“More people are opting to live alone, and rising mortgage-interest rates are forcing would-be homebuyers to keep renting,” said Redfin deputy chief economist Taylor Marr. “These are among the demand-side pressures keeping rents sky-high. While renting has become more expensive, it is now more attractive than buying for many Americans this year as mortgage payments have surpassed rents on many homes. Although we expect rent-price growth to continue to slow in the coming months, it will likely remain high, causing ongoing affordability issues for renters.”

In some cities around the country, rent is up over 30%. Nashville, Seattle, and Cincinnati all saw 30% increases while Austin, Texas saw a whopping 48% increase. According to Redfin, this is the largest increase for any metro area since the data started getting collected in 2019. 

The top 10 metro areas with the fastest-rising rents year over year were Austin at number 1, followed by Nashville, TN; Seattle, WA; Cincinnati, OH and Miami, FL to round out the top 5. Fort Lauderdale, FL; West Palm Beach, FL; New York, NY; Nassau County, NJ and then New Brunswick, NJ finished off the top 10. 

The rent growth in Portland, OR fell below 30% for the first time since the beginning of the year which caused it to drop out of the top 10. Only three of the 50 most populous metro areas saw rents decline in May from the year prior. In Milwaukee, WI, rent fell 10% while Kansas City, MO and Minneapolis, MN saw a decrease of 3%. All three metro areas also saw decline in rent in April too.

Closer to home, the median monthly rent in Charlotte is a little over $1,800 a month in May. That is 8.7% higher than the same time a year before.

An indicator of affordable rent is if someone is able to spend no more than 30% of their income on housing. In order to be able to afford rent in the Queen City, that would mean a person would have to make about $73,000 a year.

The housing market having low inventory and increasing interest rates makes renting less expensive than buying for most. Currently Charlotte has about 81,000 units that are considered affordable. However, according to officials in the city, Charlotte needs an additional 32,000 available units in order to meet the demands.

The post Median U.S. Rent Surpasses $2,000 For First Time appeared first on Charlotte Real Estate.

Before the pandemic, Baby Boomers – those typically classified as people born between 1946 and 1964 – represented 41% of U.S. homeowners. This is according to a special report conducted by the Mortgage Bankers Associationâ€s Research Institute for Housing America. 

As older Americans age out of their homes to move to assisted living facilities or smaller rental apartments and ultimately die, that number is likely to shift over the next few decades. Experts are calling this phenomenon the “Silver Tsunami.” It could lead to an influx of 25% of owner-occupied homes going up for sale by 2040.

There were 4.4 million single-family homes for sale by older Americans in 2019. And thatâ€s not the only interesting statistic the report uncovered that year. It was learned that 2.6 million Americans aged 50+ died. Of those 2.6 million, 1 million were renters while 1.6 million of them owned their homes. And of those 1.6 million homeowners, 500,000 of them transferred the ownership of their home to the surviving spouse. 

As a result, 1.1 million homes were on the market due to “the mortality of older Americans,” the report said.

“Aging and mortality are glacial and largely predictable. Based purely on changing demographics and population growth, there is enough homebuyer demand to meet most of the existing inventory that will come onto the market over the next decade and beyond from older homeowners,” said Gary V. Engelhardt, author of the report and Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University.

As the U.S. demographics change, the housing market is likely to move with it. Experts are forecasting a surplus of approximately 250,000 homes on the market annually through 2032 but no measurable decline in home prices.. This could lead to depressed housing prices and also reduce the need for new construction. 

“RIHAâ€s study skillfully uses multiple data sources to get a detailed picture of Americaâ€s aging population and its effect on the housing market,” said Edward Seiler, Executive Director, Research Institute for Housing America, and MBAâ€s Associate Vice President, Housing Economics. “The impact from Baby Boomers exiting their homes is not insignificant but will happen over a few decades without significantly disrupting the housing market.”

Itâ€s believed that some of the owner-occupied homes will be converted to rental housing while more millennials embrace homeownership. This will help close the gap between supply and demand. Itâ€s likely that new construction will slow as demand for housing will not be as high as it has been in the past few years. 

To see the full report from RIHA, click here.

The post Could Baby Boomer Mortality Rates Change The Housing Market? appeared first on Charlotte Real Estate.

While several studies have been done with varying results due to different contributing factors of income and cost of living data, The study by Rocket Mortgage analyzed data measuring the 2021 movement of single-family house prices, the change in home prices in Q4 of last year from Q3;  the cost of living index which is the amount of money needed for a comfortable lifestyle, with “100” marked as the U.S. national average; the house price index per state which is single-family home transactions with conventional and conforming mortgages in Q4 of 2021; and lastly, the median household income in all 50 states.

Topping the list as the cheapest state to buy a home in 2022 is Tennessee. The cost of living index is at 89 with a median household income of $68,600. Lack of income tax and low property taxes also make it a favorable state to live.

The second cheapest state to buy a home is Illinois. The cost of living is lower than the national average with an index of 94.3 and median household income of $85,000. Rounding out the rest of the top five is Oklahoma, Ohio and Texas.

While most would consider states like New York, California or Hawaii to be the most expensive states to buy a house, only Hawaii even made it in the top 5 of most expensive. Topping the list as the most expensive state to buy a home is Oregon. The rest of the top five are New Mexico, Alaska, Utah and then Hawaii in fifth.

When it comes to buying in this hot market, there are some money-saving moves besides moving to a cheaper state. Mortgage companies suggest favoring a better neighborhood over the house itself when possible. The property will hold more value over time when things slow down. A smaller house in a choice neighborhood could mean long term savings because it will usually come with less taxes, utility costs and upkeep. Buying a cheap house that you can fix up over time could also raise the value of the home.

North Carolina just missed the top 10 of cheapest states to buy a home coming in at number 11.

To see the full list of the report click here

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Following decades of underinvesting and underbuilding, the country faces a shortage of available housing. There is also a worsening affordability crisis and an aging housing stock that is in need of repairs. The scale at which the existing demand-supply gap is huge and will require a national commitment to build more housing of all types.

“The state of America’s housing stock… is dire, with a chronic shortage of affordable and available homes [needed to support] the nation’s population,” the report asserts. “A severe lack of new construction and prolonged underinvestment [have led] to an acute shortage of available housing… to the detriment of the health of the public and the economy. The scale of underbuilding and the existing demand-supply gap is enormous… and will require a major national commitment to build more housing of all types.”

The report suggests a few strategies that would support housing of all sizes across the income spectrum.

First, the article suggests addressing the large shortages in capital and lending for the development of affordable housing. The aim is to expand resources and maximize the potential of existing programs.

Secondly, the report proposes there be incentives for shifting local zoning and regulatory environments to significantly increase the quantity and density of developable residential space. Additionally, NAR furthered their recommendations for zoning and permitting policy reform earlier this year in a separate study. You can find that report here.

The report went on to suggest there be an increase in housing supply by promoting conversions of older or underutilized commercial space. Several communities around the country have redeveloped abandoned malls or shopping centers into mix-use space. Retail space surrounded by condos and public greenery.

Another item on the proposal: expand capacity for residential construction by applying federal resources to help address the challenges construction industries face such as the rising costs of doing construction and labor along with materials shortages.

Lastly, the report recommended addressing the national underbuilding gap by requiring a coordinated approach to planning, funding and developing all forms of infrastructure. The report suggests not only building more housing but to also build better housing that will be more inclusive and well-integrated into local communities. The mechanisms to achieve these goals, according to the report would be to include strengthening and expanding the existing Affirmatively Furthering Fair Housing (AFFH) framework, a comprehensive recognition of the need for authentic community engagement in all types of infrastructure.

You can read the full news release from NAR here.

The post Proposal Lists Ways to Address House Underbuilding in the U.S. appeared first on Charlotte Real Estate.

A big reason longtime searches for a home havenâ€t yet bought a house is mostly thanks to getting outbid. About 40% of potential buyers cited that reason in a new survey from the National Association of Home Builders. A year ago, 44% of people said their biggest reason for not buying was unaffordable prices while only 19% said they were getting outbid.

The rise in remote work due to the pandemic continues to push Americans to relocate to different areas in search for bigger homes with more spacious yards. Pending sales were up 28% year over year in the week ending January 24, but the number of homes for sale was down 36%. Historically low mortgage rates remain with the average 30-year fixed rate coming in at 2.73% in the week ending February 4. This has also been a major motivating factor for buyers.

“The number of homes for sale is at an all-time low and the supply shortage only seems to be getting worse,” said Redfin chief economist Daryl Fairweather. “With so few new listings hitting the market, I expect bidding wars to become more common and involve even more potential buyers as we head into the spring homebuying season. The best thing buyers can do is prepare: Prepare to see homes quickly as soon as they hit the market; prepare by talking to a lender and getting preapproved; and prepare by talking to your agent about how much a home you like is worth so you can go into a bidding war with your strongest offer tactics but know when to back away if the price escalates more than youâ€re willing to pay.”

Homes priced below $200,000 were the least likely to face competition with a bidding-war rate of 42.5%. Homes priced between $200,000 and $300,000 had a rate or 48.4% while $300,000 to $400,000 homes had a rate of 52.6%.

The survey found that single-family homes are most likely to face competition. The rate of single-family homes having a bidding war was 58.7% in January. The highest rate of any property type. Townhouses followed with 54.8% with condos coming in at a rate or 44.6%. Single-family homes have been especially popular in the past year due to the pandemic and surge in remote work. Homebuyers are prioritizing space for in-home offices and schoolwork.

The competitive bidding across the nation is strongest in Salt Lake City, where 9 out of 10 offers faced competition. Thatâ€s according to Redfinâ€s survey of 24 major markets. Other cities facing fierce competition are San Diego (78.9%), the Bay Area (77.1%), Denver (73.9%), and Seattle (73.8%). Charlotte was not included in the survey, but Raleigh, NC came in at number 12 with 58.8%.

The post Home listings Fall to Record Low Causing Bidding Wars appeared first on Charlotte Real Estate.

NARâ€s Pending Home Sales Index measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. The PHSI fell 2.2% to 130.0 in September. An index of 100 is equal to the level of contract activity in 2001. 2001 was the first year examined.

“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” said Lawrence Yun, NAR’s chief economist. “With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

“Additionally, a second-order demand will steadily arise as homeowners who had not considered moving before the pandemic begin to enter the market,” Yun said. “A number of these owners are contemplating moving into larger homes in less densely populated areas in light of new-found work-from-home flexibility.”

The report is the latest in findings that show the housing market cooled in September after showing being strong in the summer. Sales of existing homes fell as well according to NAR. The commerce Department said September sales of newly constructed homes also decreased. Despite the decline, contract signings climbed 20.5% compared to a year ago.

On a month-to-month basis in September, three of the four regional indices tracked by NAR recorded a decrease in contract activity. The Northeast was the only region to record month-over-month gains. The Northeast index grew to 119.4 in September. That is a growth of 2.0%, a 27.7% increase from September 2019. The PHSI in the South fell 3.0% to an index of 150.1 in September which is up 19.6% from September of last year. The index in the west slid 2.6% in September to 116.8 an increase of 19.3% from a year ago. The Midwest saw the index decrease 3.2% to 120.5 last month, up 18.5% when compared to a year ago. All four regions experienced double-digit year-over-year increases.

The next Pending Home Sales Index will be released by The National Association of Realtors on November 30.

The post Pending Home Sales Stumble 2.2% in September appeared first on Charlotte Real Estate.

The report also revealed a growing strain in housing supply. The estimate of new homes for sale fell to 282,000 from 291,000. At the housing marketâ€s current rale of sale, there is a supply of 3.3 months. A 6-month supply is considered the benchmark for a balanced market.

The growing interest in newly-constructed homes largely stems from the lack of existing homes for sale. While existing-home sales have also increased at a fast pace, the inventory of homes left on the market is depleting. Despite this, some sellers have been reluctant to sell according to a report from Realtor.com. The article found that nearly 400,000 fewer homes have been listed for sales since the start of the pandemic compared to last year.

Through the coronavirus pandemic, the U.S. housing market has been one of the few industries to enjoy a V-shaped rebound. In March, the Federal Reserve lowered mortgage rates and spurred a pickup in home sales. The messaging from the central bank that rates would stay low for years, added fuel to the market rally. Some, however, fear that the sharp resurgence is on its last legs.

“While strong demand and lower mortgage rates are supportive of home sales, the slow recovery and weak labor market pose downside risks that we expect will weigh on home sales in the months ahead,” said Nancy Vanden Houten, a researcher at Oxford Economics.

Prices for homes could become a barrier for the real estate market. Low supply in combination with low interest rates and high demand has sent prices upward. Some buyers could eventually find themselves priced out of the market.
There are some other indications that have pointed to a lasting demand in the sector. Home-builder optimism reached an all-time high in September, according the National Association of Home Builders/Wells Fargo Housing Market Index. Throughout the summer, sales of existing homes have trended in line with new-unit purchases.

“Already, more new homes have sold in 2020 than did in all of 2019,” said Danielle Hale, chief economist at Realtor.com. “With the number of existing homes for sale down consistently and considerably from a year ago, new homes are an important segment of opportunity for home shoppers.”

The Census Bureauâ€s full release can be found here.

The post New Home Sales Surge to Highest Level Since 2006 appeared first on Charlotte Real Estate.

Sales in the Charlotte MLS market dropped to 4,514 homes sold in August, a 6 percent drop from the same period a year ago.

CMLS President Jason Gentry cited “limited inventory and waning inventory” for the market’s cooling effect in what is usually a prime selling season in the Charlotte market. There is still buyer activity in the market, however, as pending contracts rose 10 percent for homes priced in the $200,000 to $300,000 range, according to Gentry.

Inventory took the biggest hit with a 14.3 percent decrease from August 2017, with only 10,052 properties for sale in August. That is only 2.4 months of market inventory. The market had a nearly 3 months supply in the same period a year ago.

August sales rose 1.5 percent from July when sales totalled 4,447 homes. Looking at the year-to-date figures, the sales figures are nearly unchanged from a year ago with only a 1 percent drop compared to the first eight months of 2017.

The average sales price of a home in the region increased 8.8 percent to $270,274, while the median sales price rose 8 percent from $225,425 in August 2017.

Continuing the familiar seller’s market trend, the average list price for August increased 7.8 percent to $292,100. Sales prices month to month also continued to climb. The average and median sales prices increased 1.2 percent and 1.5 percent, respectively.

The percent of original list price remained nearly unchanged from August 2017 at 97 percent.

Year-over-year pending sales were up 7.4 percent to 4,771, while pending sales from July dropped 3.6 percent. New listings rose 1.5 percent for year-over-year as well as from July.

Localized stats from around the region:

Mecklenburg County year-over-year sales dropped 12.6 percent to 1,752; average sales price rose 11.5 percent to $323,727; market inventory down 8.6 percent to 3,406, which represents 2 months of market inventory.

City of Charlotte year-over-year sales were down 14.9 percent to 1,349; the average sales price increased 11.2 percent to $309,299; market inventory dropped 6.7 percent to 2,570, which represents 1.9 months supply.

Uptown year-over-year sales increased 5.9 percent to 36 sales in August; the averagesales price rose 22.1 percent to $364,486; market inventory dropped 7.5 percent to 86 listings, which represents 2.8 months supply.

The post Residential sales cool during August heat appeared first on Charlotte Real Estate.

With competition hot and selection limited, sellers are upping asking prices. Average list prices in the Charlotte MLS area jumped 2 percent to $308,305 from July 2017, while days on the market dropped more than 14 percent to 36 days from 42 days for the same period.

Percent of list price received remains unchanged from the year-ago period at 97.2 percent.

Housing inventory in July took a big hit from the year-ago period with only 9,790 homes for sale, a drop of 16.3 percent from 11,701 last year, according to the Charlotte Regional Realtor Association. Supply of market inventory dropped to 2.4 months from 2.9 months a year ago.

The limited market inventory brought sales numbers down, as closed sales dropped 2.8 percent to 4,447. July’s sales fell 5.9 percent from June 2018.

“Without a doubt, limited inventory continues to pressure prices across the region, while also effectively slowing sales during what’s typically our prime selling season. Demand and pending contract activity remain strong, which means buyers must move quickly to purchase the home they want, especially since homes are averaging 36 days on market this summer,” CMLS President Jason Gentry said.

The average sales price increased 5.1 percent to $290,486 from $276,434, and median sales prices increased 2.1 percent to $240,000. Compared to June 2018, however, average and median sales prices dropped 3.9 percent and 3.2 percent, respectively.

Pending sales were up 12.5 percent to 4,947 from the year-ago period but dropped 2.6 percent compared to June 2018.

This vicious cycle of low inventory and a strong sellers market is a double-edged sword for the Charlotte real estate market. Sellers, who might have once eagerly listed their home for sale, may be reluctant to then be on the buying side with so few homes from which to choose.

Here are more specific market stats from around the region:

Mecklenburg County: New listings fell 6.4% to 2,217 for July; sales dropped 4.6% to 1,843 homes sold in July; and the average sales price jumped 6.7% to $317,005. Months supply of inventory is down to 1.9 months, a drop of 13.6% from 2.2 months a year ago.

Union County: New listings dropped 4.2% to 499; closed sales were up 2.6% to 428; and the average sales price jumped 4.4% to $368,361. Months supply of inventory dropped 9.7% to 2.8 months from 3.1 months a year ago.

City of Charlotte: New listings dropped 6.4% to 1,720 homes listed in July; closed sales fell 4% to 1,430; and average sales prices were up 8.3% to $308,713. Inventory supply fell 10% to 1.8 months supply of homes on the market.

The post Going, going gone! Homes moving quickly in Charlotte region appeared first on Charlotte Real Estate.

Median list prices rose to $248,045, an increase of 2.8 percent over June 2017, while on average sales prices rose 5.7 percent to $302,177 across the Charlotte MLS region. Sellers also are getting approximately 97.8 percent of list price, an increase of 0.3 percent since the year-ago period.

These numbers, as reported by the Charlotte Regional Realtor Association in its monthly report, show the impact of low inventory in Charlotte’s strong seller’s market.

While putting sellers at an advantage when it comes to naming their price, low inventory also hurts sales numbers as those same sellers are likely to also be buyers in a market struggling to meet housing demands.

Homes sales dropped almost 12 percent from year-ago figures to 4,724. In comparison to May 2018, however, home sales were up 4.1 percent from 4,530 homes sold.

Inventory numbers in June dropped 17.2 percent since June 2017, with only 9,554 homes for sale in the CarolinaMLS region. That equates to approximately 2.3 months of market inventory for the region. During the same period in 2017, the Charlotte region had 11,537 properties for sale, equating to 2.9 months of inventory.

“Even though the Charlotte region is wedged into a solid seller’s market, incredibly low supply coupled with higher prices and rising mortgage rates are presenting challenges to buyers,” according to CRRA and CarolinaMLS President Jason Gentry.

Buyers unable to meet rising asking prices in the metro area are expanding their home searches to outlying metro suburbs like the Lake Norman/Davidson area, Concord, Lincolnton and York County’s Fort Mill area in South Carolina, where year-over-year sales for June increased.

Closed sales figures for those outlying areas are as follows: Concord +2.1%, Davidson +20.8%, Fort Mill +13.9%, Lake Norman +2.7%, and Lincolnton +23.8%.

Within Mecklenburg County, the median and average sales price rose 4.2 percent ($268,000) and 6.3 percent ($340,085), respectively. Sellers received 98.4% percent of list price, a slight drop from the year-ago period. Market inventory in the county also dropped 14.3% percent to 1.8 months of inventory from 2.1 months in June 2017.

In the City of Charlotte, closed sales fell 17.4 percent to 1,543 from 1,868 in June 2016. Sellers are getting 98.6 percent of list price, an insignificant drop from the same period a year ago. Charlotte’s inventory is even lower, at 1.7 months, a drop of 10.5 percent.

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