Latest news on the Greater Charlotte Region's real estate market in June 2022...
What you need to know...
What it means for you...
June 2022 home sales were down year-over-year for a sixth consecutive month. It would appear that buyers are backing away from rising interest rates and home prices, as the housing affordability index also continues to diminish. Pending sales were also down year-over-year for a sixth consecutive month, showing buyer demand down by about 10%.
Higher home prices coupled with higher interest rates have impacted affordability and cooled buyer demand. As a result home sales and mortgage applications have fallen sharply since last year at the same time.
MEDIAN HOME SALE PRICES REACH NEW HIGHS IN JUNE 2022
Despite, lower closed and pending sales, both average and median listing and sale prices increased in June 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 are signaling a return to a slower pace of sales, more like what we were seeing in 2019 prior to the pandemic. Closed sales were down 13.6% year-over-year in June. Pending sales were also down 12.3% year-over-year. More homes sold in June 2022, however, than in May 2022. 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 continued low inventory of homes, which stood a 1.1 months of inventory in June.
By the same token, when we compare year-to-date sales for the first six months of 2022 to the first six months of 2021, sales are off only 5.3%. With 26,500 sales in the first six months of the year, Charlotte region is on track to see 53,000 sales by end of 2022 based on the current pace of sales. In 2019 Charlotte saw 51,200 home sales.
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 22.6% year-over-year by 19 points. Year-to-date the housing affordability index dropped 23.1% in June by 21 points.
HOUSING MARKET OVERVIEW FOR CHARLOTTE REGION: JUNE 2022
CHARLOTTE HOME INVENTORY LEVELS KEEP IT A SELLER'S MARKET
Housing inventory remained at very low levels. With just 1.1 months supply of homes (up 10.0% from 1.0 months in June 2021), we continued to see some of the lowest levels of inventory on record in the Charlotte region. Inventory increased 12.7% over June 2021. However, Charlotte region had 1,546 more homes for sale in June than it did in May 2022. New listings increased by some 257 homes in June 2022 compared with June 2021. This is a positive for home buyers, although it should be pointed out that on a year-to-date basis in June 2022, new listings were down 2.7% versus June 2021.
CHARLOTTE HOMES SOLD IN TWO WEEKS IN JUNE
Averaging 14 days on market, homes continued to sell quickly. Days on market until sale were flat year-over-year and month-over-month. Year-to-date, average days on market are also flat at 18 days compared with June 2021. With homes being purchased virtually as quickly as they are listed, increases 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 101.9% in June 2022 (down 0.1% year-over-year), it's clear that home sellers continue to be in command of the market and are still receiving over asking price for their homes. This metric is telling for sellers, as it looks at the ratio of sold price to list price and indicates that buyers are still willing to pay a premium for a home.
OUTLOOK FOR THE SUMMER 2022 HOME SELLING SEASON
Moving forward in 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, thin inventory, and inflation, it's not unreasonable to assume that serious buyers continue to actively look for homes. Buyers looking now are more measured about their financial limits. However, buyers are motivated to act sooner rather than later because of rising mortgage rates and rising rents which continue to outpace monthly mortgage payments.
We will also continue to see affordability challenges for first-time buyers, as well as challenges for renters to save for a down payment.
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This Charlotte region housing market update for June 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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