The ultra luxury category has been the scene of much debate.
There has been much private discussion in the region’s real estate community about the conditions in the ultra luxury segment above $2 million in listed value.
Conditions in the range below $1 million are fairly well documented to be highly active, with many areas seeing very competitive buying markets and limited inventory.
The ultra luxury category has been the scene of much debate however, with some luxury agents speculating of a possible slow down.
The data points do not appear to support a “slow down” in the classic sense of lower buyer activity, in fact recent showing activity, particularly in the 2m to 2.5m range shows just the opposite. That showings in 3 of the regions key ultra luxury areas, Cornelius, Charlotte, and Mooresville, are all running ahead of last year’s March to May period, in some cases by as much as 50%.
The below chart shows the relative increases in total showings in all three areas, according to the regional MLS showing statistics for all homes in the over $2 million range.
(Click Chart Below For Larger Image)
While this is encouraging, it’s not the entire picture.
The chart above describes total showings, which can also be impacted by the number of homes available to look at (i.e. if there are 5 homes listed and 2 buyers, the total showings will at most 10, but if there are 20 homes yet only 2 buyers, the total showings could be 40). So it is important to also consider the average number on a per home per basis.
In all 3 areas, the average runs roughly around 2-3 showings per month, and while this year’s average per home is up slightly in all 3 areas, it indicates that while there are likely more buyers, they also have a lot of options and thus are looking at more houses per buyer. Couple this with the increased trend toward major remodel projects, tear down/build projects (particularly over 3 million in total value), and the ultra luxury market is seeing buyers look at more options, which can mean a longer cycle, spread across both resale and build options.
While the re-sale residential market over 2 million is generally running at or ahead of prior year trailing “sold” numbers (8 at Lake Norman and 9 in Charlotte over the past 6 months vs lower numbers in 2015), as well as very solid “pending” numbers (9 in Charlotte and 5 at Lake Norman over 2 million), the fact that some buyers are choosing the construction option is leaving fairly competitive conditions for sellers in the resale market.
There does not appear to be any type of “slowing” in the sense of number of buyers, in fact the opposite, they just have more options than they did coming out of the recession, when banks were not loaning money for construction projects.
CHARLOTTE, N.C. – The Charlotte Regional Realtor® Association reports on the residential real estate market in this region based on Carolina Multiple Listing Services, Inc. (CarolinaMLS) data.
CarolinaMLS March home sales were down 1.4 percent with 3,254 properties sold in March 2016 compared to 3,301 properties sold in March 2015. Sales are up 38.8 percent compared to February 2016.
The average sales price ($246,891) increased 2.6 percent compared to the average sales price in March 2015 ($240,711). The median sales price ($198,000) increased 3.7 percent compared to the median sales price in March 2015 ($191,000).
The average list price in March 2016 ($368,292) increased 28.6 percent compared to March 2015 ($286,316), bringing the percent of original list price received measure to 95.5 percent, which is an increase (1.0 percent) compared to the same period last year. Preliminary pending sales counts for the month of March 2016 totaled 4,864, an increase of 20.0 percent over last year at this time (4,054).
2016 Association/CarolinaMLS President Maren Brisson-Kuester said, “The CarolinaMLS region, much like the nation, continues with low inventory, which has resulted in a slow start to the spring selling season. However, from a quarterly perspective the region’s home sales are on par with last spring, up 0.3 percent compared to the first quarter of 2015.”
New residential listings were relatively unchanged, down 0.2 percent in March 2016 compared to March 2015. Inventory declined 27.8 percent compared to March 2015, leaving the CarolinaMLS region with a 2.8-month supply of inventory with 10,145 properties for sale. Inventory in March is up 2.1 percent when compared to the inventory at report time in February 2016, with 210 additional properties for sale.
March 2015’s supply was higher with 14,046 properties for sale, or 4.4 months of supply.
The average number of days a property was on the market from the time it was listed until it closed (list to close) was 122 days, which is 7 days less time on market than March 2015. Days on Market, the metric that accrues for “Active” and “Under Contract-Show” statuses only, totaled 69 days, which is 9 days less time on market than last March.
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.
Christie’s is the most recognized and respected 200 year old purveyor of luxury real estate and personal valuables. With extraordinary expertise in fine auctions, estate valuations and the marketing of exclusive luxury properties, the over 1300 Christie’s affiliate offices closed over $113 billion in real estate transactions in 2014.
The credibility and trust associated with the iconic Christie’s brand has led to more out of state buyers selecting Ivester Jackson, with the increased buyer representation volume resulting in 40% growth in 2014 for buyers migrating to the Carolina’s.
Christie’s Around the World
Leading the Charlotte Market
Since affiliating with Christie’s in January of 2014 Ivester Jackson has seen a dramatic increase in website traffic, which is bringing international exposure to our listings. Over that period, Ivester Jackson I Christie’s has risen to number 1 in the Charlotte region for sales of homes valued in excess of $2 million.
Ivester Jackson closed 7 of the 21 highest priced transactions in the Charlotte region in 2014 and closed 37 transactions over $1 million.