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2011 Copyright: Cox Residential, LLC. All Rights Reserved.
Charlotte Real EstateA Factual Overview in a Time of Uncertainty
By: Eric J Cox, Realtor®Cox Residential
1
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 2
About Eric J Cox:US Marine Corps combat veteran and author, Eric J Cox understands what it takes to accomplish missions (goals). Cox was nominated for the Realtor Rookie of the Year award following his inaugural year and has since risen to the top 1% of brokers in the Charlotte and surrounding areas with over $6MM in closed sales in last year's "down" market alone. Cox branched out in Feb of '11 and launched Cox Residential.
Knowledge, experience and work ethic aside, Cox attributes his success to his genuine ability to Listen and Understand his clients.
Honors & Credentials Licensed in NC Top Producer National Association of Realtors (NAR) North Carolina Association of Realtors (NCAR) Charlotte Regional Realtor Association (CRRA) Charlotte Multiple Listing Service (CMLS) 2010 Government Affairs Committee (CRRA) CRRA Vane Mingle Rookie of the Year Nominee Charlotte Style Magazine Top 25 Most Stylish People in Charlotte (emphasis on career success)
Community Involvement• Our Forgotten Warriors – Chairman • Soldier’s Angels (volunteer)• Operation Homefront (volunteer)• Honor Them Foundation (member)• Operation PTSD (member)• Veterans Help Network (member)• Iraq & Afghanistan Veterans of America (member)• CombatVets.org (member)• USA Cares (member)• Home Sweet Home Campaign (member)
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 3
Seasonal Home Sales Cycle
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar0
2
4
6
8
10
12
Series 1
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 4
3 Types of Markets Buyers Market
More than 7 Months of Inventory Sellers Market
Less than 5 Months of Inventory Equilibrium
Between 5 – 7 Months of Inventory
Months of Inventory Supply is defined as the total number of homes for sale in an area divided by the number of homes sold per month in that area.
Market Transitions:
National transitions occur slowly due to multiple markets and respective local economic conditions
Local market transitions occur very quickly
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 5
Mecklenburg County Housing Inventory
Q3 '06Q4 '06Q1 '07Q2 '07Q3 '07Q4 '07Q1 '08Q2 '08Q3 '08Q4 '08Q1 '09Q2 '09Q3 '09Q4 '09Q1 '10Q2 '10Q3 '10Q4 '101.0
3.0
5.0
7.0
9.0
11.0
13.0
15.0
17.0
19.0
MSI Trend
Equilibrium: Transition only lasted 9 months
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 6
Pricing : Up Market vs. Down Market
Eventually time will correct high pricing and make agents appear smart when
success is practically inevitable.
Seller ends up chasing the market down when the home should have been
priced properly from the beginning.
Time on Market
Aver
age
Hom
e Pr
ice
Price Seller Wants
When They Get It
Time on MarketAv
erag
e Ho
me
Price
Price Correction
Price Correction
They Never Get It
Price Seller Wants
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 7
The Cost of Overpricing:
Market interest is highest within the first 3 weeks on market. In a stable market, fair market value is stable.
The salable price has to do with the psychology of buyer interest vs. elapsed time on market.
In a declining market, these characteristics are amplified. Additionally, homes that take price
reductions take 3 times longer to sell than homes priced properly from the beginning.
Time on Market
Fair Market Value
Initial List Price
Time on Market
Market Interest
Salable Price
Stable Market
Fair Market Value
Initial List Price
Market Interest
Salable Price
Declining Market
COST of
overpricing
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 8
Pricing Into the Market:
In our buyers’ market, only a small percentage of homes - those in great condition priced below
the comps are IN the market.
In a sellers’ market, only a small percentage of homes - those in the worst condition priced
above the comps are OUT of the market.
Buyers’ Market Sellers’ Market
In the market
Out of the marketOut of the market
In the market
Condition vs. Comps
Price
vs.
Com
ps
Condition vs. Comps
Price
vs.
Com
psPoor PoorGreat Great
Belo
w
Belo
w
Abov
e
Abov
e
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 9
The Pond: Current Housing Market
12% of InventorySell and Exit the
Pond
24% of Inventory
64% of Inventory
FLOWBest Value
Shown & Offers Made
SHOWShown but No Offers
Almost always due to condition but may be slightly overpriced.
STAGNANT MASSNot Being Shown
Simply overpriced.
New Listings Enter the Pond
No Man’s Land
OUT of the Market
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 10
Mecklenburg County Days on Market
Q3 '06
Q4 '06
Q1 '07
Q2 '07
Q3 '07
Q4 '07
Q1 '08
Q2 '08
Q3 '08
Q4 '08
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
50
60
70
80
90
100
110
DOM Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 11
CMLS Entire Area List-to-Close
100110120130140150160170
Sep-06; 113
Jan-11; 159.7
List To Close Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 12
CMLS Active vs. Sold $150,000 & Under
Aug-07
Nov-07Feb
-08
May-08
Aug-08
Nov-08Feb
-09
May-09
Aug-09
Nov-09Feb
-10
May-10
Aug-10
Nov-10Feb
-110
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Active
$150,000 & Under TrendAu
g-07Nov-
07Feb
-08May
-08Au
g-08Nov-
08Feb
-09May
-09Au
g-09Nov-
09Feb
-10May
-10Au
g-10Nov-
10Feb
-11500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
Sold
$150,000 & Under Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 13
CMLS Active vs. Sold $150,001-$250,000
Aug-07Oct-
07Dec-
07Feb
-08
Apr-08Jun-08
Aug-08Oct-
08Dec-
08Feb
-09
Apr-09Jun-09
Aug-09Oct-
09Dec-
09Feb
-10
Apr-10Jun-10
Aug-10Oct-
10Dec-
10Feb
-11200
400
600
800
1,000
1,200
1,400
Sold
$150,001 - $250,000 Trend
Aug-0
7Nov-
07Feb
-08May-
08Au
g-08Nov-
08Feb
-09May-
09Au
g-09Nov-
09Feb
-10May-
10Au
g-10Nov-
10Feb
-112,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Active
$150,001 - $250,000 Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 14
CMLS Active vs. Sold $250,001-$500,000
Aug-0
7Nov-
07Feb
-08May
-08Au
g-08Nov-
08Feb
-09May
-09Au
g-09Nov-
09Feb
-10May
-10Au
g-10Nov-
10Feb
-111,500
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
Active
$250,001 - $500,000 Trend
Aug-0
7Nov-
07Feb
-08May
-08Au
g-08Nov-
08Feb
-09May
-09Au
g-09Nov-
09Feb
-10May
-10Au
g-10Nov-
10Feb
-11100
200
300
400
500
600
700
800
900
Sold
$250,001 - $500,000 Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 15
CMLS Active vs. Sold $500,000 +
Aug-0
7Nov-
07Feb
-08May-
08Au
g-08Nov-
08Feb
-09May-
09Au
g-09Nov-
09Feb
-10May-
10Au
g-10Nov-
10Feb
-110
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000Active
$500,001 + Trend
Aug-0
7Nov-
07Feb
-08May
-08Au
g-08Nov-
08Feb
-09May
-09Au
g-09Nov-
09Feb
-10May
-10Au
g-10Nov-
10Feb
-110
50
100
150
200
250
300
Sold
$500,001 + Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 16
Timing the Market
Safe Zone
Lucky Zone
Unlucky Zone
Market Transition Point of Realization
Hom
e Pr
ices
TimeMarkets are defined by past performance - no one can time a market. By the time a market is realized to have changed direction, it has already past bottom or top for some time.
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 17
CMLS Total Sales Volume vs. Avg Sale Price
2003 2004 2005 2006 2007 2008 2009 2010$2,000,000,000$3,000,000,000$4,000,000,000$5,000,000,000$6,000,000,000$7,000,000,000$8,000,000,000$9,000,000,000
$10,000,000,000$11,000,000,000
Total Sales Volume
Total Sales Volume Trend
2003 2004 2005 2006 2007 2008 2009 2010$150,000 $160,000 $170,000 $180,000 $190,000 $200,000 $210,000 $220,000 $230,000 $240,000
Avg. Sales Price (Year)
Avg. Sales Price (Year) Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 18
Mecklenburg County Average Sale Price
Q3 '06
Q4 '06
Q1 '07
Q2 '07
Q3 '07
Q4 '07
Q1 '08
Q2 '08
Q3 '08
Q4 '08
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
170000
190000
210000
230000
250000
270000
290000
310000
265400
285000
252300
231000
Q3 '10; 262500
Avg Price Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 19
CMLS Average Monthly House Payment
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10$850.00
$950.00
$1,050.00
$1,150.00
$1,250.00
$1,350.00
$1,450.00
$1,550.00 Jun-07; $1,515.88
Feb-11; $912.93
Avg Monthly Payment Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 20
Opportunity of Our Market: Trade Up Sarah pays $180,000 for her home in 2007 Today her home is worth $153,000 (15% less) After selling & paying closing costs she gets $143,500 Her mortgage on $130,000 at 6.75% is $843/mo She nets $ 13,500 Due to real estate losses, she writes off $ 36,500 in taxes
At 4.95% interest, payment remains at $843/mo
Purchase price is $166,000 Down payment is $8,300 Cash leftover is $5,200 Assuming new house was purchased 15%
less than it was worth at the peak, new home is worth $196,000
Assuming new house was purchased as a distressed sale 30% less, new home is worth $238,000
Potential equity = $80,000
5% down payment is $13,500 Purchase price is $270,000 At 4.95% interest, payment increases
to $1441/mo Assuming new house was purchased
15% less than it was worth at the peak, new home is worth $318,000
Assuming new house was purchased as a distressed sale 30% less, new home is worth $386,000
Potential equity = $129,500
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 21
30-Year Fixed Mortgage Rate
Jul-06Sep
-06Nov
-06Jan
-07Mar-
07May
-07Jul-07Sep
-07Nov
-07Jan
-08Mar-
08May
-08Jul-08Sep
-08Nov
-08Jan
-09Mar-
09May
-09Jul-09Sep
-09Nov
-09Jan
-10Mar-
10May
-10Jul-10Sep
-10Nov
-10Jan
-11Mar-
11May
-11Jul-11Sep
-11Nov
-114.00%
4.50%
5.00%
5.50%
6.00%
6.50%
7.00%
Rate Trend
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 22
Hazard of Our Market: Affordability
Current Market: +.5% Interest -.5% price
+1% Interest = Price
Home Price = $200,000 Home Price = $190,000 Home Price = $200,000Interest Rate = 5% Interest Rate = 5.5% Interest Rate = 6%Monthly Payment $1020 Monthly Payment
$1025Monthly Payment $1139
Able to Afford $189,092 Able to Afford $179,075
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 23
Home Affordability at $1500/mo
200,000
220,000
240,000
260,000
280,000
300,000
320,000
340,000
360,000
Jul-07, $244,944
Oct-10, $321,729
$287,546
$284,338 $272,044
• Assumes Home Purchase Price at recorded 30-year fixed mortgage rates with 5% down payment• Does not factor Taxes or Insurance
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 24
Financing Programs/ Options: Physician 100%LTV, no PMI
100% up to $650k 95% up to $1 Million 90% over $1 Million
FHA 96.5% LTV, Low Credit Score 580 minimum credit Assumable (allows someone to take over your payments should rates increase)
BB&T CHIP up to 100% LTV, no PMI
FHA 203 Rehab Finance the cost of repairs into the loan Roll 6 months of payments into the loan if uninhabitable at purchase
JUMBO loans up to 90% LTV, no PMI
ARM When used properly, an excellent financial vehicle
Down Payment Assistance Programs
Revitalization loans such as House Charlotte or HomePath
Seller Financing
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 25
The Cost of Owning vs. Renting
Dilwort
h
Myers
Park
Midwoo
d
Birkda
le
Hough
High Sc
hool
Skybro
ok
Balla
ntyne
Highlan
d Cree
k
Old Sto
ne Cros
sing
500
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
PITIRent
Additionally, homeowners are able to deduct:
• mortgage interest• property taxes • mortgage insurance (PMI) • any maintenance or repairs
…from their taxable income.
The average monthly cost of owning vs. renting a typical 3 bed, 2.5 bath home in…
* Owning figures above are not reduced by the annual tax savings
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 26
Testimonials & Recommendations“Eric Cox originally made contact with us on behalf of his buyers who were looking for a waterfront home on Lake Norman with similar features to ours. While our home's layout didn't work for his specific buyers, we were impressed with his innovative and common-sense approach. This prompted us to list our home with Eric and after following his advice, sold our home in just 4 days in this 'down market.' Selling our 2nd home from out of state, we knew we were facing a challenge but Eric put our minds at ease. He gave sound advice when asked, made personal recommendations and lined up contractors for us. More than anything - he answered the phone when we called and responded to our emails within minutes - that made all the difference! We absolutely endorse Eric Cox as great realtor always going above and beyond.
-Robbie & Katrina Skelton
We picked Providence Country Club because it was beautiful and the house is very unique, one floor and in a great neighborhood. Our experience working with Eric Cox was incredibly good. The whole process was very efficient and smooth. Looking for and buying a home can be very stressful, however because of Eric, there was no stress at all. We would not hesitate to recommend him to anyone. Thank you for your knowledge and professionalism Eric!"
-Randie & Claire KopfCharlotte, NC
“I have hired Eric for multiple real estate projects including buying, selling and managing my real estate portfolio. Eric never fails to deliver quick, profitable results that exceed my expectations every time. I have known Eric for nearly a decade and he is one of the most honest and reputable men I know. I have the pleasure of calling Eric my real estate manager and my friend and I will never enter into a real estate transaction without Eric by my side. Please reach out to me at 704.280.3275 for a reference.
-Trip BlazerCharlotte, NC
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 27
Testimonials & Recommendations “We loved the house and the neighborhood! It is close to the interstates and very close to the city. We also felt it was a good deal for us. It was wonderful working with Eric Cox. He was very professional from day one and his response time to any questions or needs we had were prompt. We highly recommend his services to anyone buying or selling their home.” -Joe and Trish Olshefski
Hilton Head, SC
Eric is an extremely dedicated agent. His knowledge, dependability, honesty, integrity and his unbelievable rapid response at all hours gave me confidence…I felt at ease with Eric and I always had a sense of peace that he would do his best on my behalf. Eric is truly a remarkable agent and person…
As an Orthopedic Surgeon, I am in the “service industry” as well and believe I should be there in every way for my patients. Frequently, when I work with others, I feel that service is lacking. I am proud to say that Eric provided excellent service, above and beyond my expectations!
I have recommended him to countless friends.-Kent Ellington, MDCharlotte, NC
“Eric is a real go getter...he has quickly established a large base of business clients and continues to build the foundation for an outstanding career in Real Estate sales. He is service oriented and consistently presents value opportunities to his customers.” -OK HoganElizabeth City, NC
"I have worked with Eric Cox for the past year on three separate investments. Eric has been professional, knowledgeable and most helpful. I am from out of state however when I deal with Eric for my investments I do so with complete confidence and trust."
-Sara I. SandovalSan Diego, CA
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 28
Testimonials & Recommendations“From my first meeting with Eric, it was evident he offers a deft combination of authenticity, professionalism, and
patience. I felt comfortable with him from the start, and as my wife and I expand our real estate investment portfolio, I'll continue to seek him out. During some atypical scenarios that popped up in my deals, Eric was tireless in making extra phone calls on my behalf. Perhaps best of all, he is able to service my real estate investment needs on a wide continuum across the whole region, including distressed properties, new development, predevelopment, and even commercial interests. Eric is one of the hardest working professionals in real estate, and his attentiveness sets him even further apart.”
-John Martin Charlotte, NC
“Dear Eric,
I just wanted to let you know that you have helped me to find and purchase two pre-construction resort properties which I intend to resell and turn a nice little profit. You have given me guidance and advice that has helped to get good properties in places that will be of interest to investors as well as end users. You are also helping me to sell some properties and during the slow down in real estate sells you have brought several interested investors to the table. Thank you for you expertise and help,”
-Gary Lynn Accuspect Investments, LLC Asheville, NC
“Man, what to say about Eric... The guy's on fire. His enthusiasm about what he does is contagious and his drive to know all aspects of the real estate world is impressive…he has worked with buyers looking for a primary residence, investors looking for flips, and buyers wanting multi-million dollar commercial. He has worked aggressively at becoming a land and development expert and continues to push towards being a full resource for all matters real estate. I can't wait to see where his ambition and work ethic take him!”
-Brian TrainumCharlotte, NC
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 29
References & Sources:
Keller, Gary, Dave Jenks, Jay Papasan. Shift: How Real Estate Agents Tackle Tough Times. New York: Relleck Publishing Partners, Ltd. 2009. Print.
National Association of REALTORS®Charlotte Regional REALTOR® AssociationCarolina Multiple Listing ServiceFederal Reserve
2011 Copyright: Cox Residential, LLC. All Rights Reserved. 30
Thank You.
Eric J Cox, Realtor®Principal Broker, BIC(704) [email protected]