For the tenth consecutive month, existing-home sales have dropped according to the National Association of Realtors. The data for Existing-Home Sales for November was released at the end of December. Decemberâ€s report will be released at the end of January.

All four regions in the U.S. saw month-over-month decreases.  The four regions also recorded year-over-year declines in transactions. Single family homes, townhomes, condominiums and co-ops saw a 7.7% sip in completed homes sales from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year sales dropped by 35.4%. Compared to November of 2021, that is a decrease of 6.33 million.

“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020,” said NAR Chief Economist Lawrence Yun. “The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows.”

The total inventory of houses registered at the end of November was 1.14 million units. This is down 6.6% from the month prior but up 2.7% from a year ago (1.11 million). There is a 3.3-month supply of unsold inventory at the current pace of sales. October saw an identical inventory however itâ€s up from the 2.1 months of inventory from November 2021.

Yun says affordability in 2023 will continue to be a challenge, but there will be less competition for homebuyers as more properties come onto the market. 

“What happened in 2020, 2021, multiple offers, situations like that will not repeat,” Yun said.

In the Charlotte area, there is still a high demand for housing but not enough of it.

“Housing stock is low, basically no matter what, weâ€re not going to change the housing stock shortage for several years,” John Connaughton, professor of financial economics at UNC Charlotte, said. “So, that will keep pressure on prices of single-family homes.”

Realtor.com anticipates a slight decline in homes sales this year by 0.3% however home prices are forecast to increase 5.5%

Meanwhile, the median existing-home price for all housing types across the nation in November was $370,700. This is an increase of 3.5% from November of last year and marks 129 straight months of year-over-year increases. Itâ€s a record for the longest-running streak.

The 30-year fixed-rate mortgage, according to Freddie Mac, averaged 6.31% as of mid-December. That’s down from 6.33% the week prior, however it is up from 3.12% one year ago.

“The market may be thawing since mortgage rates have fallen for five straight weeks,” Yun added. “The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”

Yun believes this year won’t be a buyer’s or seller’s market as it will be more balanced. 

The post 7.7% Drop in Existing-Home Sales in November appeared first on Charlotte Real Estate.

For the first time since July 2020, the index showed the housing market entered neutral territory. All but the Fayetteville, North Carolina market have moved towards favoring buyers over the last year. Last month, 51 markets were a sellers†market while 39 were neutral and 10 favorted buyers.

The shift is most notably due to declining home sales. Only 127,000 homes were sold in 100 of the largest markets in October. This is down from 262,000 a year earlier, a 51.4% decline. The median home price was $388,000 compared to $360,000 last year.

“The housing market has borne the brunt of the Fedâ€s attempt to control inflation,” said Knock co-founder and CEO Sean Black. “At the same time, it has continued to demonstrate its resiliency. Despite moving into neutral territory, sellers still hold the advantage in a majority of the nationâ€s largest metros, and many will continue to favor sellers well into 2023. With interest rates stabilizing in recent weeks and less competition, buyers may begin to re-enter the market over the next few months, which could result in a return to a more normal spring home-buying market.”

In all of the top 10 buyers†markets, the monthâ€s supply surpassed two months except for in Nashville. Las Vegas had a supply of 4.2 months. This is the largest of the 100 housing markets considered in the index. 

Phoenix, the nationâ€s top buyers†market, saw 34 days for a typical listing to sell in October. It was normal for a home to stay on the market for three weeks or more in the top 10 buyers†markets. Columbus, Ohio led the nation with 44 days on the market. 

Over the next 12 months, experts are expecting the housing market to balance. By October 2023, 26 markets are forecast to be buyers†markets compared to 10 in October 2022. 38 markets are expected to remain a sellers†market while 36 will be neutral. 

The national median sales price is predicted to peak at $416,000 in June 2023 before falling to $410,000 in October 2023. This would amount to a 5.6% increase over the past 12 months and follows a typical home-selling season. 

Inventory is expected to grow in all but a few markets. Last month, the supply was 1.9 months and is expected to increase to 3.4 months at this time next year. A balanced market is considered somewhere between four to six months of supply. This will mark the first time the market has approached a supply balance since April of 2019 when the supply crested at 3.7 months. 

You can view the full report here.

The post Could the Housing Market Be Shifting To Favoring Buyers? appeared first on Charlotte Real Estate.

The index analyzes key housing market metrics to measure whether the countryâ€s 100 largest markets favor buyers or sellers. Last month, the index found that home prices in 98 of 100 were below their peak price from last spring. The markets in Providence, Rhode Island and Salisbury, Maryland were the only markets where home prices have remained at their highest since being set earlier this year. 

In 42 of the major housing markets, home prices are expected to fall further than their 2022 highs by this time next year. Of those 42 markets, 15 are in the South, 15 are in the West which is home to some of the most expensive markets in the country. The remaining 12 are in the Midwest and the Northeast. 

Of the 25 markets with the largest projected median sale price decline, 15 peaked well above the national high of $410,000. In San Francisco and San Jose California, the median sale price peaked at $1.3 million and $1.6 million in April 2022, respectively. 

Through the first nine months of 2022, just over 1.8 million homes have traded hands across the largest 100 markets in the nation. This was less than during the same time frame in each of the past four years. While still low, the supply of homes for sale has grown at a steady pace throughout this year as median days on the market increased to 20 in September. This is up by one full week from a year ago.

The average sale-to-list ratio fell to 99% in September. This measures how close homes are selling for their asking price and itâ€s the lowest level since February 2021 and also down from 100.3% in May when the prices for homes peaked nationwide. 

The co-founder and CEO of Knock, Sean Black, said that based on the findings the shift to a more balanced market is still in its early stages. “We expect that this much-needed reset will persist through much of 2023, and although prices will again begin to rebound they likely wonâ€t return to their peaks for the foreseeable future,” he said.

Black went on to say, “While many drivers of the housing market like demographics and record low unemployment have not changed, the combination of higher rates and home prices have put affordability at the worst levels in 30 years with entry-level monthly payments set to be 34% higher in 2022 versus 2021. The good news is that as prices soften and rates stabilize once the Fed is done with its aggressive rate hike campaign—hopefully, after its meeting in November—buyers will be ready to re-enter the market and sellers will retain the majority of the equity gains theyâ€ve seen in the last two years.”

The post Majority Of The Largest Housing Markets Saw Huge Price Decrease In September from 2022 Peaks appeared first on Charlotte Real Estate.

Some homebuyers are backing out of deals as the housing market slows, allowing them more room to negotiate while others are being forced to back out of contracts due to higher mortgage rates that are making the homes no longer affordable. 

“The slowdown in housing-market competition is giving homebuyers room to negotiate, which is one reason more of them are backing out of deals,” said Redfin Deputy Chief Economist Taylor Marr. “Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process.”

Marr went on to say: “Rising mortgage rates are also forcing some buyers to cancel home purchases. If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for a loan.”

The housing market has cooled recently as the Federal Reserve boosted interest rates in an effort to thwart inflation. This has allowed potential homebuyers more freedom to seek concessions from sellers. At the same time, the higher rates also make the home less affordable. Buyers did catch a small break last month when the average 30-year fixed mortgage rate fell to 5.3%. It was the largest one-week drop since 2008.

“When mortgage rates shot up to almost 6% in June, we saw a number of buyers back out of deals,” said Lindsay Garcia, a Redfin agent in Miami. “Some had to bow out because they could no longer get a loan due to the jump in rates. Buyers are also more skittish than usual due to economic uncertainty.”

The metro area with the most pending sales to fall out of contract was Las Vegas, NV at 27.2%. Newark, NJ saw the lowest pending sales to fall out of contract– 2.6%.. In order to be included, the metro area must have had at least 1,000 pending home sales in June 2022. 102 metro areas made the list. Charlotte came in at number 76 on the list with 11.6% of pending sales falling through.

The post Home Sales Seeing Highest Rate of Cancellations Since Start of the Pandemic appeared first on Charlotte Real Estate.

“Itâ€s been incredibly frustrating,” said Erin Damato, in an interview with Bloomberg. “House prices have gone up about $100,000 since weâ€ve been looking.”

Damato and her husband have been seriously hunting for a home in New Jersey since last fall to house their growing family. They are finding that even $1 million isnâ€t enough to meet their needs.

In January, the Damato family big $828,000 for a house that was listed at $750,000 in West Orange which is about 20 miles west of New York City. After placing that big, they learned from their real estate agent that of the more than 20 offers received, theirs wasnâ€t even in the top five.

Itâ€s par for the course to lose out in a bidding war in the red-hot U.S. housing market. Millennials who are starting families, remote workers with location flexibilities and the concerns over rising mortgage rates are only adding fuel to the fire. About 70% of offers were in bidding wards up about 60% from the year before according to Redfin. It made January the most competitive month ever.

The average 30-year fixed mortgage rate was 3.92% in mid February. This is up from a record low 2.65% in early 2021. A $500,000 loan with a 30-year mortgage has a monthly payment of about $2,364. Last yearâ€s low saw those payments at $2,014. Investors expect the Federal Reserve to hike interest rates several times this year to respond to soaring inflation though it doesnâ€t seem to be deterring buyers.

“Rising mortgage rates are intensifying an already-severe shortage of homes for sale because buyers are feeling more urgency to buy while homeowners are feeling less urgency to sell — an imbalance thatâ€s fueling an increase in competition,” said Redfin Chief Economist Daryl Fairweather.

A combination of luck and resourcefulness are allowing some buyers to snatch up a house that was subject to bidding wars. In an interview with Bloomberg, Gianna Gordon said she big $235,000 for a home listed at $215,000 in Atlanta. According to Gordon, the offer was initially rejected in favor of an offer from an investor however when the offer fell through, Gordon was asked if she was still interested.

“You have to do a little bit extra to get the attention of the owner,” she said. Gordon offered to pay $800 in relocation expenses for the seller. She credits that creativity for sealing the deal. According to Redfin, many successful bidders are seeing similar results. Several homebuyers are shortening or waiving the inspection contingency and offering to increase their down payment if the appraisal comes in low.

Spokane, Washington; Sacramento, California; and Seattle have the highest bidding war rates of the 40 metro areas surveyed by Redfin. 83.3% of offers in Spokane saw a bidding war in January while Sacramento and Seattle saw 80.4% and 79.7% respectively.

Raleigh, North Carolina ranked ninth with 75% of offers receiving competition. Charlotte came in at number 17 with 72.5% of competing bids up from 66.7% in January 2021.

The post Record bidding wars show no signs of slowing appeared first on Charlotte Real Estate.

Unfortunately for potential homebuyers, those agreements have shifted. The spring market is predicted to be red-hot but whatâ€s more is that there is a chance it could be the hottest spring homebuying season on record as bidding wars are picking up again.

U.S. home prices soared to an unsustainable 18.8% in 2021. How could the market get any hotter?

In 2020 when the covid-19 pandemic began, many real estate groups predicted the housing market would enter a slump, but the opposite happened. By the summer, the market was booming as first-time millennial buyers rushed in to buy, encouraged by record low mortgage rates and the shift to working from home. The rise in demand from these potential buyers saw inventory shrink. By the following year, inventory dropped 32% from the pre-pandemic levels. Buyers exceeded the number of homes for sale causing bidding wars to begin.

Many industry experts were looking forward to inventory leveling out. It was expected that elderly homeowners who were cautious during the pandemic along with those who were facing financial struggles would list their homes.

The number of homes began to shrink again in November of last year after seeing a brief rise in the fall. Inventory levels in January 2021 were 42% below January 2020 levels. Zillow tracked 327 housing markets and saw 254 have inventory levels down by more than 30%.

Zillow forecasted the yearly rate of home price growth would decrease by 11% by the end of this year. However, in January Zillow revised its prediction and expects the year-over-year rate to peak at 21.6% in May and end the year at 17.3%.

Zillowâ€s prediction is the highest by several points. Other industry leaders like Fannie Mae and Freedie Mac predicted a 7.9% and 7% jump respectively. Meanwhile Realtor.com predicts 2.9%. The Mortgage Bankers Associationâ€s forecast model projects a 2.5% decline by the end of 2022 in the median price of existing homes. Many of the predictions can be taken for what it is, just a prediction as none of these organizations predicted the historic rise in home prices over the past couple of years.

The biggest reason for the less conservative outlook is due to the lower-than-expected inventory levels and a rise in mortgage rates. At the end of 2021, the average 30-year fixed-rate mortgage was 3.11%. Last week saw the 30-year rate up nearly 1% at 3.92%.

The rise in mortgage rates could slow the housing market a bit since it would like price many buyers out of the market. But itâ€s likely the impact will have the opposite effect. Many buyers will rush into the market worried they will miss out on lower rates.

The post What to expect in 2022’s spring market appeared first on Charlotte Real Estate.

The survey found first-time buyers struggled more than repeat buyers. Typically, first-time buyers have smaller down payments because they are less likely to have equity from a previous home which can make their offers seem less competitive. About 67% of first-time buyers submit more than one offer, compared to 54% of repeat buyers.

“Our 2021 survey of buyers found buying a home got more challenging in the past year, but many buyers were ultimately successful in landing a home without taking unnecessary risks,” said Manny Garcia, a Zillow population scientist. “Most buyers continue to get inspections, and sellers appear to prioritize higher offers over waived inspections. Most buyers are ultimately achieving home-ownership by doing their research, making trade-offs and considering a diverse array of options.”

In 2020 and 2021, the average buyer went on three private tours. That is up from just one in previous years. Only 5% skipped a private tour completely. Most home shoppers are still going to at least one open house depside the pandemic.

“So many buyers are hearing horror stories from friends and family about the housing market, so itâ€s important to educate buyers about the local market so they can make the best decision for their family,” says Tom Toole, team lead at Tom Toole Sales Group at RE/MAX Main Line. “Buyers still strongly prefer in-person tours, but virtual tours help people see a home if circumstances donâ€t allow and have helped a number of buyers get a speed advantage in the market. ‘Virtual‘ tools are a great addition to help buyers decide what houses they want to go see in person.”

In-person viewing has remained a priority for home buyers but the desire for 3D and virtual tours are increasing from years past. Survey participants agreed that 3D tours would help them get a better feel for the home than just static pictures. This proves that virtual tools are valued by potential buyers because they make it easier to shop for a home. The share of shoppers who say they are somewhat confident making an offer after only seeing a virtual tour and not an in-person viewing, increased to 58% this year, an increase from 3% last year.

This quarter has shown signs of cooling as home-value appreciation begins to slow and inventory continues to grow each month. Although sellers are still in control, buyers may find more options and less competition which potentially could make a more manageable market.

You can read the full report from Zillow here.

The post New Survey Suggests Real Estate Craze Was Not as Intense as Indicated appeared first on Charlotte Real Estate.

There are several things to consider before you make an offer on a house. First, have you gotten a mortgage preapproval from at least one lender? It is ideal to get preapproved before you start looking at houses because this will allow you to learn how much house you can afford. The preapproval also lets the seller know youâ€re a serious buyer who can close the deal.

Next, consider your market to ensure your offer is competitive. Your real estate agent can provide you a comparative market analysis or you can gather the information from your own research. Submitting an offer that is slightly less that your preapproval amount will allow you some room to negotiate.

Lastly, verify with your lender that the down payment required is in the bank and ready to go. Having the money set aside or assets planned for the funds to buy the home isnâ€t enough to ensure a smooth transaction. Having direct money with immediate access for the earnest deposit, down payment and closing costs is essential. Only the earnest money will be paid right away. It gets transferred into an escrow account after your offer is accepted.

While it may be called an offer letter, it is a legally binding agreement. The offer typically contains the homeâ€s legal address along with a legal property description, details regarding the price and terms, the amount of money and terms concerning the earnest deposit, title, closing costs, the date and time of the offerâ€s expiration, a projected loan closing date, and contingencies.

When you man an offer on the home, you will most likely be required to include a deposit known as earnest money. This is given to a neutral party like an escrow agent or a real estate title company. These entities will hold the money in escrow and can be anywhere between 1% and 3% of the total purchase price. The offer letter will likely include what circumstances you will have to forfeit the money. For example, you decide to back out of the deal without a reason covered in the purchase agreement. However, if the deal goes south due to the seller like refusing to make repairs found in the home inspection, you can get your deposit returned. If the deal goes through, the earnest money is applied to the down payment.

Once the seller reviews your offer they can decide to accept, counter or decline. If the offer is accepted, you will apply for a mortgage and being the process of closing. If the seller offers a counter, you can accept and being the closing process or you can choose to counter again. This will require a new offer letter.

If the seller refuses the offer, itâ€s time to move on to a new home. Good luck!

The post How To Make an Offer on A Home 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.

The National Association of Realtors said its Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contact signing, decreased 1.1% to 128.9 in October. An index of 100 is equal to the level of contract activity in 2001.

Compared to a year ago, pending homes sales increased 20.2%. The two month decline in contracts suggests a slowdown in existing home sales after they increased in October to their highest level since November 2005.

“Pending home transactions saw a small drop off from the prior month but still easily outperformed last year’s numbers for October,” said Lawrence Yun, NAR’s chief economist. “The housing market is still hot, but we may be starting to see rising home prices hurting affordability.”

The U.S. housing market is being driven by record low mortgage rates along with inventory of homes for sale. According to data from mortgage finance agency Freddie Mac, the 30-year fixed mortgage rate is around an average 2.72%

The combination of these factors – scarce housing and low rates – plus very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers, who don’t have the luxury of using housing equity from a sale to use as a down payment,” said Yun. “Work-from-home flexibility has also increased the demand for both primary and secondary homes.”

The coronavirus pandemic has forced many from the city centers into suburbs as more Americans seek accommodations that are more spacious for remote work and virtual schooling. The covid-19 recession, which started in February, has also disproportionately affected lower-wage earners.

“We expect a resurging pandemic, faltering recovery, and depleted inventories to weigh on home sales, particularly if no additional fiscal stimulus is forthcoming,” said Nancy Vanden Houten, lead economist at Oxford Economics in New York.

Strong demands for housing has outpaced supply, boosting prices out of the reach of many first-time home buyers, despite builders ramping up construction. Builders have complained about shortages of land and materials.

“The manufacturing sector is continuing to recover but remains below pre-pandemic levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “The threat now comes from virus outbreaks that could interrupt activity, disrupt supply chains and weigh on demand.”

In October, pending home sales edged up 0.1% in the South. Contracts dropped 5.9% in the Northeast and fell 0.7% in the Midwest. The west saw no change.

The post Unexpected Dip in October U.S. Pending Home Sales appeared first on Charlotte Real Estate.