Charlotte,” said Mark Vitner, senior economist with Wachovia, now part of Wells Fargo. Some neighborhoods, such as Dilworth and uptown condos, he said, “got a little bubbly.”
But mainly, “The overall market … is now suffering from the recession and credit crunch.”
The Observer review covered 176,000 home sales made through the MLS from 2003 through 2008 in the six-county Charlotte area. The MLS results don't include sales by owners, often called FSBO. The group also doesn't handle all new home sales.
The analysis covered average prices broken down by ZIP codes, which can include a wide range of neighborhoods, some faring better than others. Average prices also can be misleading. They can be skewed by extremes, such as high numbers of foreclosures, a neighborhood that suddenly takes off or a new subdivision that is more or less expensive than others in the area.
Still, the analysis is one of the most detailed looks at the region's housing market. It provides historic perspective at a time when falling home prices are breeding anxiety.
But it's not a crystal ball.
Experts generally expect 2009 to be another tough year. Recovery, when it comes, is not expected to be a roaring rebound. Home prices in Charlotte have more of a cushion than in many urban areas, but declines will still be painful.
“The forecast we have for brighter days will be probably closer to the end of summer,” said Anderson, with Cottingham-Chalk/Bissell-Hayes. “I was hoping it would be closer to the spring market.”