of the Charlotte Real Estate Market

Transcription

1 HELEN ADAMS REALTY of the Charlotte Real Estate Market January 21,

2 Mastery Mastery in one s career and consciousness growth simply requires that we constantly produce results beyond and out of the ordinary. Mastery is a product of consistently going beyond our limits. For most people, it starts with technical excellence in a chosen field and a commitment to that excellence. If you are willing to commit yourself to excellence, to surround yourself with things that represent this and miracles, your life will change. (When we speak of miracles, we speak of events or experiences in the real world which are beyond the ordinary.) It s remarkable how much mediocrity we live with, surrounding ourselves with daily reminders that the average is the acceptable. Our world suffers from terminal normality. Take a moment to assess all the things around you that promote your being average. These are the things that keep you powerless to go beyond a limit you arbitrarily set for yourself. The first step to mastery is the removal of everything in your environment that represents mediocrity, removing those things that are limiting. One way is to surround yourself with friends who ask more of you than you do. Didn t some of your best teachers, coaches, parents, etc.? Another step on the path to mastery is the removal of resentment toward masters. Develop compassion for yourself so that you can be in the presence of masters and grow from the experience. Rather than comparing yourself and resenting people who have mastery, remain open and receptive; let the experience be like the planting of a seed within you that, with nourishment, will grow into your own individual mastery. You see, we are all ordinary. But a master, rather than condemning himself for his ordinariness, will embrace it and use it as a foundation for building the extraordinary. Rather than using it as an excuse for inactivity, he will use it as a vehicle for correcting, which is essential in the process of attaining mastery. You must be able to correct yourself without invalidating or condemning yourself, to accept results and improve upon them. Correct, don t protect. Correction is essential to power and mastery. Stewart Emery 2

3 The new home sales for 2013 approached the seasonal average of 500,000 sales per year. If you drew an imaginary line horizontally across the graph to represent an average number of sales you would see that going back to 1989 the average is around 650,000 new home sales per year that our country needs in order to meet demand. If this is true then our home builders need to increase their production by 30%. Source: Wells Fargo 3

4 If we need 650,000 new homes per year this slide, which shows annual housing starts going back to 2001 was way out of whack. What I see is that our starts at their current pace are on track to meet demand. Source: Wells Fargo 4

5 This slide which shows the relationship and history of the cost of mortgage money to the pace of sales. Over time, and all other things in the country being stable, a 6.5-7% mortgage rate would be a rate that would be in sync with an annual pace of new homes sales at around 650,000 units. If I can see this, then our Fed Chairman does too, and once she feels that all other things in the economy are stable, I think you will see mortgage rates rise to that 6% range. Source: Wells Fargo 5

6 This slide shows that the inventory of existing homes is down. But this is old news really and I think we ll see a gradual increase in inventory over time to 2.5 million homes which has been around our average since Source: Wells Fargo 6

7 This slide shows that existing home sales have just about returned to their normal pace of sales at almost 5.5 million homes per year. Source: Wells Fargo 7

8 This slide is produced by Standard and Poor / Case Shiller. I wanted to include this to show that Charlotte s year over year sales price increase of 8.8% is in the bottom 25% of the top 25 MSA markets in the country. Our market did not overheat as much as many other markets in the country and therefore our rebound will not seem as robust. But slow and steady is the best and I think this bodes well for long term continual and gradual homes price appreciation. 8

9 This slide produced by Mortgage Bankers Association shows the pace of existing home sales increasing at about the same pace as the Wells Fargo forecast, around 4% in 2014 over Unfortunately the Mortgage Banker Association is also in agreement with Wells Fargo that the 30 Year mortgage rate in 2014 will increase almost 21% over 2013 to 4.9%. I wouldn t want to bet against these guys. 9

10 The National Housing outlook chart is published by Wells Fargo Economics Group. They are forecasting new home sales to about reach that normal 650,000 units per year mark in They are forecasting that 5,300 existing single-family homes and condos will be sold in 2014 which is a 4.1% increase over and in 2015 they will estimate that we ll see an increase in existing units of 3.8% over Its important to note that they see 30 year mortgage rates increase to 4.80% in This is a 22% increase over the average rate of 3.94% in I think this rise in rate will slow the increase in the pace of sales that we have seen over the past two 10 years particularly for first time homebuyers.

11 2014 Wells Fargo Forecast (30 Year Mortgage): Mortgage Bankers Forecast (30 Year Mortgage): % 5.05% 4.9% 5.2% This slide shows the 30 year fixed rate mortgage history since 1972 relating to the Wells Fargo and MBA Forecasts. So before you cry The sky is falling, the sky is falling, lets count our blessings that rates have been as low as they ve been for as long as they ve been. Again, draw an imaginary line across the graph at around 6.5-7%. I think that history tells us that 6.5-7% is a pretty good average and that our housing market can handle that rate. So, let me step out on another limb here. I think we are four years into a ten year growth cycle. I ve been a licensed Realtor since 1975 and I remember the recession of 73, and sold homes in the 20% negative amortization of 1982 and experienced the 1991 dip the 2001 dip and the GREAT ONE in While our recovery may not be as robust as previous recoveries, I believe that our economy and our market will continue to grow for another six years. 11

12 This is the comparison of the MBA and Wells Fargo Forecasts. Both Institutions have similar views of the immediate future. 12

13 This slide is created by the Federal Housing Agency and shows a 35 year history of home price appreciation in the Charlotte MSA. 13

14 This slide is prepared by Moody s Analytics. I like it because it shows Charlotte s net population growth relative to net migration and home prices. They are forecasting consistent population growth of 1.2% for the next 4 years and consistent home price appreciation of around 3% over the next 4 years. If you like a stable, steadily growing marketing, we re it! 14

15 Source: CRRA This slide shows that total sales volume in MLS CRRA increased 33% in 2013 and we are forecasting a further sales volume increase of 8% in We are forecasting a 5% increase in the number of sales in 2014 and a 3% increase in the average sales price. 15

16 Source: CRRA and Broker Metrics This slide shows the pace of sales by price range by year going back to We think the price ranges that will experience the most activity are between $120,000 and $350,000 16

17 This slide shows the history of units sold by year. In 2013 CRRA saw an increase in units sold of 25%. Our forecast calls for a 5% increased in the number of sales this year. Source: CRRA 17

18 The average sales price in our Association increased 6% to $222,207 in We believe the average price in our MLS system this year will be $228,873, a 3% increased over Source: CRRA 18

19 This slide shows the average sales price at Helen Adams Realty increased 7% to $325,029 in We believe that our average sales price this year will be $334,780, a 3% increase. Source: CRRA 19

20 This chart shows a history of units sold company-wide. We saw a 29% increase in over 2012 and we are forecasting an 11% increase in the number of sales for Source: CRRA 20

21 Last year our sales volume increased by 38% over This year we expect our sales volume to increase by 15% to 471 million which equals our production in Source: CRRA 21

22 This slide shows a history of the number of our agents companywide. We hope to add about 13 more agents in

23 Source: Broker Metrics These slides show that we have been leaders in earning the highest sold price to list price ratio for the last 3 years. in 2013 our sold price to list price ratio was 95.2%. 23

24 This slide shows a comparison of our performance to CRRA. in 2014 we believe we will increase our volume by 11% versus 5% for the rest of the market. 24

25 This slide was created by the author of the classic business book, Good to Great. The Flywheel Concept is about the idea that in order to go from good to great you have to have the right people on the bus. First they have to be disciplined, then they have to practice disciplined thought, then they need to take disciplined action and then the breakthrough. I think we are ready to breakthrough and that we are on our way to reaching our company goal of becoming leading Trusted Real Estate Advisors in our market by: 1) Being leaders in Real Estate Technology which will permit the most efficient, transparent, free-flow of real estate related information. 2) Being leaders in providing richer, more timely real estate related information. 3) Being masters of the true real estate process, by being informed about all issues affecting real estate. 25