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Charlotte Home Sales Way Up, Prices Rise, But Not Investor Related

Charlotte Home Price UP 7%!

Case- Shiller Prices Rise 10% Nationally,

But then, I have recently heard this caveat, “But prices are be being driven artificially high by investors,” Blackrock is commonly cited as one hedge fund investing in housing. There is atleast one other…

True? False? Partly True? I think mostly False, let’s sort this out.

Home sales have risen dramatically these past 6 months, averaging 25-35% higher on a volume basis than the same month one year before. See our market reports here and here. Prices are on the rise as well, Case-Shiller reported a nationwide Tp Twenty Market increase of 10% in March, 2013 when compared to March 2012, and here in Charlotte it was 7% – the largest year over year rise in the index history (2000).

But there is another meme that states that the dramatic rise in prices could be due to massive investor (hedge fund) home buying, companies like Blackrock are cited, and in some markets they are buying “Lots” of homes.

I believe those investors are here in Charlotte. I have run into several multiple offer situations, all on nice properties under $200,000. I submitted 2 listings above the 200k threshold, one at $245,000 and another at $409,000, and neither were “acceptable” to the investors, leaving me to believe they are looking only or mostly at the high return on $120-150K properties.

There is also research. ‘Housing Pulse”, the tracking survey of 2000 real estate agents by Campbell/Inside Mortgage Financing Housing Pulse Survey show that “move up” buyers account for 42% of the market, First Home Buyers 36% and Investors come in at under 22%. So, 78% of the market is made by real home buyers.

I expect a total market valuation- the closed property value of traditional buyers, versus the closed property value of investors, the traditional Buyer would far exceed the investor since the investor concentrates in lower priced easy to rent homes.

Our May Charlotte Market Report is under way! Look for it soon.