Charlotte real estate in January 2023 saw home sales drop 37.9% year-over-year, while home prices increased 6.2%, on average. Sales dropped for a 13th consecutive month due to higher home prices, increasing interest rates, and fewer new listings. Homes sold in 46 days, on average. The months supply of homes, while increasing, remained below two months at 1.5 months, keeping Charlotte in “home seller territory.” Home affordability continues to suffer.
Charlotte Real Estate Activity: January 2023
Charlotte real estate market in January 2023: latest news on the Charlotte Region and what it means for you…
January 2023 home sales were down year-over-year for a 13th consecutive month. Pending sales were also down year-over-year for a 13th consecutive month. Sales are happening, but not at the volume we saw in 2021 and the first half of 2022.
Higher home prices coupled with higher 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 in 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 37.9% year-over-year in January. Compared with January 2022, closed sales were down by 1,379 homes. Pending sales were also down 12% year-over-year, equal to 497 homes. Month-over-month pending sales increased 47% by 1,166 homes in January 2023.
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 once 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 21.2% year-over-year by 21 points in January 2023.
Despite, lower closed and pending sales, average list and sale prices increased in January 2023, year-over-year. Home prices are still increasing, but at a slower pace. Median sale price also increased year-over-year. 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, both average and median sale prices decreased.
Housing inventory increased for an eighth consecutive month in January 2023. Inventory is up 55.8% compared to the same time last year. The months supply of housing is up from 0.7 months to 1.5 months year-over-year. Month-over-month, the months supply of inventory was 0.1 months lower. Month-over-month, inventory decreased by 711 homes. Nonetheless, the 1.5 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 20% in January 2023 compared with January 2022.Month-over-month, Charlotte region saw 766 more listings come on market.
Averaging 46 days on market, the days on market increased 23 days year-over-year and by five 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 94.5% in January 2023 (down 5.6% year-over-year and down 0.2% 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.
Charlotte Region Real Estate Snapshot: January 2023
Closed Sales: down 37.9% year-over-year.
Homes Sold: 2,261 in January 2023 versus 3,640 in January 2023.
Pending Sales: down 12% year-over-year.
New Listings: down 20% year-over-year.
Inventory of Homes: up 55.8% year-over-year to 5,768 compared with 3,702 in January 2022.
Months Supply of Homes: up 114.3% with 1.5 months supply of homes compared with 0.7 months in January 2022.
Days on Market Until Sale: 46 days in January 2023 versus 23 days in January 2022.
Average Sale Price: up 6.2% year-over-year to $417,430. Month-over-month, average sale price decreased $19,490.
Median Sale Price: up 7.2% year-over-year to $375,000. Month-over-month median sale price was virtually flat, dropping $1,375.
% of Original List Price Received: 94.5%, decreasing 5.6% year-over-year.
Housing Affordability Index: down 21.2% year-over-year to 78 from 99.
Want to know what this would mean for your family if you decide to buy or sell a Charlotte region home?