February brings us Valentine’s Day, and March, St. Patrick’s Day. Can Spring be far behind? January’s occasionally blustery weather has not cooled a hot residential real estate market in the Charlotte area. Median sales prices showed strong single-digit growth in January 2016. The $179,500 median was 7.8 percent higher than one year ago, and Zillow projects continued increases for 2016.
Fewer Homes for Sale
A shortage of homes on the market sometimes spurs competition for desirable properties. The Greater Charlotte residential real estate market could still benefit from more homes for sale. For every four homes on the market last January, there are only three now. Specifically, the Carolina Regional Realtors Association reports that there were 13,607 homes for sale in January 2015. That number dropped to 10,360 in January 2016, a reduction in inventory of 23.9 percent.
Signs of Improving Real Estate Inventory
However, new listings declined year-over-year at a slower rate than closed sales declined, and that may be a sign of a better inventory picture emerging in 2016. Still, there is only a 3.0-month supply of homes on the market, a precipitous decline of 31.8 percent compared to one year ago.
Many sellers that do put their residences up for sale see their properties sell quickly, and for most of what they are asking. Sellers, on average, receive 94.7 percent of their asking price, a figure that is up 1.5 percent from the already high levels of the previous January.
Per-Square-Foot Sales Increases
Not surprisingly, Zillow rates the Charlotte real estate market as “very hot.” The rebounding market is illustrated by price-per-square-foot figures from Zillow. For most of 2012, the median selling price per sq-remained below $80. As of Decmber 31, 2016, Zillow calculates a $106 median sale price per sq-ft. It is clear that many homes are selling for substantially more than similar ones did only a few short years ago.
Mortgage Interest Rates Still Low
Bankrate.com reports that the interest rate on the benchmark 30-year mortgage stood at 3.88 percent on January 28, a decline of six basis points compared to one week earlier. Modest mortgage interest rates continue to favor buyers, although some of the increase in selling prices is undoubtedly driven by these historically low rates.
The strength in real estate prices bodes well for a Spring selling season that lies just around the corner. With continued low interest rates, the prospects for many buyers and sellers look good early in 2016.