What causes home prices to go up or down? The answer is really quite simple -- it's all about supply and demand (the most basic of economic principles). The more supply you have without demand, home prices trend downwards. The less supply you have with increasing demand, home prices trend upwards. And when you have demand for homes outstripping supply is when you can see an acceleration in home prices and often bidding wars for homes.
The infographic below perfectly illustrates how supply and demand have impacted home prices in the past several years. With 53 consecutive months of increasing home prices (that's going on five years), it's clear that supplies of homes have been diminishing.
How The Charlotte, North Carolina Region Compares:
- As of July 2016, Charlotte region's months supply of homes was 3.1 months, down 29.5% compared with the same period just one year ago.
- As of July 2016, Charlotte region's inventory of homes was down 23% compared with the same time frame just one year ago.
In the City of Charlotte, itself, the situation is even more "dire:"
- As of July 2016, the City of Charlotte's months supply of homes was down to 2 months, a 33.3% decline from July 2015.
- As of July 2016, the City of Charlotte's inventory of homes was down 30.1% compared with July 2015. And with a decrease in new listings of 2.8% in Charlotte, clearly the upward pressure on home prices will continue.
The resulting impact on Charlotte City's home prices? As of July 2016, average sale price of homes increased by 10.6%, while the median price increased 14.3% as compared with the same time frame just one year ago.
Thinking about buying a home? If you've been seriously thinking about purchasing a home in 2016, NOW may be the time to do it... sales continue to increase in Charlotte, home prices continue to increase in Charlotte, inventory of homes continues to decrease in Charlotte.... it really is all about supply and demand making home prices go up or down. And in Charlotte, at least, supply is not going up. That means home prices will keep going up.
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