Charlotte Region Housing Market Update:
The Charlotte region's housing market continued the strong start of the year through May 2016, with closed and pending sales and home prices up and days on market and inventory levels down. In a market where the average sale price of a home is some $65,000 lower than average list price, it's easy to see how the extreme lack of inventory in the more affordable price ranges is impacting the affordability of Charlotte housing.
May 2016 Closed Sales: up 5.0% versus May 2015 and up 5.7% year-to-date.
May 2016 Pending Sales: up 21.0% versus May 2015 and up 12.7% year-to-date.
May 2016 Average List Price: increased 10.7% to just over $321,000 versus May 2015 and up 9.4% year-to-date to just under $312,000.
May 2016 Average Sale Prices: up 3.2% to just under $258,000 versus May 2015. Median Sale Price was also up 5.0% to $209,900 as compared with May 2015. Year-to-date, average and median sale prices are up 4.2% and 4.3% respectively.
May 2016 Percent of Original List Price Received: up 1.4% to 96.8% compared with May 2015 and up 1.3% year-to-date.
May 2016 Inventory of Homes for Sale: down 25.4% versus May 2015, with new listings increasing by 4.5% in May 2016. New listings on a year-to-date basis are barely up at +1.2%
- May 2016 Months Supply of Homes for Sale: down 31.8% to 3 months. Charlotte region's housing market continues to be very much a seller's market, as it was throughout the first quarter of 2016 and the month of April, with parts of the Charlotte metro area holding steady at barely 2 months of inventory.
The message for Charlotte region home buyers remains what it's been since 2015 and isn't likely to change much in the forseeable future:
- The supply of homes available to buy remains very tight and those that are on the market are selling more quickly with minimal negotiating room. In prime neighborhoods, we see many homes going into contract within days of listing. Home buyers continue to have fewer options to choose from and need to make decisions and offers more quickly than ever. With many homes receiving multiple offers, buyers also need to make "clean" offers with a minimum of contingencies.
- While home prices are not "running away with themselves," they are continuing a steady increase and housing affordability continues to decrease. Buyers must be prepared to pay more for a home and to expect to negotiate less off the asking price. Depending where in the Charlotte metro area buyers are looking, they may not be able to negotiate at all and should expect to see bidding wars that drive the final sale price above asking price.
- For buyers looking for homes priced under $250,000, and especially under $200,000, the selection is exceedingly slim these days.... and no wonder as the average price of homes sold continues to increase month after month.
- With the housing affordability index down by 5.1% in May 2016 alone, and by 4.8% year-to-date, a strong argument can be made that home buyers should be making purchase decisions sooner rather than later as affordability will most likely continue to decrease.
The message for Charlotte region home sellers also remains what it's been since 2015 and doesn't appear poised to change much in the forseeable future:
- When a home is priced right, staged right, and marketed right, it will sell and, on average, should sell in less thanthree months. The days from list to closing in May 2016 were down 9.5% to 105 days (8 days fewer than just the most recent month) as compared with May 2015 and are down 6.5% year-to-date to 116 days.
- Sellers who have been overly aggressive in pricing their homes are not seeing their homes sell quickly, if at all. Pricing is still key even in a strong seller's market.
- With homes selling faster, sellers need to be prepared to move quickly and to have back-up plans for a new residence at the ready.
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