As we enter the mid-summer season, it is worth noting that the two-year surge in home selling prices across the Charlotte area is slowing. For some time, double-digit price increases were the norm. After that, strong single-digit gains became common. Now, selling prices demonstrate little movement from one year ago.
According to Trulia, the median selling price for Charlotte homes was $203,250 for the three-month period ending June 15. Although this figure is 8.7 percent higher than that of the previous quarter, it represents a year-over-year decline of 0.9 percent. However, the median selling price for three-bedroom residences was 2.9 percent higher than one year ago. Average selling prices for one-bedroom, two-bedroom and four-bedroom are all lower than one year ago. In fact, Trulia’s figures show a decline of more than eight percent, year-over-year.
Relatively Healthy Market
Zillow maintains statistics that measure the overall health of the Charlotte market. The number of properties with delinquent mortgages and the number of single-family homes with negative equity are consistent with national averages. In fact, the 6.0 percent mortgage delinquency rate is identical to the national rate. Nationwide, 15.4 percent of homes are underwater. In Charlotte, 15.8 percent of residences have negative equity.
Inventory Still Weak
Given the shortage of Charlotte-area inventory over the past year, trends in the number of listings are worth a closer look. Charlotte listings peaked at 2,515 during the week ending June 3. The number of listings then declined to 2,438 two weeks later.
Mortgage Rates Up Slightly
Mortgage rates have demonstrated an upward trend in recent months. At the end of June, Bankrate.com reported a 4.19 percent average rate on a traditional 30-year, fixed-rate mortgage. Sixty days ago, the national average was 3.86 percent. This increase of approximately one-third of a point does increase mortgage payments, but not to the degree that buying patterns are demonstrably altered.
Strong Employment Picture
Charlotte’s relatively low unemployment rate adds stability to the residential real estate market. According to data available at ycharts.com, updated on July 1, the May unemployment rate stood at 5.1 percent, up slightly from 4.5 percent in April. Charlotte’s rate remains lower than that of the state and the nation as a whole. In general, strong employment exerts slight upward pressure on selling prices and rental rates.
Overall, key indicators suggest a Charlotte real estate market that is achieving a degree of equilibrium. Prices are now stable rather than steadily increasing. Also, as mortgage rates reach the low 4s, buyers are less likely to bid up prices. On the other hand, a continued inventory shortage tends to increase prices paid for desirable properties. Strong employment also exerts some slight upward pressure. It all adds up to a summer of fairly stable selling prices.