Charlotte’s booming real estate market remains strong in early 2017, with homes selling faster and at higher prices than last year. The market should warm up further as summer approaches. Additionally, the repeal of House Bill 2 at the end of March has benefited the area’s appeal, job market and economy. However, declining inventory of homes for sale could soften the market later in the year.
Rising Sales And Prices
For the first three months of 2017, the median sale price for Charlotte-area residences was $210,000, an 11.7 percent increase over the prior year, according to the Charlotte Regional Realtor Association. Sales are strong for all home sizes, and valuations continue to rise. This is reflected in the March 2017 average sales price of $271,351, a 10.4 percent increase over last March.
Zillow’s March 2017 statistics for Charlotte are less robust, but they still reflect a “hot” market. They report a median selling price of $180,400 in March 2017, which represents an 8.0 percent year-over-year increase. They estimate prices will continue to rise, with their current projections estimating an increase in median home values of another 3.2 percent in the next year.
Inventory Shortage Driving Quicker Sales
Charlotte Magazine reported that 42,000 homes sold in the Charlotte-Concord-Gastonia area in 2016. Closed sales so far this year along with pending sales appear to indicate that 2017 is keeping pace. However, inventory shortages caused by a decrease in the growth of new listings could affect the market. For example, the Charlotte Regional Realtor Association’s new listings in February were up a solid 14.5 percent over the prior year. For March, the association reported that the 5,999 new listings were only up 6.2 percent over the 5,648 listings added in March 2016.
Charlotte-vicinity homes are being snapped up faster. In March, the average home was only on the market for 55 days prior to sale, which is a 20.3 percent decrease from the 69 days homes were on the market last year at this time. The overall inventory of homes for sale in and around Charlotte was 9,212 in March, a decline of 20.3 percent from the 11,562 homes on the market last March.
Given the demand in the area’s home-buying market, most shoppers are making bids that are very close to sellers’ asking prices. On average, sellers received 96.9 percent of their original list price in March, a slight increase over the 95.6 percent they received last year.
Impact Of Mortgage Rates
Mortgage rates rose early in the year but have since settled back to last fall’s level. Overall, however, interest rates are higher than they were in 2015 and 2016. Additional interest rate increases by the Federal Reserve this year could reduce the amount of home that buyers can afford to purchase, which could dampen the Charlotte real estate market.
Charlotte real estate has experienced relatively strong growth in the first three months of 2017. However, it appears that growth may be slowing, and the real estate market is facing several strong headwinds as we head into the latter half of the year.