What’s measured This indicator targets the rate of residential real estate closings (the number of closings per 1,000 persons) and the average price of such home sales for single-family homes, condominiums and townhomes for selected counties in the Charlotte region in 2005, 2006 and the first quarter of 2007. Data come from the Carolina Multiple Listing Services which covers seven of the region’s counties (Cabarrus, Gaston, Iredell, Lincoln, Mecklenburg, Stanly and Union). Why it’s measured The number of residential closings provides information about the region’s housing market. A high number of closings suggest an active housing market, with buyers and sellers being able to engage in desirable transactions. The average price at closing provides information about the affordability of housing in the region. Indicator results In 2006, there were 22.82 closings per 1,000 residents in the seven counties surveyed, up from 21.31 in 2005. In the first quarter of 2007, there were 4.8 closings per 1,000 residents (using 2006 population numbers because 2007 numbers were unavailable), down from 4.9 in the first quarter of 2006 (using 2005 population numbers for consistency’s sake). The average sales price in 2006 was $224,741, up from $213,505 in 2005. For the first quarter in 2007, the average sales price was $226,429, up from the first quarter 2006 average of $206,856. Among the counties, Mecklenburg had the highest number of closings per 1,000 residents (27.1). Stanly had the lowest number of closings per capita (4.7 per 1,000 residents). Every county but Lincoln experienced an increase in the number of closings from 2005 to 2006, but every county except Gaston, Lincoln and Mecklenburg counties experienced a decline in per capita closings from the first quarter of 2006 to the first quarter of 2007. Regarding sales price, Union County had the highest average ($277,068) and Gaston County had the lowest average ($138,270). Each county studied experienced an increase in average sales price from 2005 to 2006, and from the first quarter of 2006 to the first quarter of 2007. Evaluation Based on the seven counties studied over the designated period, the region’s housing market seemed to be healthy. There was an increase in the number of closings from 2005 to 2006, and sales prices have risen continuously. A comparison of the first quarters of 2006 and 2007 showed an occurrence that should be monitored. Specifically, per capita closings fell from 2006 to 2007, suggesting that the housing market may be cooling off, and that sellers and buyers are less able to arrange mutually beneficial transactions. Even as per capita closings were falling, however, the average price at those closings continued to rise. This suggests that the housing market in the region may not be as susceptible to national downturns in the housing market as other regions in the country. Connections Home sales and the average sales price provide information about how active residential real estate markets are in the region. This, in turn, provides information about housing demand and housing supply. A high number of transactions and rising prices suggest that demand is higher than supply, so the region could expect to see developers build new housing — something that has important consequences for regional public services and natural resources.
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