CHARLOTTE REGION FEBRUARY 2023 REAL ESTATE REPORT
WHAT YOU NEED TO KNOW...
WHAT IT MEANS FOR YOU...
February 2023 home sales were down year-over-year for a 14th consecutive month. Pending sales were also down year-over-year for a 14th consecutive month. Sales are happening, but not at the volume we experienced in 2021 and the first half of 2022.
Higher home prices coupled with increasing interest rates have impacted affordability and continue to cool buyer demand. Sales are still occurring... just not at the pace of the last couple of years. Furthermore, the fact that we also see fewer new listings coming on the market indicates Charlotte region will continue to experience inventory challenges, which impact home price appreciation.
Home buyers are frustrated by higher rates, rising home prices, and economic uncertainty. Consequently, home sales and mortgage applications have fallen since last year as buying "power" declines.
Moving forward into the spring selling season, both sellers and buyers continue to be distracted by growing economic concerns and negative housing headlines. The slowdown in home sales that began when mortgage rates increased in 2022, is expected to continue in the coming months, The costs to purchase a home will remain high, challenging affordability at a time when overall budgets continue to be squeezed by inflation. Buying power will remain on the decline with typical mortgage payments 28% higher on average, pricing many buyers out of the market.
HOUSING MARKET OVERVIEW FOR CHARLOTTE REGION:
FEBRUARY 2023 VS FEBRUARY 2022
Closed sales were down 27.8% year-over-year in February. Compared with February 2022, closed sales were down by 1,052 homes. Pending sales were also down 8.3% year-over-year, equal to 347 homes. Month-over-month pending sales increased by 213 pending sales while closed sales increased by 470 homes.
The real cost to buy a house has spiked over 55% since 2022, as the Federal Reserve raised rates seven times in 2022 and already twice in 2023. Mortgage rates topped 6% for the first time since 2008 and went over 7%. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 20.8% year-over-year by 25 points in February 2023.
Despite, fewer closed and pending sales, average list and sale prices increased in February 2023, year-over-year. Home prices are still increasing, but at a slower pace. Median sale price decreased 1.9% year-over-year, but is up 2.4% year-to-date. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. Month-over-month, average sale price increased, while median sale price decreased.
Housing inventory increased for a ninth consecutive month in February 2023. Inventory is up 70.5% compared to the same time last year. In February there were 1,950 more properties for sale than one year ago. By the same token, month-over-month, the number of properties for sale decreased by 1,051.
The months supply of housing is up from 0.6 months to 1.2 months year-over-year. Month-over-month, the months supply of inventory was 0.3 months lower. The 1.2 months supply of homes keeps Charlotte region in "seller territory." However, sellers don't have the same strong position they had in previous years with pricing key to attracting buyers and selling quickly. And although Charlotte Region is still technically a seller's market, the days of receiving well over asking price are behind us and sellers need to reset their expectations.
While housing inventory has increased, new listing activity decreased 18.3% in February 2023 compared with February 2022, with 767 fewer properties listed. Month-over-month, Charlotte region saw 233 more listings come on market.
Averaging 48 days on market, the days on market increased 100% by 24 days year-over-year and by two days month-over-month. Pricing a home correctly is increasingly critical for sellers, as the "right" price brings buyers and fewer days on market.
With a list to sale price ratio of 95.3% in January 2023 (down 5.4% year-over-year, but up 0.8% month-over-month), buyers are carefully scrutinizing listing prices and negotiating on price. Buyers may have more bargaining power now than at any point during the pandemic.
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This Charlotte, NC region housing market update for February 2023 is provided by Nina Hollander and Carolinas Realty Partners, Coldwell Banker, Greater Charlotte residential real estate experts. We've been opening doors for Charlotte area home buyers and sellers for 24+ years. Let us open the door to your next home... you'll be glad you did!
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