A final look at the 2014 residential real estate market in the Charlotte area yields a number of encouraging signs. For example, the Charlotte Regional Realtors Association reported that 36,191 homes were sold in the region during the year, and this represented a solid 4.8 percent increase over 2013.
Median Selling Price Up 4.5 Percent
More homes were sold, and those properties fetched higher prices. The 2014 median sales price of $180,000 compared quite favorably to the 2013 figure of $172,300. In fact, the year-over-year increase was 4.5 percent. Sustained price increases also suggest that many existing Charlotte-area homeowners are gaining hundreds of dollars of home equity every month. This is important news for those that had been living with negative equity, and improving equity may translate into more sellers entering the market in 2015.
Boomerang Buyers and Pent-up Demand
Increasing equity will likely help to bring more so-called “boomerang buyers” back into the 2015 Charlotte real estate market. In fact, RealtyTrac, the California-based housing research firm, suggests that many homeowners hit hard by the recession are now moving past the traditional seven-year period normally required to repair credit. RealtyTrac asserts that this class of potential home buyer represents “a massive wave of potential pent-up demand.” Charlotte was on RealtyTrac’s list of U.S. metro areas expected to be most impacted by this positive trend, according to the Charlotte Business Journal.
Inventory Shortage Remains
If demand for Charlotte-area properties increases in 2015, the need for a better supply of inventory will also expand. New listings did rebound a bit in 2014, up 0.6 percent year-over-year. However, a continued shortfall of inventory is illustrated by the fact that the average home was on the market for just 80 days prior to being sold, compared to 96 days in 2013. This represents a significant 16.5 percent decline.
Of course, an inventory shortage is typically good news for a homeowner that wants to see a prompt sale. Sellers have seen healthy demand translate into good selling prices vis-a-vis asking prices. The average seller received 94.1 percent of the asking price in 2014.
Prices in the Year Ahead
So, where will Charlotte-area residential real estate prices head in the coming year? The short answer is “up.” But, by how much? Zillow’s prediction is for a modest 2.1 percent increase in median selling prices in the area. If this prediction turns out to be accurate, it would represent a slowdown in price growth across the area.
However, there are indications that Charlotte’s market might be stronger than that in 2015. A new influx of buyers may compete for inventory that is still below optimal levels. And, 30-year conventional mortgage rates that remain in the fours should sustain buying power of many prospective buyers.