Undeniably, spring is a prime time for buying and selling residential real estate in and around Charlotte. So, what does the market look like as we move into late spring and early summer? Compared to one year ago, there are more closed sales to report. In April, year-over-year closings were up 3.1 percent, from 3,503 to 3,613.
Selling Prices Continue to Rise
Prices are up as well. According to the monthly report of the the Charlotte Regional Realtor Association, April’s median selling price is up a significant 6.3 percent year-over-year, to $202,000. In some metro areas like Washington D.C. and Chicago, robust growth over the past two seasons has faded, but not in Charlotte. Undoubtedly, a continuing imbalance between supply and demand is an issue. Many Charlotte-area buyers see the combined benefit of local wage growth and low mortgage interest rates, and many homes sell quickly. In April, the average home was only on the market for 61 days, down a significant 11.6 percent from an already-low number the previous April.
Demand Remains Strong
For some time now, there have not been enough Charlotte-area listings to go around. However, it is encouraging to see inventory strengthen somewhat this Spring. New listings in April 2016 were up 2.6 percent compared to the previous April. However, there’s still a lot of ground to make up. One year ago, there were 14,330 homes for sale. In April of this year, there were only 10,513, which represented a precipitous 26.6 percent decline.
A good measure of demand is the “Percent of Original Price Received.” The figure was already sky high last year, and the number has soared even higher. In April, sellers received an average of 96.3 percent of what they asked for their hones. This figure is even higher than the 95.0 percent figure posted in April 2015.
Mortgage Rates at 3 Year Low
A year ago, there was widespread speculation that historically low mortgage interest rates would finally rise once again. However, buyers continue to see the benchmark 30-year rate well below four-percent. In fact, according to Bankrate’s survey of large lenders on April 6, the average 30-year mortgage interest rate fell to its lowest level in almost three years. When the rate reached 3.75 percent, it reached the lowest level since a 3.74 percent average occurred in May 2013.
With every quarter of sustained growth in Charlotte selling prices, more would-be sellers find that they now have the equity they want to justify listing their properties. The strength of the local economy and very low mortgage interest rates continue to bring buyers into the market. Now, there are signs that inventory is slightly improving, and this should help to address demand as mid-2016 approaches.