Latest news on the Greater Charlotte Region's real estate market in May 2022...
What you need to know...
What it means for you...
May 2022 home sales in the 16-County Charlotte Region were down year-over-year for a fifth consecutive month. It would appear that buyers are backing away from rising interest rates and home prices since late January, as the housing affordability index also continues to diminish. Pending sales were also down year-over-year for fifth consecutive month. Year-to-date, buyer activity is down 4% compared with the first five months of 2021. However, month-over-month, sales had a slight increase of 1.3% compared with April 2022.
MEDIAN HOME SALE PRICES REACH NEW HIGHS IN MAY 2022
Despite, lower closed and pending sales, both average and median sale prices increased in May 2022, year-over-year, with median sale prices reaching record highs. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. Median sale price has also risen due to the higher price point of homes that are for sale.
A SLOWER PACE OF SALES TO COME?
These trends could be signaling a return to a slower pace of sales, more like what we saw in 2019 prior to the pandemic. Closed sales were down 7.3% year-over-year in May. Pending sales were also down 2.1% year-over-year. While, the drop in sales is a result of buyers backing away from higher interest rates and higher home prices which are impacting affordability, it can also be partially attributed to the low inventory of homes and the continued demand for homes.
HOW MUCH HAS THE REAL COST TO BUY A HOME INCREASED?
The real cost to buy a house has officially spiked over 50% in just 6 months. The housing affordability index continues to drop and impact sales volume. Housing affordability dropped 23.0% year-over-year and 22.8% year-to-date. Month-over-month, the index also dropped.
MARKET OVERVIEW FOR CHARLOTTE REGION: MAY 2022
CHARLOTTE HOME INVENTORY LEVELS KEEP IT A SELLER'S MARKET
Housing inventory remained at very low levels. With just 0.8 months supply of homes (down 11.1% from 0.9 months in May 2021), we continued to see some of the lowest levels of inventory on record in the Charlotte region. Inventory was 12.3% lower than in May 2021. This still presents a unique opportunity for sellers who are ready to list, as new listings continue to receive high visibility, spend less time on market and sell at premium prices. New listings increased by some 620 homes in May 2022 since 2022. This is a positive for home buyers, although it should be pointed out that on a year-to-date basis in May 2022, new listings were down 4.5% versus May 2021.
CHARLOTTE HOMES SOLD IN TWO WEEKS IN MAY
Averaging 14 days on market, homes continued to sell nearly as fast as they were listed. Days on market until sale were down 3 days year-over-year. They were also down 2 days month-over-month. With homes being purchased virtually as quickly as they are listed, current rates of increase in inventory will do little to alleviate the inventory shortage in the short term. Longer term, with buyer activity slowing because of rising rates and prices, should sellers continue to list, inventory will slowly increase and prices should also start to settle to some extent.
SELLERS BENEFITTING FROM INCREASING LIST TO SALE PRICE RATIOS
With a list to sale price ratio of 102.9% in May 2022 (up 1.3% year-over-year), it's clear that home sellers continue to be in command of the market and are receiving well over asking price for their homes. The list to sale price ratio was 0.1% higher in May 2022 than in April 2022. This metric is telling for sellers, as it looks at the ratio of sold price to list price.
OUTLOOK FOR THE SUMMER 2022 HOME SELLING SEASON
Moving forward into the summer selling season, lack of adequate inventory to satisfy buyer demand coupled with increasing interest rates and home price increases reducing affordability are what could hold the market back in terms of sales momentum. While buyers are frustrated by rising interest rates, rising home prices, razor-thin inventory, and inflation, it's not unreasonable to assume that serious buyers continue to actively look for homes. Buyers are motivated to act sooner rather than later because of rising mortgage rates and rising rents which continue to outpace monthly mortgage payments.
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This Charlotte region housing market update for May 2022 is provided by Nina Hollander and Carolinas Realty Partners with Coldwell Banker Realty, Greater Charlotte residential real estate experts serving Charlotte region home buyers and sellers for 20+ years.
If you're considering selling or purchasing a home in the Greater Charlotte region, I'd love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how:
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Read the full article at www.GreatHomesInCharlotte.com
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