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 you’ve purchased a home in the Charlotte region recently, it’s likely you overspent by more than $100,000.
It’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 FAU’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 Charlotte’s home prices. There has been an influx in population along with an inventory shortage.
According to Johnson, these “help support Charlotte’s home prices, making a catastrophic housing price crash unlikely.” This coupled with those moving from bigger cities and metro areas who don’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 it’s their belief that there will be a short recession by 2024 as the Federal Reserve tries to rein in inflation.
It’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
Leave a Reply