Pros disagree over strong home sales
"Republished with permission from The Charlotte Observer.  
Copyright owned by The Charlotte Observer. 

By ALLEN NORWOOD

A few real estate pros call to grumble every time we run statistics showing that home sales remain relatively strong in this uncertain economy. The report indicating that Charlotte-area sales were up 9.4percent in August brought this: "What do you mean up? We're dying out here!"

He didn't want his name used - for fear of sounding too pessimistic - but he isn't alone. There's wide agreement in the real estate community that there's a gap, even a gulf, between what real estate professionals see in the headlines and what they see going on in their offices.

"Sometimes I just can't figure it out," said Virginia Popovich, a broker for Cottingham-Chalk.

There are all sorts of reasons. One, of course, is the nature of statistics: The average doesn't match individual personal experience. As the pundits say, unemployment is 100percent if you've lost your job.

Realtors typically focus on dollar volume while many key indicators are reported in numbers of sales. We always look at the numbers of residential contracts in the monthly multiple listing service reports, for instance, because that's the most current snapshot of sales activity. Closings follow contracts, so they aren't as current. So far this year, the average time between contract and closing is 46 days.

The September report showed that contracts were down 2percent, compared to the same month last year - but the total value of those contracts had fallen even more.

Also, there's wide agreement in the real estate community that sales in some areas at upper price ranges have slowed dramatically.

That includes MLS Area 5 in southeast Charlotte, the traditional heart of the market, where the average closing price last month was the highest in Charlotte and surrounding counties.

Dan Cottingham of Cottingham-Chalk said that area has been hard hit because of the glut of homes listed there - 485 new units in September, the most in the MLS - and because of the prices. Homes priced above $400,000 have been especially slow to sell, he said.

Ann Flouhouse of Coldwell Banker Flouhouse agrees: "I would even go so far as to say anything from $300,000 up has slowed. Those $700,000 and $800,000 houses, they're just not moving right now."

Flouhouse said Area 5, roughly between Park Road and Providence Road stretching from uptown to the county line, is still hugely popular. Like Cottingham, though, she points to the numbers of homes on the market and the many choices buyers have now.

"(Area 5) has been a stronghold," she said. "Now, you have more options in different areas: The center city, the north is opening up, Union County."

And given so much choice, buyers often pick new homes over resales.

Mike LaRuffa of Builder Services Inc., which represents about 50 builders accounting for perhaps 15percent of new homes here, says BSI's business is up. The company's new home sales are up 18percent for the year, and total value is up 15percent.

"I feel kind of bad when I'm in circles (of Realtors) hearing tales of woe," he said. "It's not happening to us."

The busiest price range, he said, is $160,000 to $180,000.

Popovich, Cottingham and Flouhouse agree that real estate agents who focus primarily on existing homes in upper price ranges in such traditional hotspots as southeast Charlotte have seen their business slow. Many veterans do concentrate there, which helps explain those telephone calls we get every time we report the overall MLS statistics.

It's not only the MLS stats that come under fire, by the way. Flouhouse said her firm's sales volume is up 8percent for the year - and some of the firm's own brokers say that number must be flawed, too.

Flouhouse said that to be successful, real estate agents must balance their business. They need both existing homes and new homes, at a wide range of prices. Any agent who limits herself to one slice of the market, however successful it has been in the past, will run into trouble sooner or later.

One bit of good news for consumers in all this is that Realtors are refocusing on customer service.

"I'm encouraging my agents to go back to basics," Flouhouse said. "Everyone has gotten so listing focused. We need to get back to selling."

Cottingham said some of the complaints are based on perception, not marketplace reality. "Charlotte real estate has been going 85 mph for so long that when it quiets down to 70, we think it's slow."

But he also says that the Charlotte market has been recessionary longer than the stats indicate or some seasoned pros admit. The bit of good news there, he said, is that the upturn is likely to come sooner because the slowdown is already half over. He predicts the surge to come at the lower price ranges, which are particularly sensitive to today's bargain mortgage rates.