A new report released this month by UNC Charlotteâ€s Childress Klein Center for Real Estate (CKCRE), the Charlotte housing market is showing signs of softening but itâ€s becoming difficult to find homes that are priced affordably. 

The “2022 State of Housing in Charlotte” report, says home buyers and renters in the eight-county region are entering a second year of high prices and a lack of affordable housing. According to the report, only 25% of the houses are sold for under $300,000 while 3.8% of the houses sold for half that price. 

“In particular, the prices at the lower end of the distribution have increased much faster than at the higher end, causing significant concerns for housing affordability in the region,” said Yongqiang Chu, CKCRE director and the primary author of the housing report.

The dramatic rise in interest rates in recent months has made housing affordability much worse. The 30-year fixed mortgage interest rates rose from 2.96% in January 2021 to almost 7% in September 2022.

Middle-income housing affordability is becoming a challenge for the region. For a median-priced home, the required income has increased from $89,816 in 2020 to $136,750 in 2022. This is an increase of 73%. The median home price in Charlotte increased from $237,500 in January 2020 to $420,000 in September 2022. That is a 54% increase in 32 months.

The combination of rising interest rates and house prices have made housing unaffordable in the Charlotte region.

“At some point this will become a serious concern for people who want to do business here,” Chu said. He went on to say that there needs to be an increase in supply and offered two solutions to the problem. First, make development easier by regulations and restrictions and then build on green space.

“We should be willing to make those compromises, before Charlotte becomes really unaffordable and people donâ€t want to live here anymore,” Chu said. 

While the market does continue to be tight, there are some signs of softening since this past summer. The median number of days a house is on the market has increased from three days to nine days in the months of May 2022 to September 2022. Prior to the pandemic, the median days on the market was about 20 days. 

The report also found that over the last few years, the average rent has increased by 27% per unit or $320, a swift acceleration in rental prices.

You can click here to see the full report from CKCRE.

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While homebuyers are still navigating record-high prices along with mortgage rates that are up over 5%, recent data released by the Florida Atlantic University (FAU) college of business notes that the average home in Charlotte is selling for about 55% more than its expected amount. If youâ€ve purchased a home in the Charlotte region recently, itâ€s likely you overspent by more than $100,000.

Itâ€s important to note that while the data shows overspending, it is not an analysis of how much homes are appraising for. Those numbers are based on the fair market value and calculated on a case-by-case basis. The fair market value or FMV is the determined price that a property will sell for in an open market. It is agreed upon by the buyer and seller who should both be reasonably knowledgeable about the property. 

Just a few months ago in April, the average expected price of a home in the Queen City was a little under $240,000 according to FAUâ€s study. However, the average house was selling for a little over $370,000– around a 55% difference. A home in the Plaza Midwood area of the city was listed for $585,000 but sold for $740,000. 

By comparison to one year before, in April of 2021, the selling price was only 21.5% higher than the average expected price. 

In a recent interview with Axios, FAU Associate Dean of Graduate Programs in the Finance Department, Ken Johnson, said the home prices in Charlotte have been above the expected pricing trend since March 2018. Johnson has an area of expertise in rental housing, real estate markets, homeownership, and real estate economics. 

“The run-up in prices in the last couple of years is the highest in our data stream which goes back to 1996,” Johnson told Axios. 

This is great news for sellers in Charlotte but homebuyers are still trying to navigate the record-high prices, competitive bidding wars and now mortgage rates are up over 5%. 

There are a couple of factors within the housing market currently that are supporting Charlotteâ€s home prices. There has been an influx in population along with an inventory shortage.

According to Johnson, these “help support Charlotteâ€s home prices, making a catastrophic housing price crash unlikely.” This coupled with those moving from bigger cities and metro areas who donâ€t have to adjust their spending habits for a better lifestyle in Charlotte.

A recent Zillow survey shows prices will continue to grow while demand for homes will stay strong. 60% of experts say the housing market is heating up but not in a bubble. Many of those experts from the survey say itâ€s their belief that there will be a short recession by 2024 as the Federal Reserve tries to rein in inflation. 

Itâ€s clear to see that buyers in the Charlotte metro area are paying a lot for their homes with no indication of slowing down. To see the full data report from FAU, click here

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Here are some things to know if youâ€re looking to buy a home in Charlotte and where to go if youâ€re looking for a deal.

According to realtor.com, Charlotteâ€s real estate market is a sellerâ€s market. This means there are more people looking to buy than there are homes available and the prices of those available homes continue to trend up. The median price of a sold home is $355,000 while the median listing price for those homes are $367,000 according to Realtorâ€s data. That amount breaks down to about $206 per square foot. On average, the homes in the Charlotte area sell after 43 days on the market.

Another real estate site, Zillow, has a slightly lower figure. According to their site, the typical home value of homes in Charlotte are $349,176. This marks a 25.5% increase over the past year on Zillowâ€s “Home Value Index.” By comparison, homes in Raleigh are selling for $402,000, $215,000 in Greensboro while homes in Wilington are selling for $326,000.

For your average potential buyer, these prices may make it difficult to find a home within budget. According to UNC Charlotteâ€s Childress Klein Center for Real Estateâ€s State of Housing report, only 4.4% of houses in the metro area that were sold went for $150,000 or less while 35% of the houses sold for less than $300,000.

Where are buyers to look for more affordable housing? There tends to be more deals available if youâ€re willing to get further away from the heart of the city. Belmont, Gastonia, Mint Hill or even Hickory could be more affordable options.

The most recent data available from December of last year has the average sale price in Uptown Charlotte at $421,433. That is up 33.4% from December the year prior according to the Charlotte Observer. In this same time period, the average price in Gastonia was under $300,000 at $284,351 while Kannapolis was at $268, 193.

Of Charlottes 165 neighborhoods, about 1700 homes are currently for sale according to realtor.com. The most expensive neighborhood, Myers Park has a median listed home price of $1.1M. Elizabeth came in at second with a median list price of $665,000. The most affordable neighborhood, West Sugar Creek, has a median listed home price of $290,000.

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Closing on a home these days is tough, but how tough is it?

The combination of lower interest rates, shrinking inventory and the continued increase in construction costs has squeezed the housing supply. This has resulted in homes being bought up faster and for much more money.

There has also been a pent-up demand for many buyers after spending more than a year inside due to the pandemic while many millennials have entered the market to explore first-time home ownership.

“Itâ€s truly a sellerâ€s market, but the market right now has never been higher,” said James McDuffie, community lending manager for U.S. Bankâ€s Mid-Atlantic region. “Iâ€ve been in the business for quite a number of years now. Iâ€ve seen ups and downs, but right now is definitely a plateau that the market has hit that I donâ€t think weâ€ve ever seen before.”

The biggest hurdle for most buyers in the market is price. Itâ€s hard to pay attention to any other factors when the price of homes in many areas have skyrocketed. The median home sale price in the Charlotte metro area hovered around $260,000 throughout 2019. Those prices rose steadily throughout 2020 and continued to rise into 2021. The median sales price has now surpassed $300,000. Most sellers are getting well above their asking price.

Another obstacle for potential homebuyers is the inventory. With fewer house on the market, there is bigger competition among those buyers to snatch whatâ€s out there. Throughout the pandemic, supply has dwindled steadily. In the Charlotte metro area, there were less than 3,000 homes available for sale in June, a decrease of 45% from just a year ago and an almost 70% decrease from June 2019. It is possible that inventory will bounce back however when considering the recent low of 2,141 available homes in March of this year.

With fewer houses available, the time spent on the market has also shrunk. In June, the average time it took a home to sell was just 12 days. That is three times as fast compared to June of last year.

A good way to measure an areaâ€s housing market is to consider an areaâ€s monthâ€s supply of inventory. Itâ€s to measure how fast available homes would sell on the market at the current pace. In the Charlotte area, the number of available homes dipped below one monthâ€s supply for the first time in November of last year. In June, the supply was just 18 days.

A market is considered balanced when there is around six months†worth of supply.

The post Charlotte Seeing a Red-Hot Market appeared first on Charlotte Real Estate.

“We submitted an offer and within a day they had come to another determination,” Broyles said, “we got outbid.”

They arenâ€t alone. The housing market in Charlotte is hot right now. Many people are finding themselves in bidding wars to lock down the properties they like then outbid with an amount well over selling price by those cash bidders or buyers willing to buy site unseen.

Saying itâ€s a sellerâ€s market is an understatement. Realtors say Charlotteâ€s housing market is unlike anything theyâ€ve ever seen. Prices are skyrocketing, inventory is low, and demand is only growing.

According to Mecklenburg County officials, 99.2% of sellers are getting their asking price or more within 23 days of being on the market.

“Weâ€ve seen large increases in our housing market throughout the year,” Michael Simmons, the countyâ€s economist said.

Over the next 30 years, some 600,000 people are expected to move here, according to a county estimate, with a majority of those moving towards the state-line. A growing number of those are 20- to 25-year-olds now moving from apartments to homes, according to Simmons.

Charlotte is in the top five for attracting millennials and is also number one in the country for attracting baby boomers. North Carolina as a whole, is attractive to home buyers too as it ranks in the top five of states where people are moving.

For homebuyers this means a critically low level of inventory of affordable homes for sale. Charlotte home prices has gone up 12% in the last year, according to Zillow. First-time home buyers and single buyers are finding themselves priced out of the market with the median list price of a single-family home in Charlotte at $355,000. This is according to Realtor.com.

According to the Home Buying Institute, the Charlotte real estate market will remain extremely competitive throughout the rest of the year with strong demand and limited supply continuing to boost home prices higher.

Charlotte consists of 162 neighborhoods with 2,790 homes for sale according to Realtor.com. Of those neighborhoods, Myers Park is the most expensive. The median listing price there is $1.1 million. McAlpine is the most affordable neighborhood for buying a home with a median list price of $220,000.

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According to a recent Zonda survey, around a quarter of baby boomers plan to retire near their grandchildren, earning them the moniker “baby chasers.” The third annual Zonda Baby Chaser Index examines migration trends, which are vital to understand since they feed housing demand.

For both demographic cohorts, the Zonda Baby Chaser Index considers both long-term migratory patterns and present tendencies. While the index’s most recent migration data reflects tendencies prior to COVID-19, itâ€s thought that the virus†impact could amplify those patterns.

“Iâ€m not surprised to see Charlotte, Austin, and Phoenix top the list as all three are great relocation markets for millennials,” says Tim Sullivan, Zonda’s senior managing principal of advisory, who travels across the country working on new-home projects. “These markets also allow many baby boomers to live a classic retirement consisting of downsizing their home, saving some money, being near their family, and, in some cases, having a better quality of life.”

The Southeast and Southwest, like in previous years, remain the most popular destinations for baby chasers. Many of the top areas have characteristics such as diversified economies, a strong or increasing tech presence, pleasant weather, and reasonably priced new housing. Charlotte, this year’s top metro, meets all of those boxes.

Charlotte is home to a variety of companies, including Bank of America, Truist, Belk, Lowe’s, and Honeywell, to name a few. Furthermore, Charlotte is a magnet for new expansion because of an advantageous tax environment, expanding entertainment offerings, and its geographic proximity to both the mountains and the beaches.

The Queen City is a hot spot for baby chasers because of all the aforementioned reasons plus the diversity of the housing stock” says Shaun McCutcheon, Zondaâ€s vice president of advisory in the Southeast. He notes that Charlotte has a variety of low- and high-end conventional homes, as well as low-end and high-end active adult communities, allowing folks migrating from the Midwest and California to be satisfied with their choices. “There are housing options that range from starter homes in the $200,000s to lakefront properties that can be found for around $1 million, the latter of which would be five times that price in other markets.”

It’s possible the covid-19 pandemic only exaggerated these moving trends. Zondaâ€s top baby chaser markets have gained steam as the work-from-anywhere trend gave people more flexibility in where they live. The main concern going forward will be how builders will keep up with demand given how frequently it shifts and the concerns over rising lumber prices.

The post Charlotte #1 Destination for Millennials and Their Baby Boomer Parents appeared first on Charlotte Real Estate.

The sharp drop in new listings was partly due to severe weather. The severe winter storms across the country limited the market activity. This resulted in newly listed homes further declining by 24.5%. In the 3rd week of February, new listings dropped by 35.2% compared to last year. As conditions got better in the final week of February, they recovered to 26.9%. The severe weather coupled with an already record-low supply is making it increasingly difficult for buyers to find their home at their perfect price point. 

“Last monthâ€s record cold and snowstorms likely caused sellers to hit pause, even if only temporarily,” said Danielle Hale, chief economist at realtor.com. “However, in todayâ€s inventory-starved market, any setback is significant. Unless we see some big improvements in the new listings trends over the coming months buyers can expect stiff competition.”

The hesitancy from sellers resulted in about 207,000 fewer newly listed homes for sale during the first two months of 2021. In order to reach the same average of the past four years, new listings would have to grow by 25% annually in March and April. Something that is unlikely. 

While declines were across the country, the biggest drops in supply were in Oklahoma City, Kansas City, Missouri, and Milwaukee. The only major cities seeing inventory gains were San Jose, San Francisco and Denver. 

Meanwhile in the Charlotte-Concord-Gastonia, N.C.-S.C. area, the housing market saw an 18.5% drop in new listings compared to this time last year. The housing market in Charlotte is still booming however, according to Mecklenburg County officials. 99.2% of sellers are getting their asking price or more within 23 days of being on the market, according to the countyâ€s data.

“We’ve seen large increases in our housing market throughout the year,” said Michael Simmons, the county’s economist.

Realtors say Charlotte’s real estate market is unlike anything they’ve ever seen. The Queen City is one of the hottest real estate markets in the country with 122 people moving here every single day, according to WCNC TV in Charlotte. 

Nationwide, the tight supply has only made sellers more confident in their potential gains. Newly listed homes hit an all-time high asking price of $347,475 in February, according to Redfin. According to realtor.com, the median listing price in Mecklenburg County is $345k.

The post Spring Housing Market Expected to Be Leanest and Most Competitive Ever appeared first on Charlotte Real Estate.

The U.S. housing market has seen a significant rise through the pandemic and Charlotte is certainly not an exception, according to Mecklenburg County officials, who briefed county commissioners about the local real estate market recently during their annual retreat.

“Weâ€ve seen large increases in our housing market throughout the year,” said Michael Simmons, the countyâ€s economist.

According to county data, itâ€s a sellerâ€s market where 99.2% of those sellers are getting their asking price or more within 23 days of being on the market.

Millennials are a driving force behind the sellerâ€s market. These first time homebuyers are interested in taking advantage of record-low mortgage rates. According to Simmons, there is a growing number of 20 to 25-year-olds moving from apartments to homes.

A recent report released by NerdWallet found an estimated 26 million hope to become first-time home buyers within the next five years. The survey also found that 44% of Americans have worked remotely since last March and that’s giving them the confidence to buy in a different location.

Over the next few decades, the Mecklenburg county estimates around 600,000 people will to move to the area. A majority of those are expected to move towards the state-line.

The pandemic temporarily sank the housing market in the state but Realtor.comâ€s Housing Market Recovery Index indicates that the Charlotte metro area has not only managed to recover but is one of the best places to buy a home as well as invest in real estate in 2021.

The Emerging Trends in Real Estate 2021: US and Canada report, ranked Charlotte number five in the top 10 of best places to invest in real estate in 2021. The city is being labeled as a “New Boomtown” as more people continue to migrate to the Queen City during the pandemic.

Charlotte has also been labeled as an “18-hour city.” Urban Land Institute defines “18 hour” cities as a small or medium sized city with above average urban population growth, a low cost of living and a low cost of doing business. The area is known for its diverse lifestyle, a mix of a big city and suburban feel with an influx of workers from other cities.

The 2021 Charlotte housing market is forecast to rise due to strong real estate appreciation, a growing job market and a steady increase in population. Currently the median home listing price is almost $325,000 with a median sold home price of $295,000.

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Charlotteâ€s year-over-year growth in home sales in 2021 is anticipated to be 13.8% with prices forecasted to grow 5.2% over the year. According to realtor.com data, the median home price in Charlotte is currently $368,819.

“This past year, weâ€ve all become more reliant on technology to work, learn, and maintain personal connections. The technology hubs that make this possible are thriving, as are their housing markets,” said Realtor.comâ€s Chief Economist Danielle Hale. “Additionally, the relative stability of government jobs in the past year has driven home prices and sales in several state capitols to the top. Homebuyers, particularly younger first-time buyers, looking in one of these markets should expect rising prices and heavy competition. Meanwhile, sellers will remain in a position of power, but will find themselves on the other side of the bargaining table when buying their next home.”

Realtor.com notes that the top housing markets in its ranking will be driven in 2021 by several factors: millennial homebuyers, relative affordability, strong local economies and markets that are state capitols.

Cities like New York or San Francisco are commonly thought of as the leaders of business and technology, but the high cost of living paired with housing prices per square foot have made it less economical for recent college grads or older millennials looking to raise their families. Living in these cities are starting to make less sense when you consider this year has seen telecommuting becoming the norm.

This is where the Queen City comes in. Charlotte, North Carolina is continuing to establish itself as a rising tech hub with many jobs in technology, education, government and healthcare. Close proximity to colleges like Duke University, North Carolina State University and UNC at Chapel Hill – known as the “Research Triangle” makes Charlotte a logical place to kickstart one’s career. This coupled with a median home price of less than $370,000, makes Charlotte an extremely attractive and affordable place to live.

With all the attention on Charlotte, home prices are on the rise. If predictions are correct home prices will continue to rise over the next year. The average home price is expected to be $387,988 this time next year.

The Top 10 markets for 2021 are:

1. Sacramento, CA
2. San Jose, CA
3. Charlotte, NC
4. Boise, ID
5. Seattle, WA
6. Phoenix, AZ
7. Harrisburg, PA
8. Oxnard, CA
9. Denver, CO
10. Riverside, CA

The post Queen City Ranks Third in Top Housing Markets for 2021 appeared first on Charlotte Real Estate.

There are changes in the works for Brookhill Village. The property has attracted much interest over the years because its apartment rates of less than $500 a month contrast with the new developments that have flooded the South Tryon and South End areas over the last decade. Living conditions at Brookhill have drawn complaints for years with owners calling for major improvements at the location. A Raleigh-based developer, Tom Hendrickson has lead plans to transform it into a mixed-income complex but earlier this year, city officials said they did not recommend public and private funding for the proposal.

Aspen Heights, an Austin-based developer, won approval to build up to 274 apartments in South Charlotte on land owned by The Bethlehem Center near South Tyron Street and Remount road. Bethlehem Center CEO William McDonald said the group plans to sell the land and use the proceeds to help serve those in the area and expand to other parts of the city.

Also approved on Monday was a proposal for 150 rent and income-restricted housing in west Charlotte. The developer is Nashville-based Elmington Capital Group. The affordable units are for those earning between 30% and 80% of the areaâ€s median income. This translates to about $26,200 and $66,800 for a family of four annually according to 2020 figures from HUD. The one-three bedroom units would be in six buildings on the site, near Ashley Road and Joy Street. The property borders the Ashley Park and Westerly Hills neighborhoods. Amenities at the apartments will include a playground, exercise room and a business center.

Charlotte is a popular destination for retirees looking to settle into Low Income-Affordable communities. In the Northlake, Taft-Mills Group, a subsidiary of Greenville, NC-based Taft Family Ventures, plans to build 71 age-restricted housing units on a 4.2 acre site east of W.T. Harris Boulevard, south of Woodland Circle and north of Interstate 485. According to the Charlotte Observer, C.J. Tyree, partner with Taft-Mills Group, told community members that the project would contain one-bedroom and two-bedroom independent living units, and amenities like a fitness center and computer room. It would be restricted to those over 45 years old, with at least one resident in each unit required to be 55 or older.

Other rezonings approved on Monday include:

Up to 138 townhouses on 23.2 acres on Oakdale Road between Miranda Road and Interstate 485. The Phonenix-based company Suncrest Real Estate and Land said the project would include a central green area and a multi-used path.

Up to 366 apartments, 56 townhouses and 10,000 square feet of office and noncommercial uses on a 24.6-acre site in North Charlotte. Georgia real estate firm, Flournoy Development is planning to develop the side on John Adams Road, north of mallard Creek Church Road and east of Interstate 85.

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