CHARLOTTE HOME MARKET TRYING TO BATTLE BACK

CHARLOTTE HOME MARKET TRYING TO BATTLE BACK – Home sales are trying to battle back in the Charlotte market. Sales for the month of October showed a gain, which included single family homes, townhomes and condominiums. We still have a long way to go to get to the levels reached in 2006 and 2007. And to keep things in perspective, it was October, 2008 when home sales took a nosedive, dropping 30.5% from October, 2007. Nevertheless, a gain is a gain and we were up 19.6% for the month of October vs. last year.

Now, some of those sales were foreclosures and some were buyers using the first-time-home-buyer tax credit up to $8,000. The question remains, what will this extension (up to $8,000) for first-time-buyers, and the new tax credit (up to $6,500), for existing homeowners do? It comes at a time when the market usually slows down for the holidays, but it will also run through April 30, 2010, which is normally the busiest time in home sales. A bright point in the home mortgage industry is the story of JP Morgan Chase planning to hire 1,200 mortgage loan officers.

Maybe the tax credits do help home sales temporarily. They might help first-time-buyers make the decision to buy. But, are they just a gimmick? Kind of like a sales gimmick. When I was in retail, the merchandise manager would lay out our ads for the spring season or the fall season. When the sale was successful and we had a good week or good month, it was great. Everyone was happy. We never concerned ourselves with the next year. Next year was next year. That company finally went out of business after about forty years.

Home sales are quite different from running a sale in a retail store. They depend on a strong economy. An economy that is vibrant and growing. That part that is concerning. Home sales don’t just happen. Until the unemployment rate, which is now at 10.2% nationally and 11.6% (September, 2009) for the Charlotte-Gastonia-Concord, NC-SC Metropolitan Statistical Area is down and people feel secure in their jobs (real jobs), I don’t know if (real) home sales will continue to rise even with all the sales gimmicks.

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