Charlotte’s residential real estate market experienced a significant rebound in values over the past half-decade. In fact, Trulia reports that homes are selling, on average, for 22.9 percent more than they did five years ago. However, in 2015, increases in selling prices have slowed considerably, despite a continued inventory shortage and low mortgage interest rates.
Therefore, it should not be too surprising that competition among buyers for select properties is still significant. As a result, sellers are discounting negotiated prices even less than they did one year ago. Five percent discounts are common. On average, homes are selling even faster than they did one year ago.
Overall Selling Prices Down Slightly
A review of recent price trends offers evidence of a slow-down in price appreciation. For the three month period extending from May 15 to August 15, the median selling price has actually decreased 1.9 percent compared to one year ago, according to Trulia. The $204,000 median selling price is also 1.4 percent lower that of the previous three-month period.
Price Strength in One and Two-Bedroom Properties
However, there is still notable strength in the average prices of one and two-bedroom residences. The median selling price of a single-bedroom home is up 10.0 percent, year-over-year. Two-bedroom homes show similar strength, with median selling prices up 7.0 percent. By contrast, the increase for three-bedroom homes is more modest, at 2.9 percent. Meanwhile, the median selling price for four-bedroom residences is actually down 0.1 percent.
Mortgage Rates Trending Lower
When it comes to interest rates, there’s good news for prospective buyers. As the summer unfolds, mortgage interest rates continue to move slightly lower. On July 1, Bankrate.com reported that a 30-year fixed rate mortgage carried an average 4.19 percent rate nationwide. By July 29, that figure had dropped to 4.09 percent, a tenth of a percent lower.
In some neighborhoods, buyers could still benefit from having more properties to select from. Once potential sellers realize that significant price increases in the short-term are less likely, they may be more willing to stop enter the market. This could help provide much-needed inventory to the Charlotte residential real estate market.
Overall, the residential real estate market in Charlotte shows signs of increased stability. When it comes to Charlotte area homes, Zillow projects an overall increase in selling prices of 3.3 percent over the next year. As we get further into summer, many smaller homes are seeing continued price increases, while recent price gains for larger homes are more modest.