What happens when there are more buyers searching for homes to buy than there are homes to sell?
As the infographic below shows, with buyer demand exceeding housing supply in many parts of the country, the result is that homes sales actually slow down--even in a high demand market.
At the end of the day, real estate is all about supply and demand. So when supply begins to dry up, the next thing to expect (besides a slow down in sales) is continued increases in home prices.
How does the Charlotte, North Carolina metro market compare with national statistics?
Inventory of homes available for sale in Charlotte area as of April was 3.9 months versus the national statistic of 5.3%. Charlotte's housing inventory was down 22.4% in April 2015. In much of the Charlotte metro area, there is no pretense of our housing market being a balanced one. It's very much a seller's market right now.
Fortunately, Cherloote metro area's closed sales in April 2015 were up month-over-month by 6% despite the declining inventory. And on a year-to-year basis, closed sales were up 15% as of April 2015. However, with decreasing inventory, it's not hard to imagine the day coming in Charlotte when home sales might decrease, not because of buyer reluctance or lack of them, but because of lack of inventory.
The percent of distressed property sales in the Charlotte metro area in April 5.4% of total sales--about half that of the national average of 10%.
- Median price of homes sold in the Charlotte metro area was up 8.6%, comparing quite favorably to the 8.9% nationally.
The "take-way" for the serious home buyer in the Charlotte metro area?
- Buyers will increasingly see fewer options of homes to buy.
- Buyers will need to expect home prices to continue to increase and not expect to negotiate much.
- Buyers will need to make decisions about home purchases more quickly.
- Buyers must expect to face multiple offer situations in high demand neighborhoods.
- Buyers will need to identify in advance what compromises they are prepared to make in order to secure a home in a desired neighborhood.