Charlotte, NC Region Housing Market Update:
The Charlotte region's housing market continued the strong start of the first half of the year through July 2016, with pending sales and home prices up and days on market, new listings and inventory levels down. In a market where the average sale price of a home on a year-to-date basis is almost $51,000 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, which contributed to the lower closed sales volume in July. The story for 2016 is that supply continues to struggle to meet demand, especially in affordable homes. As this continues, higher prices may continue putting a squeeze on the current buyer pool, further impacting closed sales.
July 2016 Closed Sales: down 9.0% versus July 2015 and up 4.4% year-to-date.
July 2016 Pending Sales: up 20.4% versus July 2015 and up 10.9% year-to-date.
July 2016 Average List Price: increased 11.9% to just over $300,000 versus July 2015 and up 9.3% year-to-date to just under $307,000.
July 2016 Average Sale Prices: up 6.5% to just under $270,000 versus July 2015. Median Sale Price was also up 8.5% to $217,000 as compared with July 2015. Year-to-date, average and median sale prices are up 5.3% and 5.7% respectively.
July 2016 Percent of Original List Price Received: up 1.4% to 96.7% compared with July 2015 and up 1.4% year-to-date.
July 2016 Inventory of Homes for Sale: down 23.0% versus July 2015, with new listings decreasing by 3.4% in July 2016. New listings on a year-to-date basis are barely up at +1.7%
- July 2016 Months Supply of Homes for Sale: down 29.5% to 3.1 months. Charlotte region's housing market continues to be very much a seller's market, as it was throughout the first and second quarters of the year, 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 very 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 2.7% in July 2016 alone, and by almost 1% 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 than two months. The days from list to closing in July 2016 were down 15.9% to 58 days as compared with July 2015 and are down 18.1% year-to-date to 68 days. Days on market till sale were down 17.2% to 48 days as compared with July 2015 and down 16.2% to 57 days on a year-to-date basis.
- 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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