By Matthew Paul Brown – ResideCharlotte.com
The New Year has begun with a shock wave for real estate buyers and sellers. What a great year for Charlotte real estate in 2015! Our firm experienced over 200 million dollars in sales over the course of last year. Locally, the Charlotte market remains strong, however, sales slowed over the holiday season.
Over the last 60 days, Myers Park, Eastover, and Dilworth areas experienced 28 sales over $500,000.00 in comparison to 36 sales in 2014. There could be multiple reasons for the decrease in sales in these areas. I believe the largest factor is the lack of inventory on the market. For example in all three areas, there are only 63 homes on the active market over $500,000 at the present time. Another factor may have been the new closing rules that went into effect October 3, 2015. According to Lawrence Yun, NAR Chief Economist, this may have played a role in the decrease as well. Our team in 2016 is off to a great start as far as listing inventory.
Featured in this article are a few examples of some extraordinary homes represented by Ivester Jackson | Christie’s International Real Estate. If you are considering selling your home, I would suggest getting an early start on the spring market of homes surely to come available increasing choices for buyers.
Pending Home Sales
Pending homes sales in November 2015 slightly declined 0.9% for the third time in four months as buyers continue to battle both rising home prices and limited homes available as mentioned earlier. The Pending Home Sales Index (PHS), a leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops. We are quoting November because a home goes under contract a month or two before it closes. We fully expect for pending sales to increase over the first quarter. That is good news for sellers!
According to the National Association of REALTORS, foreign investors are continuing to purchase more U.S. properties. This is partly due to a tax bill that Congress passed last month. This tax bill would ease tax requirements of foreign owners when they went to sell the property. In the 1970’s many people in the United States became very concerned with the number of International buyers acquiring U.S. real estate holdings. With that, the tax code Subtitle C – Taxation of Foreign Investment in the United States Real Property was introduced. “Section 1122” Tax on deposition of Foreign Investment in U.S. Real Property.
After the 2008 Great Recession, the real estate industry asked Congress to start backing off of some of the restrictions because we needed more funding and Congress finally did it with the passing of the bill. NAR expects a significant increase in Commercial Real Estate to around 30 billion dollars. One of the main reasons for International interest is the strength and stability of the U.S. real estate markets. Now is a great time for the residential side to experience more exposure to International buyers through the leverage of Christie’s International Real Estate.
What my team is doing to stay on top of the real estate market in 2016
Being REALTORS, we constantly stay on top of market conditions across the globe. For now, the U.S. economy is stable as well as the real estate market. Persistent waves of fear that China’s growth slowdown has much more room to run, that rising geopolitical uncertainties in the Middle East will boil over, and that the U.S. profit margin story is over have pushed markets much lower. With China being one of the largest foreign holders of U.S. debt, the greater the financial stress in China, the greater risks to the U.S. in the way of diminished capital inflows from across the Pacific.
At the close of October, China held some $1.25 trillion in U.S. Treasuries. Although, America’s exposure has grown over the past decade our exposure remains minor. All in all, corporate America’s investment exposure in China is relatively shallow and would have a muted impact on U.S. foreign income and sales. However, we like to keep a pulse on the global market as it does impact our economy and the U.S. real estate market. Right now, I believe that the risk of another recession is low.
*Staying on top of new listings and the local real estate market
* Keeping our eye on mortgage rates and the overall economy
* Delivering unprecedented client service by listening and effective communication
Employment Statistics for Charlotte
The labor market continues to improve in Charlotte, North Carolina. The unemployment statistics have decreased slightly year over year according to the U.S. Bureau of Labor Statistics. Overall, in the United States in 2014 it was 5.5%. In 2015, we dropped to 4.8%.
For Charlotte in 2014 the unemployment rate was 5.5% and in 2015 decreased to 5.3%. Being a thriving city and second largest financial center in the United States outside of Manhattan, we are continuing to attract more Fortune 500 companies choosing to relocate to Charlotte which in turns brings more jobs.
2016 A Year of Constant Change
In 2015, one main source and cause for a shift in the economy was the strong dollar and low oil prices. This continues to be the case in beginning of 2016. With low oil prices the cost of fuel continues to decrease making consumers continue to splurge on major purchases such as automobiles. 2015 was a record breaking year in automobile sales, people are also buying more houses and furnishing them, and making more home improvements.
Continued low oil prices, and a strong dollar, translate into low inflation. Factoring in strong job growth in Charlotte, low unemployment, and positive consumer confidence, these are all ingredients for a continued strong real estate market in Charlotte, North Carolina.
Sources: Department of Labor Statistics, U.S. Trust, CMLS
This market update is only provided for informational purposes only and is the opinion of Matthew Paul Brown.