Ask a Realtor in the localÂ Charlotte Metro AreaÂ and theyâ€™ll be quick to give you their horror story or two on why a closing fell apart due to a low appraisal and why the parties involved had to make a stomach turning decision to essentially make the closing whole. Iâ€™ve personally been on almost all sides of the transaction as a seller, listing and selling agent.
Itâ€™s important to be aware of changingÂ market dynamics. As of this year Charlotte Real Estate has seen inventory drop from 16.6 months to just under 6 months and still dropping. This preludes the turn into a sellerâ€™s market and rids the market of stale inventory. With low inventory and continued high demand, prices are rising and more buyers are hitting the market especially with corporate relocations like Chiquita. Realtors are compensating with higher listing prices and sticking to prices a bit longer than we normally would for our clients. Thatâ€™s one side. The other side is demand. Iâ€™ve been involved in well over a dozen multiple offer situations in just the past two months where the seller is calling for the highest and best offers from all parties. This can and will drive the eventual sales price over asking. Plus itâ€™s occurring within a wide range of price points whether itâ€™s a $600,000 home in Myers Park, a $300,000 home in Ballantyne or investment properties or homes for first time home buyers under $150,000. No price point is immune.
Whatâ€™s not always happening is appraisers seeing this market change and properly evaluating. If itâ€™s priced to sell and in good condition, that home will sell for 98% of their asking price or more and do so within 30 days. At Helen Adams Realty we pride ourselves in selling our listing inventory at one of the highest sold price to list price ratio in the Charlotte market.
What appraisers are doing is adding contradiction into the market. Iâ€™m personally selling completely renovated houses for as much as 12% less than Mecklenburg County tax values in the price range of 100K-175K. Not by choice but because of low appraisals. This tells me several things; a majority of Mecklenburg County tax values are flawed across the board, buyers donâ€™t determine market value, appraisers are afraid to appraise and hindering market growth and investors wonâ€™t continue to invest in challenged neighborhoods for fear of losing money on inadequate appraisals.
Along with individuals, neighborhoods are losing out too. Weâ€™ve had several neighbors come up to us and thank us for doing what we were doing and happy to see the price at which we listed hoping it will generate value for them as well. But what they donâ€™t see is that as a seller and/or a listing agent, I have to advise my client to cut profits or come to the table with cash to make homes close.
This is just a small snapshot of how this issue is plaguing hundreds of buyers and sellers in our area and affecting market growth. The National Association of Realtors found that 33% of its members polled reported appraisal problems during the month of May. Moe Veissi, president of the Association, saidÂ â€œpoor appraising in markets that are no longer in decline is the single most important valuation obstacle to seeing a real recoveryâ€.Â Good Realtors understand values in the markets and neighborhoods they concentrate on and also keep an eye on valuation and demand. We need to do a better job of ensuring that these appraisers are local, experienced and are provided with every piece of information to support contract price whether they want it or not. If we donâ€™t, weâ€™re doing our clients, and our markets a disservice.Stop back by my blogÂ soon to see a full case scenario that will make your head spin on the state of appraising in east Charlotte.