Wednesday, November 9, 2011

Home sales rose last month but prices fell

Charlotte-area home sales jumped year-over-year in October for the fourth straight month but prices are still falling, new data show.

The region's inventory of available distressed homes also dropped significantly. But the statistics don't take into account a reportedly growing amount of "shadow inventory," or foreclosed homes that aren't on the market.

About 1,882 houses, townhouses and condos sold in the Charlotte region last month, up 12.4 percent from October 2010, according to a report released Wednesday from the Charlotte Regional Realtor Association. Closings dropped 4.4 percent from September.

Meanwhile, pending sales - one of the best gauges of current housing activity - rose 14.1 percent in October compared to the year before. Pending contracts are signed contracts that haven't yet closed.

Average sales prices for the month dipped 3.6 percent year-over-year to $194,837. That's down less than one percent from the previous month.

Association President Laurie Knudsen said she was encouraged by the decrease in listing inventory, which suggests the market is working through a glut of available homes. Listings of non-distressed properties fell 10 percent from last year, while the amount of new listings for distressed homes dropped 55 percent.

"They keep talking about shadow inventory," Knudsen said. "But I think part of that shadow inventory has been absorbed in short sales and other sales. We have not suffered as much as the rest of the country. I believe Charlotte is going to remain pretty stable."

Last month, the closely watched S&P/Case-Shiller Home Price Index showed Charlotte was one of the few major markets where home prices in August rose compared to the previous month. Local home prices rose .2 percent from July and fell 3.4 percent from a year earlier.

"People still continue to move here," Knudsen said. "It's still a destination city."