Don’t expect a home price collapse in Charlotte, experts say
CHARLOTTE, N.C. (AXIOS) - Home prices may be due for a “collapse” in other parts of the country, but not in Charlotte, real estate experts tell Axios.
What’s happening: Instead, look for price increases to slow down a bit, and for the market to stabilize, says Daniel Cottingham, CEO and broker in charge at Cottingham Chalk.
- “The (price) growth we’ve seen is not sustainable. Slowing down is frankly a good thing,” Cottingham tells Axios.
Why it matters: Charlotte’s residential real estate market has been running white-hot over the last few years. Sellers would receive offers within hours of listing their homes, and buyers would forgo important steps in the home-buying process such as inspections in order to make their bid more appealing.
- The area is due for some kind of stabilization, but Charlotte’s market won’t see dramatic price declines that other markets may see.
Zoom out: Nationwide, existing home sales have fallen for nine straight months, as Axios’ Matt Phillips reported. Pantheon Macroeconomics estimates that existing home prices in the U.S. will keep falling, ultimately dropping by about 20% from their June peak of around $414,000.
Yes, but: The fundamentals in Charlotte are strong, meaning job growth continues to be robust, people continue to move here and the cost of living is relatively low, Cottingham adds.
By the numbers: Data show that Charlotte home sales have slowed, as sellers are presumably wary because of high mortgage rates. The 30-year fixed mortgage rate is now just under 6.5%.
- Pending sales, which gauge buyer demand, declined 33.9% year-over-year locally in October, according to the latest data from Canopy MLS.
- Homes are sitting on the market longer here, too. The average number of days on the market was 27 in October, up from 17 last year.
- But home prices continue to edge up. The median sale price in the Charlotte area in October was $379,450, up 13.3% year over year.
Looking ahead, market conditions in Charlotte should shift in favor of buyers, says Vicky Mitchener, owner of Dickens Mitchener and Associates.
This means buyers can be choosier. They may no longer have to put in offers for more than 100% of a home’s asking price, and they may not have to entice their offers with perks like waived inspections and all-cash deals.
Charlotte’s challenge moving forward, Mitchener says, is inventory. We simply don’t have enough homes to meet demand. (That’s for a number of reasons, including construction, labor and land costs).
- “We only have 1.6 months of inventory. A stable market is six months,” Mitchener says. “For us the biggest issue still is we don’t have the inventory.”
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