CHARLOTTE REGION APRIL 2023 REAL ESTATE REPORT
WHAT YOU NEED TO KNOW...
WHAT IT MEANS FOR YOU...
April 2023 home sales declined in the 16-County Charlotte Region year-over-year for a 16th consecutive month. Pending sales were also down year-over-year for a 16th consecutive month. Sales are happening, but not at the volumes experienced in 2021 and the first half of 2022.
Higher home prices coupled with increasing interest rates have impacted affordability and continue to cool buyer demand. The market in 2021 was clearly an anomaly and we now see that year-over-year sales declines from 2022 appear significant. Sales are still occurring... just not at the pace of the last couple of years. By the same token, the housing market continues to experience steady activity with high buyer interest and multiple offer situations in highly desired areas of the Charlotte Region.
Home buyers remain frustrated by higher rates, rising home prices, and economic uncertainty. Consequently, home sales and mortgage applications have fallen since last year as buying "power" declines. The typical mortgage paying will be higher (28% to $2,430), pricing some buyers out of the market. Pending sales are a good indicator of future sales and buyer demand. We should expect fewer closed sales in the months to come. Furthermore, 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.
HOUSING MARKET OVERVIEW FOR CHARLOTTE REGION:
APRIL 2023 VS APRIL 2022
Closed sales were down 21.8% (by 998 homes) year-over-year in April. Compared with March 2023, closed sales declined by 251 homes. Pending sales were also down 9.1% year-over-year. Month-over-month pending sales declined by 434 sales.
The real cost to buy a house has spiked over 55% since 2022, as the Federal Reserve raised rates seven times in 2022 and already three times in 2023. Mortgage rates topped 6% for the first time since 2008 and went over 7%. The Charlotte region housing affordability index continues to drop and impact sales volume. Housing affordability dropped 11.8% year-over-year in April 2023.
Despite, fewer closed and pending sales, year-over-year average list and sale prices increased in April 2023 and year-to-date. Home prices are still increasing, but at a slower pace. Median sale price decreased 1.1% year-over-year, but is up 1.2% year-to-date and up 2% over March 2023. The median sale price is the best measure of price over time, as it factors out extreme highs and lows in home prices. April 2023 marks the third month of year-over-year declines in median sale price, although the declines have been relatively small. It would appear that prices peaked in summer 2022, with the median sale price down 12% since June 2022 and falling each month since December 2022.
Housing inventory increased for a 11th consecutive month in April 2023. Inventory is up 27.7% compared to the same time last year. In April there were 1,018 more properties for sale than one year ago. Month-over-month, the number of properties for sale decreased by 138.
The months supply of housing is up from 0.8 months to 1.3 months year-over-year. Month-over-month, the months supply of inventory remained unchanged. The 1.3 months supply of homes keeps Charlotte region in "seller territory." However, sellers don't have the same strong position they had in previous years, with pricing key to attracting buyers and selling quickly. Although Charlotte Region is still technically a seller's market, the days of receiving well over asking price are behind us and sellers need to reset their expectations.
While housing inventory has increased, new listing activity decreased 25.1% in April 2023 compared with April 2022, with 1,459 fewer properties listed. Month-over-month, Charlotte region saw 475 fewer listings come on market.
Averaging 39 days on market, the days on market increased 143.8% by 23 days year-over-year, but were nine days lower than in the previous month of March. Pricing a home correctly is increasingly critical for sellers, as the "right" price brings buyers and results in fewer days on market.
With a list to sale price ratio of 97.5% in April 2023 (down 5.2% year-over-year, but up 1.3% month-over-month), buyers are carefully scrutinizing listing prices and sellers are not in as strong of a position as they were during the pandemic years.
Moving forward into the late spring selling season, both sellers and buyers continue to be distracted by growing economic concerns and negative housing headlines. The slowdown in home sales that began when mortgage rates increased in 2022 is expected to continue in the coming months. The costs to purchase a home will remain high, challenging affordability at a time when overall budgets continue to be squeezed by inflation. Buying power will remain on the decline with typical mortgage payments 28% higher on average, pricing many buyers out of the market.
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This Charlotte, NC region housing market update for April 2023 is provided by Nina Hollander, Coldwell Banker, Greater Charlotte residential real estate expert. I've been opening doors for Charlotte area home buyers and sellers for 24+ years. Let me open the door to your next home... you'll be glad you did!
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Read the original at www.GreatHomesInCharlotte.com