Latest news on the Greater Charlotte Region's real estate market in August 2022...
What you need to know...
What it means for you...
August 2022 home sales were decreased year-over-year for an eighth consecutive month. Pending sales were also down year-over-year for an eighth consecutive month.
Higher home prices coupled with higher interest rates have impacted affordability and cooled buyer demand. Home buyers are frustrated by higher rates, rising home prices, and economic uncertainty. As a result, home sales and mortgage applications have fallen since last year at the same time. As pending sales are a good indicator or future sales and buyer demand, we should expect fewer closed sales in the months to come.
The fact that we also see fewer new listings coming on the market indicates Charlotte region will continue to experience inventory challenges, which impact home price appreciation.
MEDIAN HOME SALE PRICES REACH NEW HIGHS IN AUGUST 2022
Despite, lower closed and pending sales, average list and sale prices increased in August 2022, year-over-year. Average list and sale prices also increased since July 2022. Median sale price also increased year-over-year and was slightly higher than in July 2022. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. A contributing factor to the increase in median sale price is the higher price point of homes that are for sale.
Pricing a home correctly is key for sellers, as the "right" price brings buyers and fewer days on market. In August 2022, the Charlotte region saw a 157% increase year-over-year in price reductions since the market began its shift and cooling.
CLOSED & PENDING SALES DOWN YEAR-OVER-YEAR, UP MONTH-OVER-MONTH
Closed sales were down 22% year-over-year in August. Closed sales were up slightly (141 homes) versus July 2022. Pending sales were also down 18% year-over-year, but increased by 129 homes from July 2022.
HOW MUCH HAS THE REAL COST TO BUY A HOME INCREASED IN 2022?
The real cost to buy a house has officially spiked over 50% since the start of the year. The housing affordability index continues to drop and impact sales volume. Housing affordability dropped 29.5% year-over-year by 28 points (10 points more than in July 2022). Year-to-date the housing affordability index dropped 31% by 31 points, also 10 points more than in July 2022.
HOUSING MARKET OVERVIEW FOR CHARLOTTE REGION:
AUGUST 2022
CHARLOTTE REGION HOME INVENTORY INCREASED, BUT STILL IN "SELLER TERRITORY"
Housing inventory increased for a THIRD consecutive month in August 2022. Inventory is up 25.8% compared to the same time last year and the months supply of housing is up from 1.1 months to 1.5 months year-over-year.
While housing inventory has increased, new listing activity decreased 15.2% in August 2022 compared with August 2021 and is still down 4.7% year-to-date compared with the same time frame one year ago. This was the second consecutive month new listings were down in the Charlotte region.
Continued increases in inventory should help cool price appreciation. Nonetheless, the 1.5 months supply of homes keeps Charlotte region in "seller territory." We need four months of inventory to consider it a "balanced" market, much less a buyer's market, which would need six months of supply.
CHARLOTTE REGION HOMES SOLD QUICKLY IN AUGUST 2022
Averaging 19 days on market, homes continued to sell quickly, despite increasing four days year-over-year and month-over-month. Year-to-date days on market were two days lower versus August 2021.
With homes being purchased quickly, increases in inventory coupled with fewer new listings will do little to alleviate the inventory shortage in the short term. Longer term, with buyer activity slowing because of rising rates and prices, should sellers continue to list, inventory will slowly increase and prices should also start to settle.
CHARLOTTE REGION LIST TO SALE PRICE RATIOS OPEN A SMALL WINDOW OF OPPORTUNITY FOR BUYERS TO NEGOTIATE ON PRICE
With a list to sale price ratio of 98.5% in August 2022 (down 3% year-over-year and down 1.8% month-over-month), buyers are carefully scrutinizing listing prices and are beginning to see more opportunities to negotiate on price. Year-to-date, the list to sale price ratio is till 0.2% higher than in August 2021.
OUTLOOK FOR HOME SALES IN CHARLOTTE REGION
Moving forward into the fall selling season, lack of adequate inventory to satisfy buyer demand, coupled with increasing interest rates and home price increases reducing affordability, are what will hold the market back in terms of sales momentum.
While buyers are frustrated by rising interest rates, rising home prices, 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.
There is lots of talk about a market crash. However, the affordability issues the Charlotte Region market is facing do not point to a housing bubble or market collapse. Housing bubble are a result of speculation and not of rising buyer demand. Speculation is not driving Charlotte area housing demand. Historically, there has not been sufficient housing built in the Charlotte region to keep up with the demand we've seen over the past years and the population growth in the region.
We will also continue to see affordability challenges for first-time buyers, as well as challenges for renters to save for a down payment.
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This Charlotte region housing market update for August 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.
If you're considering selling or purchasing a home in the Greater Charlotte region, I'd love an opportunity to earn your business, to exceed your expectations, and to show you why experience matters and how:
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Read the full article at www.GreatHomesInCharlotte.com
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