Real Estate Data: Charlotte NC Edition

Given the sorry state of the national housing market, how is Charlotte faring?

Let's look at some of the towns around Lake Norman: Huntersville, Cornelius, and Davidson.

Median home prices for three communities in the Charlotte NC area. Data as of February 15, 2008. Single Family Homes.

At around $300,000, Huntersville and Cornelius are nice upscale markets in a pleasant part of the world. Davidson is a little higher-end and is showing some signs of weakening prices off about 5% from last autumn. Davidson also has the highest days-on-market measure for all three towns. At 140 days, these properties are definitely not flying off the shelves.

But as you can see from the price chart, home prices in this part of the country seem to be holding up. Why is that?

We see two common themes of housing markets avoiding the big crush this winter:

1. They're markets that didn't climb spectacularly high during the boom.
2. They're steady growth economies.

What's a steadily growing economy mean? Well for one thing, it means people are moving in to the area. Check this population chart from Ersys.

Population growth in Charlotte NC. Dark blue shows the highest growth: 100%+ from 1990 to 2000. The cities we're looking at in this post are at the dark blue top edge of the image.

So the Charlotte area has those two things in it's favor. What's next? Where does the market go from here?

Like most of the country, home buyers are in no hurry in Charlotte. We measure relative demand levels with our Market Action Index. When this index drops below 30, we call it (ever optimistic) a "Buyer's Market". The lower this index goes, the lower the current levels of demand and the more likely you are to see home prices decline in the near future. I'm afraid on this point, our Charlotte area towns aren't faring any better than most of the country.

Market Action Index tracks demand for homes relative to the inventory (current amount of homes for sale). Below 30 is what we call a "Buyer's Market". All three are, ahem, Buyer's Markets.

As we mentioned with Austin, Texas the other day, some markets haven't yet been hit by the big hammer. If we escape a painful recession, maybe home values in these markets don't collapse. Unfortunately there's nothing in the early numbers that indicate home prices will climb significantly from here in the near term.