Reflecting on Charlotte Real Estate in 2021
Take a look back at the key events that shaped the Charlotte real estate market this year.
As 2021 draws to a close, it’s only natural to take time to reflect on the events of the last year. When it comes to Charlotte real estate, 2021 brought a steadily competitive and strong market. Charlotte real estate professionals Peter Lazzopina and Andy Griesinger share their thoughts on the key market factors from 2021.
Out of State Interest
One factor contributing to Charlotte’s seller’s market in 2021 was the influx of people moving into town from other states. “I’ve been running open houses all year,” says Lazzopina, “and at each one, I’ve had about half the people visiting from out of state.” By and large, these aren’t first-time homebuyers. “These are people who are relocating, some because of the pandemic and changing priorities or work expectations, and some who wanted to move into a stronger economy with more space to spread out,” Lazzopina explains. This new set of buyers — some with budgets much higher than the average NC home price — boosted the market and kept it competitive throughout 2021.
Griesinger adds that Charlotte offers many attractive attributes. “Here, the cost of living is lower, there are good jobs, and the climate is gorgeous just about year-round.” Once one person moves to Charlotte from out of state, he says exponential new transplants follow. “One person moves here, sees how nice the city is, and ends up being the reason their whole extended family moves here. The growth isn’t linear, it’s exponential.” Especially as remote work has become an option throughout many different industries, the quality of life in Charlotte has drawn new people to the city in droves.
Low Interest Rates
Another aspect fueling 2021 demand, not only in Charlotte but nationwide, was the low interest rate. “Just as people wanted more space to spread out during the pandemic, budgets were also more powerful with mortgage percentages around 3%. That meant that down payments and monthly mortgage payments were within reach for people who hadn’t thought they could afford a home before,” says Lazzopina.
“Interest rates fueled demand, and then that demand fueled even more demand,” says Griesinger. “As word got out that the market was seeing huge growth, more and more people wanted to get in on it. They didn’t want to be left behind.” Even as inventory fell short of demand, even more people looked to enter Charlotte’s hot housing market.
Low Inventory
At the same time as demand skyrocketed, supply slumped in 2021. “COVID froze a lot of people’s selling plans,” says Lazzopina. “When everyone was working from home during lockdown, home improvement projects were very common. Everyone was doing work on their homes to customize them to their exact tastes, which made them much less likely to sell this year. And that lack of inventory drove prices up.”
“We saw low supply and low inventory this year,” Griesinger agrees. “And these aspects drive pricing. Depending on the neighborhood, most Charlotte real estate saw about a 20% growth in price in 2021.” As long as this large discrepancy between supply and demand exists, bidding wars will too.
Supply Shortages
Instead of settling for existing homes that didn’t check all of their boxes, many homebuyers looked to build their own homes instead. In the midst of outrageous bidding wars on existing homes, some even found that building custom was a more affordable and trustworthy option. However, as 2021 went on, supply shortages threw a wrench in building plans and budgets.
“Supply chain issues have made new home construction very difficult,” says Griesinger. “In 2020, builders were squeezed and couldn’t build as quickly. A lot of production is still trying to catch up.” From lumber to smart products to construction staff, shortages have taken a toll on the pricing and timing of new homes.
“These shortages have made building more competitive,” says Lazzopina. “Builders having to grapple for materials means there are no more caps on the cost of building — prices can change between when you purchased the home and when it’s finished, which is a really unpleasant surprise for buyers.” With big builders, this unfortunate reality is hard to avoid.
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