The Charlotte region is showing new signs of weakening home sale prices as the nation's historic housing slump drags on.
The region's median sales price for all homes sold during the second quarter was $184,000, down 1 percent compared with a year ago, according to Market Opportunity Research Enterprises, a Rocky Mount firm that tallies sales data from public records.
That's the first time that region-wide figure has slipped into negative territory during the current downturn. Iredell County, which includes upscale Lake Norman neighborhoods, took the biggest hit, with a 13 percent drop.
“We're seeing prices come down dramatically,” said Realtor Jack Ziegler, whose husband-and-wife Team Ziegler works in the Lake Norman area. “There's such a lack of buyers.”
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Home sales dropped 37 percent in the eight-county Charlotte area, compared with the second quarter last year, according to the research firm's M.O.R.E. Report. Building permits plunged 52 percent. That signals ongoing weakness.
Area home prices had been holding up, even as sales and new home construction dropped. Charlotte market prices still look good compared with tanking prices in bubble markets. But now prices are showing the strain.
Rising foreclosures, a key trigger in the downturn, have added to the inventory of homes for sale and depressed prices. Newcomers, unable to sell homes elsewhere, can't buy here. That hurts sales and pricing. Many potential buyers also are waiting, hoping for better deals.
Experts have said the second quarter might have been the region's worst, the hoped-for market bottom. But recovery will likely be slow. Credit remains tight, the economy weak, and consumers are saddled with high prices.
The pricing slide shown in the M.O.R.E. data is in line with a popular national home-price tracker that showed the Charlotte area's first declines in April and May. The monthly S&P/Case-Shiller Home Price Index looks only at resales of existing homes.
The M.O.R.E. Report, one of the most in-depth reads on the local market, captures virtually all sales of new and existing homes and breaks down results by county.
For Mecklenburg, median prices for sales of new and existing homes remained unchanged, at $184,500, compared with the second quarter of 2007. Three of eight counties showed small gains, all less than during the first quarter. Four showed declines, with Iredell the only double-digit drop. Iredell also had the poorest first-quarter showing with an 8 percent drop.
Using the median, instead of an average, reduces the skewing caused by extremes.
Prices for existing homes, accounting for nearly two-thirds of the region's sales, fell 2 percent.
Ziegler, the Realtor, slashed $150,000 from the asking price of a golf course home at The Peninsula, hoping that would entice buyers to an open house last weekend. No one showed. Visits to nearby open houses also found no lookers, he said.
“If the supply of homes is increasing and the sales are declining, there's only one place price can go,” Ziegler said. “Business is slow – but not dead.”
Jeff Tarte, owner of the five-bedroom Cornelius house, says the upside of the slowdown is that the builder of his new home is able to spend more time on detail and has extra people on the job. Tarte, the town's mayor, and wife, Nancy, can afford to wait out the market, although they would like to sell and put the money toward their new house.
“I'm not going to give it away,” he said.
New home prices notched a 2 percent gain but have been wilting as builders discount to generate sales.
At Pulte Homes, buyers are asking for discounts to offset the lower sales price they got back home, said Jon Hardy, the national builder's Charlotte area division president.
Pulte's local projects include Sun City Carolina Lakes in Lancaster County, S.C., the Charlotte area's largest active adult community.
Last year, nearly 700 homes sold in the 1,552-acre project, a local record. That rush represented initial demand. Going forward, Hardy expects annual sales of about 400 units, still above initial projections.
Undaunted by the slump, Hardy, an industry veteran, said Pulte is putting up 176 spec homes in the region, priced from about $170,000 to $400,000.
“People still want to buy homes,” he said. “Charlotte is going to come out of this thing.”