Despite the continued surge of relocations to the Charlotte, NC area, sales growth has slowed down. While home sales have cooled nationally, it’s puzzling for a region with such strong job creation and excellent overall economic trends.
The mystery has been solved: it’s all about inventory and the construction of new homes.
In fact, housing starts have been drifting lower, to the point where some fear the possibility of serious housing shortages down the road. And it’s true that new construction and building permit applications continue to lag behind growing demand. But when we factor in the widespread availability of credit coupled with low mortgage rates, not to mention the forecast for robust economic growth for the Charlotte, NC area, it’s easy to make a case for optimism. So despite the concerns over inventory, it’s reasonable to expect homebuilders to rise up to the challenge.
As of June 30, 2017, the inventory of homes for sale came in at 9,967 homes, compared to 12,592 for June, 2016. That’s a drop of 2,625 units, representing a decrease of 20.8%. The number of months supply of homes for sale declined from 3.5 to 2.5, a loss of 28.6%. Further confirmation of the ongoing seller’s market can be seen in the percent of original list price received, which was 96.8% last June, but has now climbed to 97.5%, a gain of .7%. That’s not a huge increase, but we have to remember that that significant statistic has grown steadily for several years. And finally, when we look at the current median sales price of $245,000, we see a $20,000 increase from June, 2016, a hefty rise of 8.9%. Once again, all indicators point to the long-standing seller’s market to persist for the foreseeable future.