The recovery in Charlotte residential real estate values appeared first among one-bedroom and two-bedroom homes. Now, larger homes, like those with four bedrooms, are also seeing higher selling prices.
Prices Still Rising
Data compiled by Trulia suggests strength in the selling prices of Charlotte homes, both large and small. For the quarter ending April 15, overall median selling prices are up a solid 4.5 percent year-over-year. Compared to the previous quarter, the median selling price of $198,500 is up 6.1 percent. Larger homes are selling for higher prices than in early 2014. For example, the 4-bedroom median of $329,500 is up 6.3 percent compared to one year ago. However, even 1-bedroom, single-family residences are up 5.6 percent compared to one year ago.
Inventory Remains Low
To what extent is an inventory shortage driving prices higher? It’s a fair question, given the substantial reduction in residential inventory from April 8 to April 29. In just three weeks, Trulia reports that Charlotte inventory dropped from over 3,000 to less than 2,200. The inventory shortfall is further illustrated by April 2015 data compiled by the Carolina Regional Realtor Association. Compared to one year ago, inventory in the greater Charlotte area is down 22.4 percent. There is only a 3.9-month supply of inventory as of April 2015, a year-over-year decrease of a hefty 33.8 percent.
Tighter inventory results in better prices for many sellers. In fact, sellers are now receiving an average of 94.9 percent of the asking price, a further increase of 1.1 percent compared to April 2014. It is reasonable to surmise that some of the upward pressure on prices is triggered by a lack of selection during the normally bustling spring selling season.
Favorable Mortgage Rates Continue
As of April 30, Bankrate.com reports that 30-year fixed-rate mortgages carried a national average interest rate of 3.86 percent with 0.22 points.That interest rate was seven basis points higher than one week earlier. This modest uptick still leaves average rates below the 3.90+ level seen earlier in 2015. Favorable rates attract relatively more buyers to the Charlotte market, and this adds to the imbalance between buyer demand and available inventory.
Also, the Charlotte employment picture has been strengthening for some time now, and this adds prospective buyers to the market. Furthermore, those that qualify for the best mortgage rates find it an attractive time to upgrade. Others are finding that lending practices are getting somewhat more buyer-friendly.
Too few homes are available to fully satisfy the appetite of current buyers. As a result, many sellers that decide to enter the market during the prime spring and summer selling season should be rewarded with prompt and attractive offers.