Latest news on the Greater Charlotte Region's real estate market in April 2022...
What you need to know...
What it means for you...
With median home prices reaching record highs in April 2022, we saw the continuation of the strong housing market in the 16 county greater Charlotte region. Buyer demand continued to exceed pre-pandemic levels straining inventory and sales momentum. Sales were down for a fourth consecutive month as was new listing activity in 2022. A fast-paced market, which it clearly is with homes seeing 16 average days on market, means buyers have less time to make decisions and negotiate, as multiple offers in high-demand areas cause homes to sell and close quickly.
MARKET OVERVIEW FOR CHARLOTTE REGION: APRIL 2022
Pent-up demand from the days of the pandemic continued to fuel much of the buyer demand, as did the years of steady population growth in the Greater Charlotte area. Population growth continues with some 120+ people moving to the Charlotte region each day. Closed sales were down 10.8% year-over-year in April. Sales were down 2% compared with March 2022. Pending sales were also down 4.0% year-over-year. The drop in sales in can be partially attributed to lack of inventory, partially to buyers backing away from higher interest rates and higher home prices which are impacting affordability. The increase in interest rates has essentially increased the carrying cost of a mortgage by one-third.
The housing affordability index continues to drop and impact sales volume. Housing affordability dropped 22.5% year-over-year by 20 points. Month-over-month, the index dropped 12 points. Year-to-date the housing affordability index dropped 22.6% in April by 21 points. Month-over-month the index is down 7 points on a year-to-date basis.
Both average and median sale prices increased in April 2022 year-over-year with median sale prices reaching record highs. 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 prices increased by approximately $20,000 and by approximately $10,000 year-to-date. Month-over-month, median sale prices increased just under $11,000 and $5,000 year-to-date.
Housing inventory remained at very low levels. With just 0.7 months supply of homes (down 12.5% from 0.8 months in April 2021), we continued to see some of the lowest levels of inventory on record in the Charlotte region. With inventory 25.5% lower than in April 2021 and new listings down 1.5% year-over-year, demand remains high relative to supply. This still presents a unique opportunity for sellers who are ready to list, as new listings continue to receive high visibility, spend less time on market and sell at premium prices.
New listings increased 9% by some 700 homes in April 2022 from March 2022, which is a positive for home buyers. However, with homes being purchased virtually as quickly as they are listed, this increase will do little to alleviate the inventory shortage in the short term. Longer term, with buyer activity slowing because of rising rates and prices, assuming home sellers will continue to list, inventory will slowly increase and prices should also start to settle a bit.
Averaging 16 days on market, homes continued to sell nearly as fast as they were listed. Days on market until sale were down 5 days (down 23.8%) year-over-year. They were also down 4 days month-over-month.
With a list to sale price ratio of 102.8% in April 2022 (up 1.8% year-over-year), it's clear that home sellers continue to be in command of the market and are receiving well over asking price for their homes. The list to sale price ration is a full percent higher in April 2022 than it was in March 2022. This metric is telling for sellers, as it looks at the ratio of sold price to list price. Based on April’s average sales price of $449,500 for the Charlotte region, this metric suggests that on average sellers at this price point in April received all of asking price, in this case $449,500 plus an additional $8,991.62 (based on the average sales price in April 2022).
Moving forward toward the spring selling season, lack of adequate inventory to satisfy buyer demand coupled with increasing interest rates and home price increases reducing affordability are what could hold the market back in terms of sales momentum. While buyers are frustrated by rising interest rates, rising home prices, razor-thin inventory, and inflation, it's not unreasonable to assume that serious buyers continue to actively look for homes. Buyers are motivated to act sooner rather than later because of rising mortgage rates and rising rents which continue to outpace monthly mortgage payments.
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MEDIAN HOME SALE PRICE TRENDS IN THE CHARLOTTE REGION
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This Charlotte region housing market update for April 2022 is provided by Nina Hollander and Carolinas Realty Partners with Coldwell Banker Realty, Greater Charlotte residential real estate experts serving Charlotte region home buyers and sellers for 20+ years.
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