Such news bodes well for sellers as competing buyers pursue desirable properties. An increase in mortgage interest rates in November may motivate even more buyers to act now to take advantage of those still-low interest rates.
Median Home Values Exceed Pre-recession Levels
Rebounding residential real estate prices in Charlotte are part of a nationwide phenomena. A CBS News report on the subject highlights the point that home values have now rebounded to surpass pre-recession levels by an average of 0.1 percent. According to calculations by Zillow, the recession-related dive in real estate values has been erased for the most part in the Charlotte area as well.
According to Zillow, median Charlotte home values have rebounded from $130,000 in January 2012 to $175,500 in November 2016. As a result, only 0.1 percent of homes still have negative equity in the Charlotte area, consistent with the nationwide average. Sellers waiting for prices to bounce back may now consider entering the market in greater numbers. This would be welcome news for buyers contending with a continuing inventory shortfall across the Charlotte metropolitan area.
More Bedrooms = Stronger Prices
The CBS News report indicates that nationwide prices are up 5.5 percent year-over-year. Charlotte real estate is performing even better. According to Trulia, median selling prices are up 6.3 percent year-over-year, although price increases are larger for three and four-bedroom homes than for one and two-bedroom residences. For example, Trulia calculates that the median selling price of a three-bedroom home is up 7.0 percent since last year, while the median selling price for a two-bedroom home is actually down 3.6 percent. Two-bedroom homes were among the first to lead a rebounding market in recent years, so it is not surprising that selling prices for larger homes are now catching up.
The average price per square foot offers another indication of how buyers value properties. For the three-month period ending November 23, it stood at $125 per sq/ft in Charlotte, up $4 per sq/ft compared to the same period last year.
Mortgage Rates on the Rise
There’s been a solid uptick in mortgage interest rates in recent weeks. In fact, the 30-year benchmark rate is now flirting with the four percent level for the first time in many months. One month ago the rate stood at 3.34 percent. On November 30, the rate was 3.98 percent according to Bankrate.com. That amounts to $476.26 in monthly principal and interest for every $100,000 borrowed. At present, it is unknown whether mortgage interest rates will continue to climb or whether the best rates will hover at or below four percent.