Charlotte real estate in February 2023 saw home sales drop 27.8% year-over-year, while home prices increased 3.7%, on average. Sales dropped for a 14th consecutive month due to higher home prices, increasing interest rates, and fewer new listings. Homes sold in 48 days, on average. The months supply of homes, while increasing, remained low at 1.2 months, keeping Charlotte in “home seller territory.” Home affordability continues to suffer.
Charlotte Real Estate Activity: February 2023
Charlotte real estate market in February 2023: latest news on the Charlotte Region and what it means for you…
February 2023 home sales were down year-over-year for a 14th consecutive month. Pending sales were also down year-over-year for a 14th consecutive month. Sales are happening, but not at the volume we 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 can 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.
Home buyers are 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. 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.
Closed sales were down 27.8% year-over-year in February. Compared with February 2022, closed sales were down by 1,052 homes. Pending sales were also down 8.3% year-over-year, equal to 347 homes. Month-over-month pending sales increased by 213 pending sales while closed sales increased by 470 homes.
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 twice 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 20.8% year-over-year by 25 points in February 2023.
Despite, fewer closed and pending sales, average list and sale prices increased in February 2023, year-over-year. Home prices are still increasing, but at a slower pace. Median sale price also decreased 1.9% year-over-year, but are up 2.4% year-to-date. 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 price increased, while median sale price decreased.
Housing inventory increased for a ninth consecutive month in February 2023. Inventory is up 70.5% compared to the same time last year. In February there were 1,950 more properties for sale than one year ago. Month-over-month, the number of properties for sale decreased by 1,051.
The months supply of housing is up from 0.6 months to 1.2 months year-over-year. Month-over-month, the months supply of inventory was 0.3 months lower. The 1.2 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. And 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 18.3% in February 2023 compared with February 2022, with 767 fewer properties listed. Month-over-month, Charlotte region saw 233 more listings come on market.
Averaging 48 days on market, the days on market increased 100% by 24 days year-over-year and by two days month-over-month. Pricing a home correctly is increasingly critical for sellers, as the “right” price brings buyers and fewer days on market.
With a list to sale price ratio of 95.3% in February 2023 (down 5.4% year-over-year, but up 0.8% month-over-month), buyers are carefully scrutinizing listing prices and negotiating on price. Buyers may have more bargaining power now than at any point during the pandemic.
Moving forward into the 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.
Charlotte Region Real Estate Snapshot: February 2023
Closed Sales: down 27.8% year-over-year; down 11.7% year-to-date.
Homes Sold: 2,731 in February 2023 versus 3,783 in February 2023. Closed sales are down 31.8% year-to-date.
Pending Sales: down 8.3% year-over-year; down 11.7% year-to-date.
New Listings: down 18.3% year-over-year; down 19% year-to-date.
Inventory of Homes: up 70.5% year-over-year to 4,717 compared with 2,767 in February 2022.
Months Supply of Homes: up 100% with 1.2 months supply of homes compared with 0.6 months in February 2022.
Days on Market Until Sale: 48 days in February 2023 versus 24 days in February 2022. Year-to-date, days on market are up 24 days year-over-year.
Average Sale Price: up 3.7% year-over-year to $421,867. Month-over-month, average sale price decreased $33,127. Year-to-date home prices were up 4.9%.
Median Sale Price: down 1.9% year-over-year to $353,550. Year-to-date, median sale price was up 2.4%.
% of Original List Price Received: 95.3%, decreasing 5.4% year-over-year; year-to-date, the list to sale price ratio was 95%, down 5.4%.
Housing Affordability Index: down 20.8% year-over-year to 95 from 120; year-to-date, the affordability index was down 23.8% to 93 from 122.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?
This Charlotte region housing market update for February 2023 is provided by Nina Hollander with Coldwell Banker Realty, Greater Charlotte area residential real estate expert serving Charlotte region home buyers and sellers for 24+ years.
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