This Summer In Charlotte, Inventory Problems Persist
High interest rates and steady demand make house hunting in Charlotte a challenge this summer.
While demand for Charlotte-area homes has remained strong, inventory shortages and high interest rates mean a slower market. Find out more about the trends dictating Charlotte buyer and seller decisions this summer.
Low Inventory, High Demand
Charlotte-area real estate experts have been singing the same tune for a while now, but it holds true: there simply aren’t enough existing homes in Charlotte to keep up with demand. This June, Charlotte housing inventory sat at only 1.3 months of supply, whereas a balanced market is 5-6 months of housing supply.
The inventory shortage has only worsened since last year: May 2023 listings declined by over 25% compared to May 2022. At the same time, the population of Charlotte is currently growing by 0.34% every year and buyers — especially first-time homebuyers who aren’t currently enjoying a mortgage with a low interest rate — are still on the hunt for homes near the Queen City.
Interest Rates
While a slowdown in home construction is part of the culprit in the low-inventory puzzle, spiked interest rates are also to blame. Mortgage rates have fluctuated all year, with the Fed raising them again in July. These relatively high interest rates are keeping current homeowners from selling, which contributes to low inventory.
With a large portion of homeowners sitting on interest rates well below 5%, it’s understandably difficult to find potential sellers. As homeowners hang onto their starter homes and put off upgrades, the new tier of homebuyers struggles to find footing.
Slower Sells
Although the demand is there, higher interest rates also mean that buyers have to be more discerning with their budgets. Homes are staying on the market a bit longer than in the past few years. In May, homes sat on market for an average of 34 days, compared to 2022’s May average of 14 days. In June, Charlotte saw 1,237 homes sold, compared to 1,486 in June of last year.
Seller’s Market
Despite the fact that homes aren’t all flying off the market overnight like they did in 2021, Charlotte remains squarely in seller’s market territory. Because there’s so little inventory, great homes still see multiple offers. In June, the median days on market sat at 33, but hot homes sold for 3% over list price in just 5 days — a familiar story to anyone who searched for a home in the last few years. Home prices are also on the rise, with June home prices up 2.2% compared to last year and a median price of $425K.
The slower market and slightly less demand for the average home still helps to balance out the bidding process for buyers. Hot homes will require fast action, but buyers can enjoy a bit more space to negotiate compared to past years. In the same vein, sellers need to price their listings strategically and stage mindfully in order to see success in the Charlotte market this summer.
Combatting Low Inventory
Buyers can breathe a sigh of relief at the slightly more balanced market. Still, the reality of house hunting in the Charlotte area is a maze of compromises for many families. Hot homes that are priced well and equipped with updated floor plans and amenities are still selling in their first weekend on market, often with multiple offers. In many areas, bidding wars are still a very real element of the house hunting process.
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