As summer transitions into fall, Charlotte’s residential real estate market continues to experience modest price gains, numerous quick sales and a supply/demand ratio that often favors sellers.
In September, new listings were up 3.2 percent, from 4,185 to 4,319. However, closed sales rose at a faster pace, up 6.1 percent year-over-year. In general, inventory is not replenished as homes are sold. As a result, the inventory of homes for sale across the region has declined a significant 21.7 percent from last year at this time. This means that the greater Charlotte area only has a 3.7-month supply of inventory, down a significant 32.8 percent year-over-year.
Modest Price Increases
When buyers lack options, they sometimes bid up prices for choice properties. September statistics from the Carolina Regional Realtor Association support this contention. Sellers are receiving an average of 95.2 percent of the original list price, up from 94.2 percent last year at this time.
Despite the upward pressure that inventory shortages generally exert on selling prices, they are only up 5.6 percent year-over-year. In raw numbers, the median selling price is $10,000 higher than it was in September 2014.
Trulia breaks sales down by the number of bedrooms, and its data suggests that one-bedroom homes are garnering the strongest price gains. For the three-month period ending September 30, the average one-bedroom home is selling for 9.3 percent more than one year ago. By contrast, price changes for two, three and four-bedroom residences have ranged from minus 4.0 percent to plus 2.4 percent.
Mortgage Interest Rates Dip
Many sellers are getting close to what they’ve asked for their properties, and buyers enjoy low mortgage rates. In fact, bankrate.com now reports that mortgage interest rates are at a five-month low, with the average 30-year rate dipping below four percent once again. As recently as July, the benchmark 30-year mortgage interest rate was over 4.1 percent.
Those that have been waiting for a good time to sell their homes may want to take a close look at the sound reasons for acting now. In general, the pace of price increases has cooled, leaving potential sellers with less incentive to wait until the future. With homes on the market an average of only 61 days, many sellers find that their homes sell quickly. This is a convenience that should not be overlooked.
Advantages for Both Buyers and Sellers
At present, sellers enjoy the prospect of relatively quick and convenient sales, largely due to the shortage of homes on the market. In many instances, they get close to their asking prices.
Taking all factors into consideration, prospective buyers should be pleased, except for one caveat. Low interest rates and modest price increases are helpful only if suitable properties are available. A greater supply of inventory would help. Still, each buyer faces the inevitable truth that he/she only needs to locate and purchase that one ideal home.